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Honey, they shrunk the warranty

Free and lengthy warranties that once gave consumers confidence about their purchases are fast becoming a vanishing breed.

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On many expensive consumer electronic items and personal computers, warranties are shrinking. Instead of getting a standard one-year warranty for parts and labor, consumers are getting less and are often being pushed by manufacturers and retailers to shell out money for extended warranties that critics say are basically worthless.

"Manufacturers are sending a message. They believe the unit has become disposable. They are telling buyers, 'If it breaks, don't call us. Get a new one,'" says Eric Arnum, editor of Warranty Week, a newsletter for warranty management professionals.

Recently Dell and Gateway shortened warranties on many of their products from about a year to 90 days.

In the case of Gateway, warranties on eMachines and systems sold at retail shops are still good for one year, but the company has cut its warranties on certain desktop computers and notebooks sold online.

Dell has reduced its standard warranty to 90 days on all its Dimension desktop and Inspiron notebook computers. It has done the same thing for the printers, MP3 players and hand-held gizmos it sells.

"They are now charging buyers money for what used to be standard operating procedure [and covered under warranty]," says Martin Bosworth, a staff writer for Consumeraffairs.com, a Web site devoted to consumer news and resources.

In part, shrinking warranties can be correlated to lower product prices, at least according to the companies selling the gear. Dell did not return repeated phone calls, but the company has gone on record as saying that the limits on warranties are just a response to consumer demand for cheaper products.

The company's perspective: Cutting warranties means lowered costs that are then passed on to buyers. The manufacturer also says that most problems and breakdowns appear within the first 90 days, so longer warranties aren't necessary.

A push for extended warranties
At the same time that manufacturers are slashing standard warranties, which cost consumers nothing, they are pressuring people to buy expensive -- and what many critics believe are unnecessary -- extended warranties. "You hobble your own product warranty in order to encourage purchasers to buy the extended warranty," Arnum says.

Bosworth says that manufacturers are using stronger tactics to get consumers to buy extended warranties. He says he noticed that the extended warranty offer box is automatically checked when you buy a computer online from Dell -- an unobtrusive (some might say sneaky) way to get consumers locked into buying an extended warranty.

Arnum says that when you buy an expensive appliance from one of the major home-improvement chains, you can count on getting a call from a company representative urging you to buy the extended warranty, even after your online purchase. "They know it does take a sale to get the consumer to buy the extended warranty, but it's a sale that is really worth their time."

 
 
Next: Inconsistent promises
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