| Honey,
they shrunk the warranty | | |
| That's just
what Flores did when he was in the market for a combined DVD/VCR player. He found
that some manufacturers, such as Samsung, continue to sell a one-year labor warranty
on such gear. By contrast, Panasonic only sells a 90-day warranty.
"It's 'the buyer beware,'" Flores says.
"If a consumer finds a product that he or she wants, they need
to look to see what the warranty is."
While reading warranty information
could be seen as an insomnia remedy, it has become easier to obtain information
before you buy. For example, when conducting research on what digital camera to
buy, include a search for "warranty" when you check out specifications
on a manufacturer's Web site.
Whatever you do, think long and hard before you sign
up for an extended warranty. Consumer advocates say that in general
extended warranties are not worth the paper they are printed on.
Retailers or manufacturers reap profits, while consumers are basically
paying upfront for a repair they may not need -- until the extended
warranty has expired, that is.
Managing
public opinion
A longer warranty is also not necessarily an indication
of the quality of the product. Structuring warranties is one more way to manipulate
not just consumer behavior, but how people think about a product. For example,
if a manufacturer opts to offer a longer warranty than is standard in the industry,
that can send a message to consumers that the manufacturer's product is more reliable
than a competitor's.
In a recent article, Arnum profiled Hyundai Motor
America. In 1998, the car company began offering a 10-year or 100,000-mile
powertrain warranty and a five-year/60,000-mile coverage on the
rest of the vehicle. By beefing up its warranties, Hyundai over
time improved its quality rating with consumers. Meanwhile, the
longer warranties reassured drivers that even if a Hyundai vehicle
did break down, it would get fixed for free.
The length
of a warranty shouldn't be the sole reason to buy or not buy from a manufacturer.
However, it's a variable that a sophisticated consumer should consider when pondering
the question: "to buy or not to buy." Read the fine print before you
purchase a home theater system or another big-price-tag item. And
despite what your salesman tells you, in most cases you're probably better off
skipping the extended warranty. While it would definitely help the retailer selling
the warranty, it likely won't leave you better off. | 
