Extended Warranty Rip-off Scams Ends With SquareTrade

Square Trade offers extended warranties on tons of stuff. In fact, chances are that if the retailer you are buying the product from offers an extended warranty, SquareTrade does too. It operates as an online business at www.squaretrade.com.

Update: SquareTrade isn’t so good for phone warranties

The difference between them and electronics stores or other retailers, is that they aren’t trying to make up their low profit margins on pricing by selling way over-priced warranties. (Circuit City went out of business when they couldn’t sucker enough people into buying warranties anymore.) Instead of price gouging naive customers with overpriced extended warranties, SquareTrade operates more like a traditional insurance company. What they do is estimate how frequently a certain product or type of products requires warranty service, and the average cost of each warranty service. Multiply that out, and you get the overall expense of offering the warranty. Then, you add on a normal profit margin to each warranty sold and, voila, a profitable company that sells reasonably priced warranties. This is a good business model, unlike trying to squeeze the maximum dollars out of every customer’s pocket ,and then hope that they don’t realize that they have been cheated. That means that their warranties are priced like they should be without a huge markup.

The other very important difference is that when you have a SquareTrade warranty, you have a warranty that was explained, represented, and sold by Square Trade. When you buy a store warranty, you have a warranty that was sold by an employee at the store, who may or may not have fully understood it. Either way, that warranty is NOT a product or service of that store. That warranty will be from some third-party that you have never heard of. That means the store will only be able to say, “Sorry, we aren’t who you need to talk to.”

However, the most important difference between a SquareTrade warranty versus a regular warranty from the store is that the warranty company doesn’t care if you have a good experience or not. You didn’t know who they were when you bought the extended warranty in the first place, and you won’t know who they (or one of their many subsidiaries) is when you are contemplating buying a warranty next time. In other words, they have no incentive to give you good service or worry about getting a bad name. On the other hand, SquareTrade is a stand alone company that would quickly go bankrupt if it got a bad reputation. In fact, they need your repeat business. The only way that is going to happen is if you are a satisfied customer, which means giving you a much cheaper price than in the store, and actually trying to satisfy you if something goes wrong while your product is under their warranty.

Don’t take my word for it. Go online before you go shopping for something. Get a quote for what the extended warranty from SquareTrade will cost. Then, go into the store and let the salesperson tell you how much their extended warranty will cost. The price difference between a SquareTrade warranty and store warranty will shock you. In many cases, the warranty offered by the store is double the price of the Square Trade warranty or more!

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2 Responses to Extended Warranty Rip-off Scams Ends With SquareTrade

  1. robert sauer says:

    i’ve been doing business with square trade for years and i am very pleased with their warranty prices and service IF IT CAN’T BE FIXED THEY REFUND YOUR PURCHASE PRICE I THINK ITS THE BEST THING IN WARRANTIES 5 stars

  2. Steve S says:

    I know 5 years later and all, but I find it dishonest when they label their cellphone coverage as insurance and then compare their coverage against that of a cellular carrier that is an actual insurance plan. Yes the carriers charge a lot for insurance, but when you lose your phone or it gets stolen you’ll find that SquareTrade won’t cover it. People think that won’t happen, and Square Trade’s website poo-poos how often that happens, but it happens. A lot. If one wants to poo-poo something they can talk about what it does cover and how you can either pay for your own repairs from an independent phone place out use the actual warranty coverage for manufacturer problems.

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