You have just purchased a new TV, laptop or even a new car for personal use, and you are asked by the salesperson whether you wish to buy an “extended warranty”. Do you know what this means? Well, the cynic might say it’s a bit like, “Do you want fries with that?”. In other words, you are being up-sold or the salesperson is doing some smart “cross-selling”. This is because you are being sold something you already have from the time of purchase, namely a warranty.
That new TV, laptop or car come with a manufacturer’s warranty. This is a type of assurance given to you the customer as to the condition of the product you purchased and the circumstances under which repairs, exchanges or refunds will be made. This is known as an “express warranty”. However, this warranty is inevitably limited in time – sometimes for a ridiculously short duration relative to the price of the product and its expected lifetime.
Take the TV as an example. The manufacturer’s warranty might be for five years. This seems unfair when most customers would expect it to reliably perform for longer than that. To compensate, the salesperson offers at additional cost an extension to the manufacturer’s warranty – usually in terms of duration and other alleged benefits such as immediate replacement or a loan product while the faulty product is being repaired. This “additional protection” has an attraction for some, but usually only for people who do not know their rights.
This is because implied in every sale of specific goods are a series of guarantees automatically given to you by the manufacturer and the seller (known as the supplier). These guarantees are not written down at the time of purchase but exist as a matter of law thanks to the Consumer Guarantees Act 1993. They are comprehensive and long-lasting on products and services bought for personal or household use in New Zealand. Nevertheless, there are two important points to keep in mind: the protection the Act gives does not apply to goods and services for business use and it does not cover accidental damage.
For that TV, there is an implied guarantee that it is of acceptable quality – meaning it is fit for purpose, free from defects, safe and durable. The essential point is that the law most often gives you greater protection than not only the manufacturers’ and suppliers’ warranty but also this so-called “extended warranty”.
Consequently, in most circumstances buying an extended warranty isn’t worth it. If something does go wrong, take the product back to the business that sold it to you. They can deal with the manufacturer or the importer or distributor. Don’t let them duck-shove the problem. Your remedy is with the seller. If you are told the warranty given at the time of purchase has expired, simply mention the Consumer Guarantees Act. You do not have to contact the manufacturer, repair person or anyone else. Unfortunately, there is much misleading information given about a customer’s legal rights. If a product you have bought fails and the seller is unhelpful, Google your rights under the Act or approach a friendly local lawyer or Citizens Advice Bureau.
David is a Notary Public and formerly a lawyer in private practice for 43 years. He lives in Omaha where he is involved with several environmental groups.