Understand the difference between warranties and service contracts, and know what to look for before making big purchases
√ Rodriguez: “As the holiday shopping season comes to a close, it’s important for shoppers to stay informed and make smart, safe decisions, especially when making big purchases.”
As the final part of its five-part consumer alert holiday series, the Department of State’s Division of Consumer Protection (DCP) reminds shoppers of New York state laws regarding warranties and service contracts, so consumers can make informed decisions about holiday purchases. To avoid surprises, DCP recommends that consumers understand what to look for when reviewing warranties and service contracts.
“As the holiday shopping season comes to a close, it’s important for shoppers to stay informed and make smart, safe decisions, especially when making big purchases,” New York Secretary of State Robert Rodriguez said. “To be sure you’re getting what you pay for, I urge all New Yorkers to pay close attention to any warranties or available service contracts that are offered when spending your hard-earned money.”
It’s important that consumers pay attention to warranties and service contracts when making large purchases. To help understand your options, DCP offers the following tips:
•Know the Difference Between Warranties and Service Contracts: Warranties and service contracts are often confused in the marketplace, so it’s important to know the difference between the two. Warranties are provided by the manufacturer and are included in the price of a purchase, whereas service contracts are a separate cost. Don’t pay for a service contract for repairs that may be covered under an included warranty – and always read the terms and conditions to understand what is covered before you buy.
Warranty: A warranty is a promise to the consumer that the product purchased, or service provided, will meet certain quality standards. A warranty is a promise to provide repair, maintenance, replacement or refund of a product for a certain time period if these certain quality standards are not met. Under New York law, warranties may be made orally, in writing and even by implication without any verbal statement. However, proving a warranty was made is always easier with proper documentation. An express warranty is one that is written in the product warranty, while an implied warranty is a legally enforceable promise that something will work as intended.
Service contracts: Some products, such as automobiles and appliances, are often sold with an optional service contract. Although often referred to as an “extended warranty,” a service contract is not a warranty. Service contracts are contracts to perform repairs or maintenance on a product.
Consumers are encouraged to understand what is already covered in the warranty before purchasing a separate service contract. To determine whether you need a service contract, consider the following:
√ Whether the warranty already covers repairs for the time period of coverage offered under the service contract;
√ Whether the product is likely to need repairs and the potential costs of such repairs;
√ The duration of the service contract; and
√ The reputation of the company offering the service contract.
Unlike a warranty, service contracts are not included in the price of the purchase. If a warranty is already provided and covers repairs, you may be paying extra for a largely unnecessary service contract, particularly if the service contract is limited to repair of defects.
The New York State Division of Consumer Protection provides resources and education materials to consumers on product safety, as well as voluntary mediation services between consumers and businesses. The consumer assistance helpline (1-800-697-1220) is available from 8:30 a.m. to 4:30 p.m. weekdays, excluding state holidays. Consumer complaints can be filed at any time at www.dos.ny.gov/consumer-protection.
For more consumer protection tips, follow the DCP on social media on Twitter @NYSConsumer and on Facebook: www.facebook.com/nysconsumer.