Newswise — As the holiday shopping season descends upon the nation this week, a Creighton University professor is offering tips on how to deal with one question we’re often answering when it comes to purchasing those sleek, shiny electronic gadgets: “Do you want the protection plan?”
William Duckworth, Ph.D., is an associate professor of business intelligence and analytics in Creighton’s Heider College of Business, and he’s undertaken an extensive study of electronic device protection plans offered by 12 major providers. He’s summed up what he’s learned in five simple shopping tips for consumers to ponder when they arrive at the register to make their purchases:
1. Buy from a company with thousands of positive reviewsAlthough retailers put their brand name on protection plans, they do not usually provide the customer service and payouts when a customer has problems. Best Buy and Apple are exceptions, as they sell and fulfill their Geek Squad and AppleCare plans, respectively. Most other retailers use a third party to manage protection plans and reputations for these third-party companies can run the gamut.
2. Buy a warranty that covers accidents — all accidentsSome protection plans only extend the manufacturer’s warranty against malfunctions and defects. If buying a laptop, extended coverage may be needed against failure of the screen, battery or hard drive. But drops and spills are at least of equal concern. For smartphones and tables, an accident is an even bigger concern than malfunction. Recent research by protection-plan provider SquareTrade found 30 percent of iPhone users accidentally damaged their device in the past year. Even when a plan says it covers accidents, there could be hidden exclusions. Most of us don’t have time to comb through the fine print for those exclusions, so refer to Tip No. 1: find a company with great customer reviews.
3. Don’t buy a protection plan if you feel pressured into making a quick decisionAsking you to buy a protection plan at checkout with limited information makes most of us squirm. Ask how long you have to make a decision, and ask for more information on the plan. If the retailer says you have to buy the plan before you leave the store and you’re not ready to make the decision, just say, “No thanks.” You can always buy protection plans from an independent provider and most give you 30 days to make a decision. And don’t rely on the salesperson or cashier to present perfect information about a plan. Get the details on coverage in print.
4. Check the deductibleDeductibles can be surprisingly high on some protection plans, especially for cell phone insurance. If the plan doesn’t list a deductible and doesn’t explicitly say “no deductible,” don’t assume there isn’t a large deductible hiding somewhere.
5. Consider the big pictureLook for the best overall value in the device you’re buying and in the protection plan you’re considering. Finding the best value in a protection plan means considering a number of factors for each plan and provider.
Buying a protection plan for newly purchased electronic devices is not a one-size-fits-all decision, Duckworth said. The financial investment and the risks involved are personal, and we need to consider our options. A little research and a few calculations can lead to a smart decision when considering an investment in a protection plan.