Keep Warranties in Mind as Shopping Season Starts

Nov. 24, 2008 — -- This Friday, the day after Thanksgiving, is traditionally one of the busiest shopping days of the year, and despite the glum economic picture, I suspect many people will head out to make some holiday buys. Some of us will be shopping at stores whose own economic futures are unclear. So, if you end up with non-functioning merchandise, there are some government-backed warranties you should know about.

Even if the product you buy doesn't come with a written warranty, you are still covered by some unwritten warranties guaranteed by the federal government. The first is called an "implied warranty of merchantability," which basically means that a product must do what it's supposed to do. In other words, a blender must blend and a car must drive. If the item you buy turns out to be defective, even if the seller has a "no returns" policy, you may be able to return it, anyway.

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There's also an unwritten warranty called a "warranty of fitness for a particular purpose," like when a salesperson says a sleeping bag is suitable for zero-degree weather. These unwritten warranties apply unless the product is marked "as is" when you buy it.

If somebody tries to sell you an "extended warranty," keep in mind it's not really a warranty, and it may not be honored at some of these stores that are at risk of going out of business. Extended warranties are service contracts, often offered by an outside company.

Fewer than 20 percent of consumers who buy service contracts ever use them. So here are some things to consider before investing in one. Does it duplicate the protections offered by the manufacturer's warranty? When will it start? The word "extended" implies that it extends the period of the manufacturer's warranty, but often these contracts kick in right away, which is a waste.

Is there a pricey deductible each time the item needs service? Can you get service anywhere or only at the store where you bought the product? Is the item you're buying likely to break down? If you do your homework and choose a good product, hopefully, it won't break down.