When you are looking for bargains on electronics, jewelry, watches, and other such items, you can buy knowing that the items include either warranties or optional product protection plans/service contracts. There are some similarities between the two and some differences.
What Is a Warranty?
A warranty is offered by the manufacturer of the product. The length of coverage varies. You can find out warranty details before you buy an item, as manufacturers have to make warranty information available by law.
Some warranties offer full coverage against any damages, defects in workmanship, etc. Other warranties are limited and may only apply to specific items, such as defective parts. What coverage is offered will be explained in detail in the warranty information.
What Is a Product Protection Plan/Service Contract?
Product protection plans are also called service contracts and extended warranties. No matter what they are called, they are not a warranty. They are offered by the seller, not the manufacturer.
You can ask the seller to see their description of what is and is not covered under a product protection plan. They must also let you know how much it will cost to add this optional coverage to the item you are buying.
Differences Between Warranties and Service Contracts
There are several main differences between warranties and product protection plans and what they will provide when you have a defective item.
Warranties will normally cover the costs to repair or replace your item if there is a defect. It is up to the manufacturer to decide if they want to repair it or replace it. They may also substitute an item of equal value with similar features and options if they no longer sell the item you purchased.
Manufacturers could even decide to replace the item with a refurbished item. Whether they replace it with a new or refurbished item, your remaining warrant is transferred to the item.
Warranties also can include all costs to have the item repaired or replaced, such as shipping costs, parts, and labor. However, if you have a limited warranty, not all of these costs may be covered.
Best of all, there is no cost for warranty coverage. It is included with all of the new items you buy. In some cases, the warranty is transferable if you pawn or sell the item.
Product Protection Plans
Product protection plans provide additional coverage after the warranty runs out. The length of time also varies depending on the item. There is a small cost for product protection plans based on the value of the item you are buying.
If anything happens, you contact the seller to have the item repaired. The seller will repair or replace the item. If it cannot be repaired, then it may be replaced with a new, refurbished, or another used item in similar condition as yours. Sometimes, if the item is no longer available and cannot be repaired, the seller will offer you in-store credit to buy another similar item.
Having the added protection of a service contract is a great idea for peace of mind when buying TVs, sound systems, game systems, jewelry, watches, and other such items. It is also a good idea to add a product protection plan when buying used items, as the warranty is probably long expired.
To find great deals with optional product protection plans, just visit the closest pawn shop near you—like GEM Pawnbrokers in the NYC area. We also provide fast personal loans with no credit checks. Call us at 718-596-5626 if you need help finding your nearest location or have further questions about our product protection plans.
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