AN EYE ON THE ENVIRONMENT | Extended warranties and the right to repair – VC Reporter
by David Goldstein
Are extended warranties worth it? When it comes to cars, the question is complicated by a multitude of options, prices and incentives. For other items, from home appliances to cell phones, the choice is easier.
Some people need extended warranties than insurance. According to a May 2020 “Report on Economic Well-Being” from the Federal Reserve, nearly 40% of Americans couldn’t pay for a $400 emergency expense with cash or with a credit card charge that they could settle on their next statement. In cases where consumers must choose between living without a fridge or topping up their monthly interest payments, an extended warranty can be crucial, even if the added cost of the warranty is delaying a purchase.
For others, the similarity between warranty and insurance has a very different benefit. “Like a dentist or doctor at an HMO, we charge a lot less for warranty work than for item repairs from someone who just calls us with no policy,” said Dean Stoli, a customer service representative at my device service, based in the western San Fernando Valley and one of the largest home repair centers throughout Ventura County.
The benefit of this discount is factored into the cost of a good extended warranty. In other words, the manufacturer offering a warranty calculates the average cost for an average person to repair a device during the warranty period, and generally charges enough to cover the cost. Because the manufacturer’s cost is lower than the cost to a consumer without a warranty, the warranty is, on average, a good deal, according to Stoli.
For non-warranty consumers it sometimes makes more sense to work with local workshops, even if those workshops are not authorized by the manufacturer. However, not all manufacturers make it easy to work with unauthorized workshops.
For example, William Shifflet, the 28-year-old owner of Gizmo Wizards in Oak View, told me, “Some companies that I service want to put me out of business.” He explained, “With every new iPhone generation, there are more booby traps , so you can end up damaging a phone if you’re not an expert.” In contrast, “HP computer parts are easy to buy and HP is easy to work with.”
Design changes, feature additions, and product improvements could encourage replacement rather than repair of products ranging from cell phones to dishwashers, but if manufacturers accelerate demand for new products by including non-durable parts, or if repairs require replacement parts , a manufacturer stops manufacturing, consumer choice is limited. In one area, consumers are fighting back.
A Change.org petition to the United States House Committee on Energy and Commerce calls for a ban on printer cartridges that should be disposed of rather than remanufactured. The petition claims that “what was once a thriving circular economy for recycling and remanufacturing used printer cartridges in the early 2000s” has since been “devastated and is currently on the brink of extinction… due to the importation of cheap, non-reusable replacement parts.”
A related consumer movement is fighting to preserve the ability to repair yourself. In a victory for these proponents, the Federal Trade Commission last year voted unanimously to enact a group of pro-legislatives called the “right to repair.” An FTC report titled “Nixing the Fix” inspired the vote, accusing some manufacturers of violating the Magnuson Moss Warranty Act by making false claims, such as: B. “Opening this device will void the warranty.”
Consumers who brought the case to the FTC were organized by the nonprofit organization US Public Interest Research Group and financed, in part, by private companies such as I attach it, a San Luis Obispo-based company that sells repair kits and manuals. Right to Repair advocates argue that consumers deserve access to tools, parts, documentation and software needed to make repairs.
Aside from saving consumers money, there are other benefits to repairing. From an ecological point of view, the repair saves resources that would otherwise be required for the manufacture of new products. From an economic perspective, the home economy can benefit from repair by using local labor to revitalize used items rather than sending money abroad to purchase internationally produced goods.
David Goldstein, an Environmental Resource Analyst with the Ventura County Public Works Agency, can be reached at 805-658-4312 or [email protected].