A Consumer NZ mystery shop of big-box retailers has found sales staff promoting extended warranties with misleading claims.
Consumer chief executive Sue Chetwin says extended warranties had been a lucrative side-line for retailers, but the warranties were of limited value to most consumers.
People are being warned to double check their warranties.
“Retailers argue it's worth paying extra for an extended warranty because it gives you ‘peace of mind' and they'll sort things out if a product is faulty,” says Sue.
“But in most cases, you're paying for protection you already have by law.”
The Consumer Guarantees Act requires goods to be of acceptable quality.
“If they're not, you're entitled to ask the retailer to put things right,” she adds. “You don't need to buy an extended warranty to get this cover. Sales staff who claim otherwise are misleading consumers about their rights.”
A Smiths City sales rep claimed Consumer's shopper would have to fight it out with the manufacturer if a product developed a fault and the shopper hadn't bought an extended warranty.
Sue says the claim was wrong.
“The Consumer Guarantees Act provides powerful after-sales protection,” she explains. “If a product isn't of acceptable quality, the retailer has a responsibility to provide a remedy. You don't have to go into battle with the manufacturer.”
Sue advises shoppers to be wary of claims they should buy an extended warranty when they purchase a new appliance.
She says the extended warranty sales pitch had not changed significantly since Consumer last sent mystery shoppers into big-box retail stores in 2012.
“Back then, sales assistants promoting extended warranties also failed to mention the rights shoppers have under the Consumer Guarantees Act,” says Sue.
Recent law changes mean anyone who buys an extended warranty now has a “cooling-off” period of five working days to cancel and get a refund.
“Retailers have to tell you about this cooling-off period when you're in the store,” adds Sue.
Smiths City, Noel Leeming and Harvey Norman outlets were included in Consumer's mystery shop.
Sales reps at the surveyed stores suggested an extended warranty to provide extra cover after the manufacturer's warranty had ended.