Consumer Reports goes after warranties

NEW YORK — In its first ever public education ad campaign, Consumer Reports is telling consumers to just say “no” to warranties pushed by the nation’s retailers.

“We think warranties are a lousy deal for consumers in almost every case,” said Jim Guest, president and chief executive of Consumers Union, the nonprofit publisher of Consumer Reports.”It’s a big business for retailers but a waste of money for consumers.”

The campaign, launched Tuesday, will include a full-page ad in USA Today and feature an e-mail campaign to 825,000 of Consumer Reports’ subscribers and other activists. The magazine’s Web site, www.consumerreports.org will also invite consumers to share their experiences.

According to Warranty Week, a trade newsletter, consumers are expected to spend $1.6 billion on extended warranties for the November-December period. And Guest expects that stores will be pushing even harder this holiday season as they seek to offset a slowdown in revenue as prices for a range of products, most notably flat-panel TVs, have dropped significantly and hits of previous years like digital cameras are maturing.

Extended warranties — pushed by retailers that extend the warranty that’s offered by manufacturers — cost consumers anywhere from $100 to $400 for big-ticket items like TVs and refrigerators, according to the Consumers Union.

“I think there will be a stronger push than ever before by retailers” this holiday season, Guest said. The organization maintains that products seldom break within the extended warranty window, typically about three years. And when electronics and appliances do break, the repair often costs about the same as the cost of the warranty.

Guest noted that there are two possible exceptions for Consumer Union’s “just say no” advice. One is for a rear-projection microdisplay TV since repair costs are high and these sets are three times more likely to need repairs than other types of TVs. Guest said that consumers should also consider paying for an extended warranty when buying Apple computers because they come with only 90 days of tech support and the extended warranty includes extended tech support.

Justin Barber, a spokesman at Best Buy Co., defended warranties, saying in a statement:

“We understand the plans are not for everyone. It is up to the customer to decide if the service plan will meet their individual lifestyle needs.”