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A new investigation by CHOICE reported that 85% of Australian electronic stores do not adhere to Australian Consumer Law.


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The employees even at some of the big retail chains are clueless and so are some consumers.

The biggest mistake both make is to confuse consumer guarantee and warranty. While a retailer may choose to give or not give warranties for their products, consumers are still protected by consumer guarantees under the law (sometimes consumer guarantees can outlive warranties!).

What are extended warranties?

Imagine you go to buy a new TV set. The salesperson informs you that the warranty for your $3,000 TV is two years but they currently offer extended warranty that covers repairs for 3.5 years. But that costs extra.

The 1.5 year of extra warranty is called extended warranty.

The question we are answering today is should you purchase extended warranty under Australian Consumer Law?

Extended warranty is usually purchased for items of high value – home appliances, cars, electronic devices and such.

If you are about to purchase such an item, it makes sense to save yourself the money and check what warranties apply to these types of products anyway under consumer law.

You might find out that you are entitled to these 3.5 years of warranty without having to pay extra for it. Each group of consumer goods, products and services has specific guarantee terms.

According to Australian Consumer Law, 2011 retailers are forbidden to misrepresent warranties and guarantees as only available for an additional fee if the consumer is already entitled to them by law.

For example, if the consumer guarantee by law for your tablet is supposed to be 2 years, the retailer can’t offer only 1 year warranty and ask you to pay extra for an extended one.

Some retailers misrepresent information and create a whole new stream of income for their businesses.

They might mislead a consumer into thinking that they will have extra protection only available upon purchasing the extended warranty.

This is usually not the case and consumers very often pay for what they are already entitled to by law for one simple reason – the lack of information and education on warranty rights.

Let’s say a consumer buys $5,000 sports equipment that stops working properly after 15 months. The retailer refuses to repair it because the manufacturer guarantee is only 12 months and the consumer did not buy the 3-year extended guarantee.

Common sense tells us that $5,000 equipment should have longer life than 15 months and the consumer is still protected.

The majority of Australian consumers do not understand the law very well – according to CHOICE, 2008 only 29% of Australian consumers are aware of the statutory rights under the implied warranties.

The answer to the question if you should buy extended warranty is simple – research and educate yourself about the real meaning and implications of warranties so you can make informed decisions on the spot.

More often than not you are entitled to consumer guarantee that extends far beyond the scope of any warranty.

Knowing your rights will save you money and make you feel confident when returning goods.

Click here for more information on your rights as a consumer in regards to warranties.

Do you have anything to add to the above from your experience? Please share in the comments below.

Image courtesy of Shutterstock.com
  • I always refuse extended warranties. My partner almost gets sucked in every time until I step up and make it very clear we are only there to buy the item we are after. I hate getting sucked into money traps

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  • Thank you for the informative article.

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  • With The Good Guys I did with my washing machine and I am glad I did becuase I had problems with the filters which much have been a bad batch. I also had one with my DVD Playerwhich I bought from Radio Rentals which was fortunate as I hadn’t use it much during its original warranty but developed a problem about 12 months later. I founnd out that the money they charge for extra warranty they pay into insurance cover. They have to submit a report to them before repairing it or contact the cuistomer if the earranty doesn’t cover it.

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  • I have brought extended warranty before and am so glad I did. My washing machine needed fixing after the normal warranty ended.

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  • Interesting read, we usually get extended warranty of big items as they usually come fully replaced if something happens to them.

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  • They are not worth the paper they are written on. The good guys have got a plan where you pay a small amount and they take over everything and if anything goes wrong with your appliance eg microwave they replace it. Check it out. No strings attached.

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  • I never do and always say “NO”.

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  • WE have never used extended warranty as I think it is more of a sales technique to get you to spend more on the item . It is nearly always offered when we buy an electrical item such as a PC and considering you are already covered say for 1-2 years , there is no point as by that time your electrical item has either depreciated or nearly out of date especially with PC’s these days . There has been times when the sales person says it is free , but really it is normal warranty included . Very cheeky .

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  • Wow, very informative I always encourage Hubby to purchase extended warranty for peace of mind. Definetly going to research warranty laws next time we plan on purchasing a big ticket item.

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  • I’ve read something similar previously. I now no longer purchase the extended warranty on any item I buy.


    • We have saved lots of money by not taking out extended warranties.

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  • Another great article – thank you.

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  • Purchased a Samsung 55 smart TV and it stopped working just out of warranty, did not buy extended warranty. Samsung would not repair the TV under the warranty that had expired by about two months and quoted to repair more that it cost to by the next years model new. It was the TV screen that had stopped working there are only five replaceable parts on the TV and two of them are simple on and off switches and channel controls. Purchased new TV this is just part of their plan to keep selling more items and the cost of repairs should be fair.

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  • yeah i usually go for the warranty if i couldn’t afford to replace the product easily.

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  • I bought the extended warranty for our laptops, for extra security. But now I wonder if it was really necessary.

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  • Lke va

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