Are extended warranties worth it?

What you need to know before hitting the Boxing Day sales.

Queenslanders have been warned to spend mindfully and to be aware of their legal rights when shopping up a storm in the upcoming Boxing Day and New Year sales.

RACQ’s Lucinda Ross said while it could be tempting to take advantage of heavily discounted prices as retailers cleared their shelves, it was vital shoppers kept an eye on their future financial position. 

“It’s easy to get swept up in the excitement of Boxing Day sales, but you need to think about how spending now could impact your future,” Ms Ross said. 

“If you find a bargain that’s too good to refuse, try to use cash or savings, because if you can’t afford to pay for it now, how will you pay for it later. 

“If you do put your purchases on credit or through ‘buy now, pay later’ and you don’t pay it by the due date, you could be hit with hefty fees or penalties.”

Consumer advocate Choice’s Julia Steward said shoppers should also avoid purchasing extended warranties offered when they bought TVs, gaming consoles and appliances.

“Don’t waste your money on an extended warranty,” Ms Steward said.

“Many extended warranties largely replicate or underplay your existing rights under the Australian Consumer Law. 

“They’re a sales trick to squeeze more money out of you that ignore your existing rights under the law.”

Ms Steward said retailers may use high-pressure sales tactics to get shoppers to buy an extended warranty.

“If someone tries to push an extended warranty on you, ask them ‘what does this give me beyond the Australian Consumer Law?’,” she said.

“Your rights are often longer and more comprehensive than what you receive from a warranty. 

“Under the law, the products you buy should be eligible for refund, replacement or repair depending on the expected lifespan of the product – not what the company says the warranty is.”

Top tips for returning faulty goods

  • Provide your proof of purchase and be clear about what you want.
  • Be firm, but polite in asking for your refund, repair or replacement.
  • If you’re unhappy with the retailer’s response, write a formal complaint to the business  using the language of Australian Consumer Law to assert your rights. 
  • If the retailer is not following Australian Consumer Law, your local consumer affairs or fair trading body can help with the next steps.
  • If you can’t resolve the issue with the retailer, you may be eligible for a refund from your bank or payment service. 

The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person's particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.