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Can a retailer require you to purchase an Extended Warranty?

Discussion in 'Off Topic' started by GasDoc, May 20, 2014.

  1. GasDoc

    GasDoc Member

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    I figured someone in this educated group might know the answer to this question...

    Yesterday, I went to purchase a receiver from the Sony Store at Stanford Shopping Center.

    The only unit they had was "open box". They said that they would give me a discount since it was opened but I was required to pay for a 3 year extended warranty for $40.

    If I declined the warranty, they would not give me the discount and the unit would cost more without the extended warranty than with it.

    Is this legal? Was the sales person trying to pad their commission or the stores numbers? I know that commissions/margins on extended warranties are quite high.
     
  2. HankLloydRight

    HankLloydRight Fluxing

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    Yeah, sounds totally fishy to me.
     
  3. NigelM

    NigelM Recovering Member

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    No.

    My sister in insurance tells me that the commissions on extended warranties are often up to 100% of the first year price. Approx $13 for a $40/3yr warranty.
     
  4. green1

    green1 Active Member

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    It's shady as anything, but it may be legal. They didn't refuse to sell you the item, they only offered an optional discount with strings attached... I don't like it, and with some pressure they'd probably drop it, but it may just be legal.

    It would be illegal if they said you could only buy it with the warranty (they instead told you that you could only get the discount with it, a discount that they are not required to provide)
     
  5. Doug_G

    Doug_G Lead Moderator

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    It doesn't matter if it's legal or not, I would simply refuse to do business with a company that does something like that. And I would write to the store manager to tell him that they have permanently lost your business.
     
  6. stopcrazypp

    stopcrazypp Well-Known Member

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    Because it was tied with a discount, it's not necessarily illegal. It seems they are trying to get commission and this is a "creative" way of doing it.
     

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