Forget about extended warranties. That’s why you don’t need him

It may seem smart to buy an extended warranty if you’re buying an expensive item, such as a laptop, TV, or large appliance. But is it really necessary to take on this extra load on your checking account? Most often the answer is no. Here’s why.

The seller may allow you to return the item.

First of all, you may not need a warranty because the seller you buy the product from can take it back without any problem. One example of a retailer with an exemplary return policy is warehouse giant Costco. While Costco limits returns on electronics and appliances (purchases that often come with the need to buy an extended warranty) to 90 days after purchase, you can return almost everything else at any time.

Furniture is another purchase that retailers make big money on by selling warranties, and Costco has no return limits on tables, chairs, sofas, and so on. In fact, one Costco member recently went viral for returning a couch after more than three years just because she didn’t like it anymore. Personally, I think this is beyond the realm of possibility, but it’s nice to know that some retailers will have your back – no extended warranty required.

Your credit card provides purchase protection

One good reason to use credit cards for purchases (especially big-ticket items) is to benefit from purchase protection. If something goes wrong with an item you purchased with this credit card, the card issuer will refund your money.

Credit cards can be a great way to pay for expensive items. If you are looking for a new card, check out our list of the best credit cards.

There are limits depending on the issuer and the card you use (as you’d expect, cards with an annual fee are likely to have stronger purchase protection). For example, American Express cards have maximum coverage of $1,000 to $10,000 per claim, and an annual maximum of $50,000 for issues such as damage or theft.

If you’re so concerned about a particular purchase (say, a new laptop) that you’re considering buying a warranty, research what purchase protection your cards offer and choose the one that has the strongest coverage.

The product likely comes with a manufacturer’s warranty.

Large (or even not very large) purchases usually come with a manufacturer’s warranty that covers the product for a certain period. Before you take advantage of an extended warranty, take a look at the warranty you automatically receive.

And even if that guarantee is shorter (say, 90 days), you might still get lucky. It is good for the company to help the buyer with customer service, so if something happens to the product after the warranty ends, you can contact the company and see what they can do for you.

Extended warranties can be expensive and incomplete.

Extended warranties themselves have a few drawbacks that make them worth skipping. First, they are often expensive: According to AARP, stores keep 50% to 70% of their earnings on guarantees, which makes them huge profits. Even if the cost of the warranty itself is low, you may be required to pay a deductible or pay to ship the product for repair or replacement.

Even the concept of an extended warranty can be flawed. A 2019 study found that people who purchase an extended warranty believe the product in question is more likely to break than it actually is. To fix this, you need to do your research beforehand. Read product reviews from real people and find out what problems you might have with your device, TV, or laptop.

Knowledge is power. If you are confident that the product you are purchasing is unlikely to fail, you can pocket the money you would have spent on a warranty. Choose the right credit card for your purchase (consider using one of the best cash back cards for added oomph) and look into the manufacturer’s warranty that comes with it automatically. You may simply find that the extended warranty isn’t really needed.