Consumer Reports says that 85 percent of shoppers plan to purchase electronic products on Black Friday this year.
If you are a retailer who offers service contracts (extended warranties) on such products, you might want to consider a little employee education. As you know, shoppers are skittish this year about buying from retailers who might go out of business. They worry that if they give or receive a defective item – or if they purchase a service contract — certain retailers may not be there to honor returns or contracts.
The Service Contract Industry Council (SCIC) says that most states have stringent financial responsibility laws for service contract providers to help ensure that contracts sold to consumers will be honored. “In addition,” says Timothy J. Meenan, executive director of the SCIC, “a substantial majority of licensed providers purchase insurance from heavily regulated insurance companies to guarantee the performance of all of their service contracts sold through their retail partners.”
Service contracts purchased from major retailers are sold and administered by third-party service contract providers who will continue taking claims and providing service regardless of the status of the retailer that originally sold the service contract.
The SCIC, Meenan says, wants to assure consumers purchasing electronic gifts and replacement television sets for the upcoming digital TV conversion early next year that the majority of service contracts are backed by the providers that administer them and their insurers.
Thus, to reassure your customers — even if you have no plans to go out of business — double check that your service contracts are covered then inform your employees so that they may, in turn, tell your customers.