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Components Of Extended Service Plans

By Marissa Velazquez


Service plans are contracts. Consumers that opt in will pay an added fee in order to get coverage of a purchased product, usually something of perceived value. These contracts are much like extended warranties but with some key distinctions. Extended service plans are widely available in many varieties.

These are not like warranties that are given by product manufactures. Generally, these types of contracts require preventative or routine maintenance. Still, failure or malfunction it is not mandatory in order for them to be activated. These contracts are issued at the time of purchase and are activated on that date as well. This is different than extended warranties that only begin once the manufacturer warranty expires.

A big distinction that can be made between these two contracts is that warranties are strictly designed to cover the defects in workmanship or materials used. In contrast, the service plans will cover the failure of a product, regardless of the cause. Usually there are some exclusions outlined in the policies of the plan. Most come with extra benefits, such as: accidental damage, technical support, no lemons policy, priority service, and theft.

How the products will be serviced is determined by the plan itself. Some will say that the work is to be done by technicians that have been hired by the retailer. Others may call for the product to be sent somewhere else to be fixed, which could add to cost because of cost to ship. Retailers may also choose to give the consumer a store credit or a new replacement from their inventory. This usually happens when the product proves to be non-repairable or too costly to fix.

Overall, consumers are the one who have the final say in whether or not these are worth the price and necessary. Typically this is determined by the perceived value of the product itself. The standard contracts tend to provide adequate coverage for the average repairs and are issued as a way to keep customers away from competing companies.

These usually last for a long time, hence their name, and may even come with additional perks. People who are not familiar with the good that they are purchasing, and how to use and maintain it, might consider buying a plan that includes customer support among other benefits. However, the decision should be that of the customer alone, as these contracts are not mandatory.

Plans are accessible in many parts of the worlds, through many different sources. These are most popularly paired with products that are thought to be valuable or fragile, for instance: devices that are electronic. Some goods sold at stores do not earn retailers that much money so it is important that these parties sell contracts of this sort and accessories to bring in more money.

There are many manufacturers and retailers who have extended service plans available to customers. The amount of coverage, as well as the cost, will vary. In general, these are used to replace or fix malfunctioning or failed products. Such contracts are like extended warranties but with some differences.




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