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Wednesday, June 1, 2011

Best Buy Protection Plan

Almost a year ago, I needed a pair of headphones and found myself, quite by accident, in the local Best Buy store. Normally I would never shop at a Best Buy because of their bad reputation for customer service, but there I was, and they did in fact have the exact pair of headphones I wanted. Although they cost about twice as much as I figured they should cost, they didn't cost any more at Best Buy than at any other store, so I deigned to buy them.

At the register, the all-too-pushy clerk tried to sell me on the "protection plan" for the headphones. Like shopping at Best Buy, I would normally never buy a protection plan, because I am aware of the multitude of reasons that they are bad deals for consumer:
  • Customers usually have to retain their original sales receipt, which most customers do not do.
  • Customers usually have to jump through special hoops when trying to get their refund, like waiting for a rebate in the mail, or proving the damage was not their fault.
  • Stores usually layer all sorts of exclusions, exceptions, and shenanigans into their refund policies, resulting in customers not getting what they paid for.
  • The plans usually cost far more than they are worth, calculated by the cost of the item multiplied by the chance of failure.
  • Consumer Reports agrees with the conventional wisdom that protection plans are almost always bad deals for customers.
In that particular circumstance, however, I decided that the protection plan was in my interest:
  • I happened to be exactly the kind of customer who already had a filing cabinet dedicated to holding things like receipts for valuable purchases which might need to be returned.
  • Multiple clerks assured me that it was really true that I would simply walk back into the store with the broken headphones and get new ones.
  • The headphones cost $18; the protection plan cost $6. Although that would be steep for a normal consumer, I was absolutely positive that I would wear out the headphones within the two-year protection period. I was so sure because I always wear out headphones in months, not years.
Thus, for me in that case, the protection plan was worth the six dollars and I bought it, still with trepidation that Best Buy would renege and refuse my eventual attempt to make use of the protection plan.

Today, I made use of the protection plan. After eleven months, the well-loved and poorly-cared-for headphones officially gave up the ghost, degrading from scratchy one-ear-at-a-time inconsistent audio, to no audio at all. I went to the same Best Buy, marched right up to the counter with my original receipt and the stupid little plastic card they give you for being a customer, and demanded a new pair of headphones.

Did they give me a new pair of headphones? No, they did not. Instead they gave me store credit for the original purchase price, which sounds okay, but allows them to raise their prices and stick consumers with the difference. That is the kind of shenanigans I was worried about, but in my case the rise in price was a forgettable two cents.

I bought the same item, for essentially the same price, and I also bought a protection plan for the new headphones. My total cost today was $6.32, which probably reflects two cents in higher price and thirty cents in taxes, but I didn't care enough to look carefully. The way I see it, I bought today's headphones for $6 a year ago, and today I bought a pair of headphones for $6.32 which I will acquire about a year from now. Only death will prevent me from getting my next pair of headphones. In the grand scheme of consumer protection plans, I consider myself a winner.

Please note that despite this one instance of a consumer finding value in a protection plan, I do not recommend that any other consumer ever buy one unless they are absolutely positive they will take full advantage of it, nor do I recommend that any consumer ever shop at Best Buy. Protection plans are almost always for suckers, and Best Buy is almost always the worst buy.

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