Extended Warranty Benefits on Credit Cards “Compelling Given the Increase in Consumer Electronics Products” Comments CBSI President

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For decades banks that issue credit cards have often included benefits designed to protect consumers against retail and travel-related losses. As seasonal purchases in these categories take center stage, the value of Extended Warranties takes the spotlight.

“Credit card benefits such as Extended Warranty are even more compelling today given the increase in consumer electronic products available.”

Major credit card associations and credit card issuers started providing warranty extension programs as a complimentary benefit in the late 1980s.

“Benefits on card products are as common today as they were 30 years ago,” stated Bob Conte, President, CBSI. “Credit card benefits such as Extended Warranty are even more compelling today given the increase in consumer electronic products available.”

Consumer Reports also spotlights attention on the value of Extended Warranties, specifically, in its recent December 2012 issue, “Resist the Extended-Warranty Pitch”, which touts the value of Extended Warranty benefits provided by “Credit cards which automatically extend a manufacturer’s warranty by up to a year” on items purchased on those covered accounts.

The article appears in the Annual Electronics Issue highlighted by the cover theme “Best Tablets, Cameras, TVs Phones, E-Readers and More”* and critiques the value of service plans and Extended Warranty programs offered at point-of-sale by retailers. One of the key reasons noted to “resist the pitch” is due to the fact that the plastic in a customer’s wallet may already cover the purchase at no cost.

To this point, a BDO USA survey released on November 5th indicates, “A majority of CMOs (62%) say consumer electronics will be the strongest selling category in 2012”. The availability of extended warranty benefit programs could significantly affect consumer selection of payment method and credit card to complete purchases this holiday season.

But not all financial institutions offer benefits. As the article recommends, consumers should contact their issuing bank to determine what benefits their card provides. Terms and conditions may vary. Where offered, consumers are encouraged to make purchases for eligible items on their covered card accounts.

CBSI, founded in 1972, is a strategic product development and marketing agency specializing in loyalty solutions that assist financial organizations in the acquisition, activation, usage, and retention of customers. Contact CBSI at 914-381-5353 or follow them on Twitter: @CBSIServices.

*http://www.consumerreports.org/cro/magazine/2012/12/resist-the-extended-warranty-pitch/index.htm

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Ken Kraetzer
CBSI
(914) 630-3457
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Gihan Shahidy
CBSI
914-630-3451
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