Is SquareTrade legit, or is SquareTrade a scam. It gets complicated so SquareTrade reviews are a good place to start to see if it fits your needs. Our SquareTrade review is based on experience, and reading the fine print.
Warranty Scam History
The economy is a little shaky, but you still have needs and wants. Everyone else is in the same boat, including businesses who still have to sell products if they want to make a profit. If you have a good cash reserve and the opportunity arises, now could be a good time to get a great deal on things like electronics, washers and dryers, televisions, kitchen appliances and so on.
Last century, big box electronics shops like Circuit City began competing against the lower prices and better deals found online by offering prices that were just as good. However, that meant they didn’t make very much profit because of the overhead of running a store. They countered by aggressively selling extended warranties to their customers. Soon, virtually all of the profit from some electronics chains was from warranties.
Unfortunately for them, but fortunately for everyone else, customers soon caught on and came prepared for the warranty hard sell and more importantly, came prepared to say no. In the process they saved themselves from wasting a fortune, and put Circuit City and others like it out of business.
Is SquareTrade Legit or a Scam?
That doesn’t mean that retailers have stopped trying to sell extended warranties, far from it. Particularly on electronic goods, appliances, and televisions, most purchases come with at least a quick offer to purchase a warranty, if not a much harder sale. Either way, extended warranties are almost always a bad deal for consumers, not because a warranty is a bad idea, but rather because they are almost always overpriced.
The ones that are not outrageously expensive generally have “features” that make them unattractive as well such as getting a percentage of the cost based on how long you’ve used it, or worse, getting an “equivalent” replacement that usually isn’t even close to being equivalent.
But, thanks to a company called Square Trade, you no longer have to choose between worrying about what happens if your new purchase breaks, or overpaying for some 50/50 shot on an extended warranty.
Wondering how does Zelle work?
The premise behind SquareTrade is that it is possible to make money on warranties by aggregating failures and spreading out risk like insurance companies. Then, selling the warranty at a fair and reasonable price assures that more warranties will be sold. Since nothing happens to most items, there is plenty of money to be made without treating anyone like a sucker.
The best part is that instead of having to keep receipts and paperwork and hope you can find them if something goes wrong, you setup an account at Square Trade and use it to manage all of your warranties whether they are from Costco, or Amazon, or your local shop, all in one place.
Chances are a Square Trade warranty will cost you half of what the retailer is offering you and unlike the retailer warranty, there is no high pressure to buy now. Sleep on it and buy the warranty in the morning if you think it is still a good idea. Most SquareTrade warranties can be purchased within 15 to 30 days of original purchase.
Now, you can be covered, and not get robbed.
SquareTrade Fine Print
I could title this section, Why SquareTrade Is Not a Scam, but Why SquareTrade is a scam for people who don’t read the fine print.
It helps to think of SquareTrade as an insurance company. In fact, SquareTrade is owned by AllState.
Just like your other insurance policies, your SquareTrade warranty comes with terms, conditions, and exclusions. If you know about them up front, then SquareTrade warranties are often a great deal to get coverage you want. If you just click BUY, there is a real chance of disappointment.
Just like any other insurance policy, your SquareTrade warranty will have a list of things that are not covered (theft, intentional breakage, water?). It likely also has a deductible. Be sure you understand that list. – Remember you are not buying a, “Here’s your money back,” warranty. You are buying a, “Here is a replacement item, minus the $100 deductible,” or something like that, warranty.
Your SquareTrade Warranty will also have a policy on what you have to do to qualify for coverage, and most importantly what you will get if you use your warranty. — This isn’t AppleCare. (BTW, in the contest of AppleCare versus SquareTrade, AppleCare is better than SquareTrade — don’t mess around.)
Is it good to invest in gold now?
What SquareTrade Warranties Are Good?
Just like other insurance companies, SquareTrade is constantly revising the terms and pricing of its warranties based upon its experience. Items that break a lot get higher pricing. Events that are too common, and too costly to fix, get excluded from the base warranty, and so on.
That means the best SquareTrade warranty you got on furniture from Costco may not be a good deal for a SquareTrade warranty on electronics from NewEgg or eBay, or those appliances from Best Buy. READ THE FINE PRINT. Especially watch out for SquareTrade accidental damage exclusions.
Credit Card Warranties Versus SquareTrade Warranties
Credit card companies used to offer really great extended warranties on purchases for credit card holders. Part of the reason they offered these great warranties is that most people didn’t use them, so it was a great selling point that didn’t really cost them anything.
As credit card customers got more savvy, and the cost of these programs started going up, they cut back on how generous the automatic credit card warranty programs are. Be sure to read the fine print, and then READ IT AGAIN every year, because it may have changed.
Credit card warranties are better than SquareTrade warranties for certain products. Most commonly the rewards credit card offers an extension of one more year for your warranty. If you need longer, then SquareTrade warranties are better than credit card warranties because you can pick your term.
