Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 31, 1993 TAG: 9303310007
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: SANDRA BROWN KELLY
DATELINE: LENGTH: Long
There even are extended warranties for upholstered furniture covered with Scotchgard-treated fabric, carrying guarantees of stain resistance.
The invitations to contract for future service sometimes come even when consumers already have turned down service contracts when they bought the merchandise.
Service contracts are, in fact, good money-makers. But are companies willing to provide the data consumers need to decide whether to buy them?
Consider this encounter:
After still another mailer from Whirlpool Corp. offering a service contract on a KitchenAid dishwasher, I decided to find out if I really needed one. The last service contract I purchased was for a gigantic microwave oven that wouldn't die but had to be hauled to the repair center for its checkup.
Through Whirlpool's toll-free number, I talked my way through a couple of workers and finally got to Monica, who was in the customer relations department in some never-identified city. With 800 numbers, it's usually impossible to know where you're calling, and people like Monica never seem to have last names.
"What's the breakdown rate for my KitchenAid dishwasher?" I asked.
"We don't have actual rates, not something we could give out to the public," she said. "That's for our engineers or top executives. What we use is the government life-expectancy chart for appliances."
"Is that the rate for my KitchenAid? I thought Whirlpool was a good, dependable appliance, better than some others," I countered.
"It's just a general life expectancy chart," said Monica.
However, she said, it likely would be seven or eight years before there was any real problem with the dishwasher. So I asked what a service contract would cost on a 7-year-old machine. That information wasn't available, but if I bought now, it would cost $144.05 for the first three years.
Past experience has taught me that the cost of a service contract rises with the age of the product it covers. You've gotten those calls: "If you renew now, you can avoid the increase."
So, if the KitchenAid keeps washing dishes, as its manufacturer claims it will do, the cost of a service contract eventually could come close to replacement costs about the time the machine gurgles its last.
As Monica said, a service contract "is like insurance."
A gamble.
However, for a consumer wanting to even the odds, there are two publications that might help:
"Consumers Should Know About Service Contracts and Repair Services," by the Electronic Industries Association, item 586Z and free.
"Auto Service Contracts" by the Federal Trade Commission, item 402Z, costs 50 cents.
To order them, send name, address, item numbers and fee to R. Woods, Consumer Information Center, Pueblo, Colo. 81009.
And be patient with sales people when they ask if you want to buy a service contract. It's part of their job to ask.
In recent weeks, several workers for a major Roanoke Valley store said their manager had been pressing for more service contracts because other items weren't selling so well.
Some retailers even require a salesperson to sign a statement saying a contract was offered to a customer. This keeps the salesperson aware of the "product."
One worker in a store's home furnishings department, for example, said his quota is to sell service contracts that equal 6 percent of his overall sales.
Quit-smoking coupon
Not to be outdone by cigarette manufacturers and their promotions, ProStep, which makes nicotine patches to help people stop smoking, is offering a discount to its customers.
People who stay on ProStep for six weeks can keep their receipts and box tops and get a rebate. The idea is to get the per-day cost of the patches close to the cost of a pack of cigs.
Credit card refund
If you paid for a credit card from MDM Interests Inc. you never received, the state Division of Consumer Affairs will provide the form for reimbursement of the fee.
As part of a Federal Trade Commission settlement of a case against MDM Interests, money is available to reimburse consumers who were charged $50 when they called a 900 number for the credit card.
MDM's program appeared to guarantee that consumers would receive a Visa or Mastercard if they called. But callers got a booklet of information instead of a credit card.
More than 75 company names were used in the MDM program, including Direct Consumer Services, F&F Financial, H.E.F.A., International Credit Limited ("ICL"), Liberty First National, National Lottery Hotline, S&D Marketing, Success Marketing Inc. and Transglobal Telecorp, using the name American Credit System.
Not all of the $50 will be refunded. The amount depends on how many people apply before the May 1 deadline. To obtain a claim form, send request to Division of Consumer Affairs, Commonwealth of Virginia, P.O. Box 1163, Richmond 23209, Mark your letter to the attention of the Consumer Education Manager.
The completed form must be sent by May 1 to FTC vs. MDM Interests Inc., Gilardi & Co., P.O. 8040, San Rafael, Calif. 94901.
by CNB