Saying “service contract” or “extended warranty” can evoke images of salespeople aggressively pushing that add-on sale to the new refrigerator or TV you’re buying. Some err on the side of caution and will always, always buy the extra coverage, just in case. Others are just too skeptical or thrifty and may have been burned by spending more for unnecessary coverage. There are, however, times when a service contract is a smart investment.
If the new item is expensive, it would be worth it to extend the life of that purchase. The cost of a service contract is a great deal less than the cost to replace the item if a terrible fate should befall it. Typically, the more expensive an item is, the more expensive repairs are, too.
It Needs to Last
If the item needs to last for several years, a service contract would ensure it makes it that long. Manufacturer warranties usually don’t last as long as you’d want your new item to last. Service contracts, however, last longer and can be renewed. Manufacturer warranties also cover repairs for manufacturer defects only. While service contracts cover repairs for defects and damage as well as regular maintenance to keep the item working its best.
It’s New Technology
A service contract would cover any glitches that tend to come along with brand new, cutting-edge technology. Without a good long track-record of performance, you can’t predict what problems might arise or when. For example, Microsoft’s Xbox 360 was wildly popular when it was released in November 2005, but problem after problem in the system kept popping up, even after the original manufacturer 90-day warranty had expired. Out-of-warranty repairs cost $140 each, which was almost 1/3 the original cost of a new Xbox. However, a 2-year extended warranty from Microsoft would have cost only $60.
It’ll Be Used A Lot
If the item is an integral part of your business and will be used extensively throughout the day, a service contract will greatly reduce your downtime should something happen to your equipment. Manufacturer warranties can take weeks to repair your equipment, which leads to lost productivity and profits. Service contracts typically get repairs done in a matter of days. Some even offer to send a replacement unit overnight for you to use while your item is being repaired.
It’ll be in a Rough Environment
If the item will be exposed to dirt, grime, bumps, and drops on a regular basis, there’s a higher chance of damage or failure. Even if the item was designed to work in rough environments, everything has its limits. Plus, items in such environments would benefit even more from the regular maintenance that service contracts offer.
The User is Very Busy
If the person using the item has a high workload, it’s more likely that they’ll be forgetful or distracted and end up losing the item or leaving it where it could be damaged. It’s good to have that service contract, especially if the item is small and easily misplaced, like a cell phone.
You can apply these tips to any item that has a service contract available. If you have any questions about service contracts for barcoding equipment in particular, please feel free to drop us a line or an email. We’d be happy to help steer you in the right direction.