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They’ve always got the same question for you when you check out at Best Buy (or any other big box store):

“Would you like to purchase an extended warranty, service protection plan or product replacement plan?”

And your answer to this question should always be the same: “Heck no!”

Retailers make big bucks off of extended warranties for several reasons. Most of all, it’s fear playing into their hands.

“For only $50 extra dollars, your product will be covered for any manufacturer defects for an additional one year.”

Standing at the front of the line at checkout with thirty-two impatient holiday shoppers, it can be hard to crunch the numbers, and most of us err on the side of caution. The question comes down to “Should I forfeit $50 dollars now and potentially save $200 when the thing craps out in four years or should I save my $50 and be out $200 if it turns out to be a piece of junk?”

But the fact of the matter is that if the computer, air conditioner or other electronic gizmo you are buying is a lemon, it’s likely going to eat it long before the manufacturer’s warranty (which is included free with your purchase and covers one to three years) runs out. In truth, you’re far more likely to get tired of your gadget, drop it in a puddle or be ready for an upgrade by the time your extended warranty kicks in – and none of those are covered by the retailer’s plan. At the end of the day, most people never exercise their extended warranty, making it pure profit for the retailer.

The probability that the extended warranty will be moot by the time it matters is one compelling reason to tell the clerk to take his service plan and shove it. But a better reason is that your credit card likely already entitles you to an extended warranty – for free.

Visa, Mastercard and American Express all offer free extended warranties on credit card purchases for most accounts. It’s absolutely free and will typically extend the warranty on your laptop, plasma TV or margarita blender for an extra year for plans that are three years or less. But there’s lots of paperwork involved.

Most of these services work roughly the same – but here’s the process from start to finish for Visa’s Warranty Manager, which is offered to Chase Freedom Visa cardholders.

Step One – Buy the Product with your Visa

After ringing up your purchase, make sure you get a copy of your receipt and the credit card slip that you sign. You may have to ask for it – especially since a lot of places (Best Buy, for example) use those Magnadoodle-esque digital signature pads. Other times, the signature will conveniently show up on your receipt. It’s important that you have a document showing the item purchased and the last four digits of your account number. You can also include your monthly statement with the purchase highlighted.

Step Two – Sign up for Visa Warranty Manager Service

Go to Visa’s Warranty Manager Service page and register your card. It’ll take you offsite to do this and you’ll be asked to enter your credit card number – but don’t worry. This is just to verify that your credit card carries the service. You won’t be charged.

Follow the on-screen instructions and you’re account will be all setup.

Step Three – Register Your Product

Once you’re logged in, you’ll see a link to “Register a Product” on the left hand side. Click it.

You’ll be asked to enter the type of item purchased, manufacturer, serial number, date of purchase and price of purchase (not including tax).

After you submit that information, they’ll mail you a PDF of the form that you have to verify, print out and mail through USPS to “Enhancement Services” out in Montana (?). Along with this form you have to include your receipt, the signed credit authorization slip and a copy of the manufacturer’s warranty. You can find the manufacturer’s warranty information included in the box somewhere – usually labeled as “coverage plan” or “warranty card.” This, they say, will “expedite” the process when you file a claim.

Step Four – File a Claim

When your product fails, you have 60 days to file a claim. You can do so at the Warranty Manager Service page by clicking “file a claim.” Once you file your claim, you’ll be assigned a claim number.

Most of the required documentation will already be on file from when you registered the product. Occasionally, the claims department will ask you to provide a repair estimate. You can get this by calling a “local authorized service center” – if you’re not sure what qualifies, call 1-800-882-8057 for a referral.

Step Five – Get it Fixed or Replaced

Your claim will be approved or denied within five business days. After that, you can:

• Mail your product in to have it fixed or replaced
• Have it repaired at an authorized service center and be reimbursed
• Purchase a replacement and be reimbursed

For the latter two routes, it’s important that you meet the program requirements – you may wish to verify the stipulations on the phone before going ahead with a purchase or repair. If approved, you’ll be mailed a check to reimburse you within five to seven days. The reimbursement cannot exceed the original purchase price.

And that’s it. You’ll likely never have to use this, since most manufacturer’s warranties are sufficient for the lifetime of a purchase.  But if nothing else, the free extended warranty offered by your credit card issuer should be one additional reason why you should never buy a retailer’s extended protection plan.

Have you ever filed a claim through your credit card’s extended warranty service? Tell us about your experience in the comments.

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