Consumer NZ has questioned the worth of Noel Leeming's new "Protection" policy, which combines an extended warranty with insurance.
"Noel Leeming's 'Protection' policy is essentially an extended warranty with some insurance for accidental damage and theft added on – something your contents insurance will already provide cover for," Consumer head of research Jessica Wilson said after the Herald asked her to analyse the new policy.
"We can't see much, if anything, to like about the policy. It's not cheap – you'll pay about $240 for a 12-month policy bought with a $1480 laptop," Wilson said.
"The Consumer Guarantees Act already provides strong after-sales protection if an item you buy from a retailer turns out to be faulty. You don't need to buy an extended warranty product like this.
"And if you've already got contents insurance, you'll have cover if the item is stolen or damaged accidentally."
Last December, Noel Leeming was fined $200,000 for misleading consumers about their rights to return faulty goods after several complaints led to an investigation by the Commerce Commission.
The company, owned by The Warehouse Group, earlier pleaded guilty to eight charges under the Fair Trading Act.
Today, Noel Leeming chief executive Tim Edwards stood firmly by the new plan. He told the Herald, "Our Noel Leeming Protection service plan offerings have been designed following extensive feedback from our customers, and are designed to help customers when the CGA doesn't apply - giving them clarity and comfort that they're covered against most situations."
He added, "A large percentage of Kiwis don't have any contents insurance, and/or prefer a 'spot' or single product insurance model with damage and theft protection - particularly with high-value technology purchases - which is an example of what we've provided with our protection plans."
The ComCom, and Consumer have both criticised various retailers' communications around extended warranties, given the Consumer Guarantees Act specifies a good must last for a reasonable amount of time or be replaced, repaired or refunded - regardless of the warranty period designated by a manufacturer (see Consumer's quick guide to the CGA here ).
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Retailers have argued that their extended warranties often go beyond the CGA by providing a replacement product during a repair, guaranteeing a fast-turnaround repair or by covering purchases for business (the CGA only covers personal use).
This morning, Noel Leeming said its new Protection pan offers customers the ability to lock-in accidental damage cover, theft protection, automatic replacement for items under $500 and blockage cover, just to name a few. This means that customers can now be covered for most eventualities that can affect the use of their technology and appliances, providing peace of mind that they won't be without their item for long.
Edwards said that being able to offer customers a full suite of add-ons to their purchases is a great way to enhance customer confidence in their decision making.
"We've noticed that consumers nowadays are interested in a more holistic solution, looking for protection programmes that better support the way they use their technology and appliances," Edwards said.
"We're confident that this product goes over and above any competitor's offer, is market-leading, and a New Zealand first in consumer purchase protection."