Economics
Whether an extended service plan is worth the extra cost depends on the item and the perceived value by the consumer. Basic service plans on desktop computers, for example, typically come close to the actual average repair cost of a system, with the retailer using the service plan as a way to keep the customer from going to a competing service center. Support options can be beneficial to consumers who are unfamiliar with the use and maintenance of a computer.
Replacement options may present an advantage over an RMA if the customer is disrupted enough by a product's absence (such as computer upgrades), but the low failure rate of the products and the ability to buy temporary substitutes usually offsets the price. Some items such as low-end headphones may consistently fail before the end of the coverage period, which can be advantageous.
Read more about this topic: Service Plan
Famous quotes containing the word economics:
“Women’s battle for financial equality has barely been joined, much less won. Society still traditionally assigns to woman the role of money-handler rather than money-maker, and our assigned specialty is far more likely to be home economics than financial economics.”
—Paula Nelson (b. 1945)
“I am not prepared to accept the economics of a housewife.”
—Jacques Chirac (b. 1932)
“There is no such thing as a free lunch.”
—Anonymous.
An axiom from economics popular in the 1960s, the words have no known source, though have been dated to the 1840s, when they were used in saloons where snacks were offered to customers. Ascribed to an Italian immigrant outside Grand Central Station, New York, in Alistair Cooke’s America (epilogue, 1973)