Selling extended warranties

Selling extended warranties on domestic electrical goods? If you do, you'll need to comply with The Supply of Extended Warranties on Domestic Electrical Goods Order 2005. Here are some of the things you need to know:

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When you provide extended warranties on domestic electrical goods

• In your stores, advertisements, catalogues and online you must state, clearly and legibly, the price and duration of one applicable warranty next to the price of the goods or range of goods. (This obligation does not apply to your advertisements if you have sold less than £10,000 worth (including VAT) of extended warranties in the previous business year.)
  
• In stores, you must also make clear that the purchase of an extended warranty is optional.
  
• In stores, catalogues and online you must make prominently available the following information:

          - what consumers' statutory rights are when buying an extended warranty and where they can get
            more information on these

          - that extended warranties can be obtained elsewhere

          - that household insurance may be relevant to the purchase of a electrical goods

          - that an extended warranty does not have to be purchased at the same time as the goods

          - details of any cancellation and termination rights

          - a statement on the financial protection consumers have if the provider of the extended warranty
            goes out of business

          - whether or not the extended warranty will come to an end if a claim is made.

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Providing quotes to in-store customers

• If the extended warranty costs over £20 (including VAT), you must provide in- store consumers with a written price quote which states prominently:

          - the price and duration of the extended warranty

          - that the quoted price holds for at least 30 days

          - that extended warranties may be available elsewhere

          - that the extended warranty does not have to be bought at the same time as the goods

          - consumers' cancellation and termination rights (see below)

          - whether or not the extended warranty will come to an end if a claim is made.

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When a warranty lasts over a year

• Consumers can:

          - cancel it within 45 days of buying it and get a full refund where no claims have been made

          - get a pro-rata refund if they want to cancel the extended warranty after 45 days, even if a claim
            has been made

• When warranties over a year long cost over £20 (including VAT) you must notify consumers of their cancellation rights in writing, no more than 24 days after they bought the warranty
  
• However, different cancellation and termination rights apply to extended warranties that are distance contracts to which European Directive 2002/65/EC applies.

Download Extended warranties guidance (pdf 56kb)

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More information

Visit www.opsi.gov.uk/SI/si2005/20050037.htm

Note that the advice in this leaflet is intended only as a guide to your key obligations. It is not a substitute for the Supply of Extended Warranties on Domestic Electrical Goods Order 2005. 
 
October 2010  

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