Electronics Gotchas

Consumers are expected to spend more than $200 billion on electronics this year. But some retailer policies could prompt you to spend more than planned. Kelli Grant, Senior Consumer Reporter for SmartMoney.com fills us in on five to watch out for.

Expect a push to buy a warranty, service plan or other protections -- even on items as cheap as a $20 cordless phone. Analysts say the retailers are pushing harder on those because profit margins can top 50%, making up for slimmer margins on the gadgets themselves and profit lost to digital media. But there's little need to buy. You can usually get free protection by paying with a credit card that doubles warranties.

Experts say retailers often try to sell you more than you need. Home theater HDMI cables, camera memory cards and printer ink are all more profitable for retailers than the gadgets themselves. They may also try to sell a higher-end or newer model of the gadget itself, even if one that's more basic or a little older fits the shoppers' needs just fine. That's good reason to go in having researched the options to know what you need, and want.

Retailers often tout policies that will match competitors' prices. But experts say finding an exact price match is easier said than done. Stores often negotiate with manufacturers to get exclusive model numbers, which means you won't find that exact TV or laptop elsewhere. And many won't match their own dot-com's prices. Shoppers' best bet is to do the comparisons at home, instead of on the fly.

Problems with returns are the biggest complaint about electronics purchases, according to the Better Business Bureau. It's no surprise: department stores often have separate return policies for electronics and electronics retailers have different policies for different products. Conditions can be fairly restrictive, with some stores allowing exchanges only, and others charging for return shipping or restocking fees. Read the policy before you buy.

Take sales ads with a grain of salt. It's common for online retailers to offer fast sales that end as soon as they've sold a predetermined amount of inventory. Stores also often offer some of their bigger deals on items that are older or less advanced. Assess the specs before buying, and watch the timing -- a study found gadget prices are typically at their cheapest on Mondays.

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