Target Follows Wal-Mart's Lead On CE Service Plans

MINNEAPOLIS — National discount chains have been late to the party in offering their shoppers extended warranties on consumer electronics.

But given the increasing complexity of CE devices, and the increasingly competitive marketplace, the discount channel is closing the service plan gap. One year after Wal-Mart began offering 24-month product care plans administered by NEW on TVs and computers priced over $300, Target entered the extended service plan (ESP) waters in time for the just-completed holiday selling season.

According to the chain, the program was prompted by customer demand for increased coverage on major CE purchases.

Target now offers ESPs in four price points and is employing an identification sticker concept, in which customers apply a sticker to their CE device and call the printed phone number to arrange for service. The approach was designed as a convenience that "eliminates the hassles commonly associated with obtaining service under an extended service plan after the loss of the receipt," the retailer said.

"Target is simplifying the extended service plan for our guests, keeping in line with our goal of conveniently providing guests with products and services that make their lives easier," said Steve Eastman, Target's VP/general merchandise manger for electronics.

The four ESPs offer a three-year term of coverage for all CE products except contract mobile handsets, and prices are based on the retail price point of the product to be insured. The sliding scale is as follows:

• Products under $200: $19
• Products between $200 and $500: $29
• Products between $500 and $1,000: $59
• Products over $1,000: $79

The plans can be bought at the time of the CE purchase or up to three months afterward, the company said, although the three-year term of coverage begins on the date of purchase. The plans are packaged, with the identification sticker, to make them "easily recognizable and easy to purchase" with Target's CE departments, the company said.