Ritz in bankruptcy again....

Started Jun 23, 2012 | Discussions thread
tqlla
Senior MemberPosts: 1,452Gear list
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Re: Ritz in bankruptcy again....
In reply to cplunk, Jun 27, 2012

You are describing an ADH plan, accidental damage from handling/ESP plan. Usually, they are much more expensive(20-35% of the cost). Also, there are a lot of honest people who buy them. People with Children, or clumbsy people... or people that are just afraid of breaking a $1000 camera.

If you have an ADH from Sony, they will repair your camera or give you the same refurbished camera. Which cuts down on fraud. (Since its not advantageous to break a perfectly working camera)

Even with fraud, ADH plans are still very profitable, otherwise best buy wouldnt sell them.

cplunk wrote:

tqlla wrote:

Usually, people dont use the ESPs, which is why they are profitable. IE, sell 20 ESPs for $60/ea= $1200. Repair one camera for $200. Profit = $1000

Roy Dane wrote:

Hi Cy

The ESPs were only profitable if the customer never used it. I remember one customer of ours who bought a $150 - $200 dollar camera with a 3 year ESP for her daughter.

It would be interesting to see some actual numbers on the amount of people who bought them and how many then used them. And some details on that.

My assumption is that most people wouldn't buy them.

And a sizable percentage of the people who did would use them, with a small number (but large enough to be a big issue) going to a level of abuse on these plans. It's not unheard of for people that have similar plans on similar electronics to return old devices in order to get upgrades, once there original version is obsolete and can't be replaced, they just break it. Or they're just careless.

For most people that are going to take care of there equipment, and not assume they can get free upgrades with the plan, it's a waste of money for them. If it wasn't why would the company bother selling the plans?

I've had two cameras break, one that I pretty clearly smashed when it was 3-4 years old (it was in a pocket while I was sledding, and I came down pretty hard on it), and a second that somehow just stopped working after getting left in the trunk of a car all day (in Thailand, 100+ degrees outside). The first one I replaced, it was getting old already, past time for an upgrade. The second was actually repaired by the Sony service center in Bangkok for cheap. With the 5-6 other cameras I have the have gotten upgraded or replaced, and still work just fine, I'd be loosing money buying service plans for all of them.

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