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How Extended Warranties Can Boost Sales for Retailers Over the Holiday Season

Although it may seem like beach season was just yesterday, the holidays will be here before we know it. The season of giving is notorious for helping retailers get out of the red and into the black, and offering extended service programs and warranties to your customers during this time can be particularly lucrative.

In addition to boosting sales, a recent study done by Ipsos suggests that extended warranties also provide customers with the peace of mind and feeling that you have their best interest in mind, always a good thing when trying to build brand and company loyalty among consumers.  Assurant Solutions’ Consumer Profile and Interest Study found that those who purchase extended warranties are more than twice as likely to recommend the retail store where they shop to others.

Additionally, endorsements from customers help retailers differentiate themselves from their competitors, a huge when for leading the industry, achieving repeat customers, and improving customer satisfaction. In today’s environment, this is absolutely critical. A shopper’s praise or complaint can go viral in an instant, which can have a significant impact on the reputation of a business.

In research presented at the Warranty Chain Management Conference last year,  retailers felt a strong emotional attachment between service contract buyers and their products than was seen with non-buyers.  Linda Mortensen, The Warranty Group's Market Research & Competitive Intelligence Manager states, “There were more attitudinal statements about how attached they were to their products and felt a need to protect it.”

Retailers that don’t take the opportunity to sell warranties often miss out on making a valuable connection. Customers who feel as though you are thinking about them are more likely to be return shoppers. The following are some of the best ways that selling extending warranties can boost your sales this holiday shopping season and create loyal shoppers throughout the year:

Added Value

Bundling an extended warranty with a manufacturer’s warranty at the time of sale is one of the best ways to maximize the opportunity to offer an extended warranty without a second sales effort. During the holiday season, many customers are purchasing items as gifts, which is why from day one they will want to make sure their purchase is covered.

It could be extremely embarrassing for a gift-giver to have an item break and not have a warranty, thus making the gift completely useless. Encourage your customers to boost the value of their gift by helping them realize the importance a warranty brings to any gift they give a friend or loved one.

Warranty Expiring

It’s a little known fact that manufacturer’s warranties do not last long.  Offering customers an extended warranty before the manufacturer’s warranty expires can be a great way to boost sales, but you don’t want to lose the opportunity to sell to them before the 30-day time frame ends. Once they have made the purchase and walked out the door, don’t think all hope lost.

Get creative by initiating a remarketing campaign to remind them that time is of the essence to protect their purchase. Perhaps suggesting they get the warranty prior to the gift-giving holiday or even before the end of the year. Let your customers know some of the problems that they may experience after the manufacturer’s warranty has expired. Capture their attention and let them know the importance of an extended warranty before their coverage has lapsed.


The holiday seasons is when shoppers are least likely to penny-pinch. In many cases, if they have a budget at all, they know they probably won’t stick to it. So take the opportunity to sell a warranty and any other additional products to the customer. This is the moment when customers are more likely open to making purchases they may not make any other time of the year. Helping them see the value of keeping their purchased equipment or gift working, can pay off.

Another thing to consider is the fact that if your customer is planning on buying a warranty for their purchase, they will be willing to buy one for themselves, too. Take the time to not only sell an extended warranty to your customer for the item they are purchasing, but to also encourage them to purchase one their own product purchase.

This is an excellent time for you to show your concern for their own needs and let them know that the best gift they could give themselves this season is a sense of security and peace of mind for their own purchases.

Amazon Offers Warranties, Too

Amazon is offering warranties on top of manufacturer’s warranties. Essentially, they are making money that should be boosting your own business’ bottom line. According to a North American Technolographics Marketing and Mobile Internet Online Survey, 66 percent of shoppers moved from web to store, store to web or web to phone to make purchases. The same study also found that consumers’ interest in extended warranties directly addresses their financial worries by protecting their investment in the event that their purchase is damaged or broken.

Because Amazon is a trusted brand, many consumers may feel compelled to purchase the warranty from them. Instead, retailers can strengthen their relationship with their customers by directly interacting with your customers and letting them know your extended warranty is all they need. Give them the confidence they are looking for by showing you care enough to sell them your own warranty, and not a third party warranty through Amazon.  

When maximized, these top strategies can boost sales in any service-based business. According to Warranty Week, sales of extended warranties reached $34.5 billion in gross premiums paid last year. So for a truly happy holiday season, implement these tactics and you should see an increase in sales before the first snowfall and well into the New Year.

If you’re interested in offering Mulberry to your customers, let’s get connected! Send us an email at sales@getmulberry.com or click here to get started.

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Amanda Caswell

About the author

Amanda is an experienced writer with a bachelors degree in Creative Writing from NYU. She is also certified by the American College of Sports Medicine and the American School of Nutrition & Personal Training.

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