The Co-operative has become the first retailer to offer cost-price extended warranties for products sold on its electricals site.
Co-op Electrical, which is the group’s only ecommerce business, hopes to stand out in the crowded market with the initiative.
Warranties have proved a controversial consumer issue, with some businesses being accused of charging shoppers over the odds for them as a way to make money. Such practices have been investigated by the OFT.
Co-op said the warranty market for electrical goods is estimated to be worth £1bn a year in the UK, adding that “in some cases consumers can pay almost as much for the warranty as the product it was purchased to cover”.
Co-operative Electrical managing director James Holland, said: “A significant number of consumers seek the reassurance offered by an extended warranty, however we believe that this market should be easier to understand and represent real value, particularly when you compare the price of the warranty with the actual price of the electrical product. In most cases it is just far too expensive.
“In line with our Group purpose, we are championing a better way of doing business by providing at cost, extended warranties which offer real added benefits for those consumers that want peace of mind.”
Holland said the initiative will add to Co-op’s other point of differences, which include free delivery.
“This will attract new customers,” said Holland. “We know it will be very well received.”
The warranty covers against breakdown or accidental damage, as well as food loss in the case of freezer breakdown. If a product has to be repaired for a third time it will automatically be replaced with a new one.