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Why to avoid gambling with ServiceNet warranties

In May 2010 I had a dilemma. My brother’s birthday had just passed and I couldn’t think of a gift to get him. After much thought I decided something that he would like. A hard drive. He loves music and even makes his own, so storing it and keeping his machine backed up takes up a lot of disk space. So I went to Newegg.com, having good previous experiences with them, to see what deals on hard drives were on sale. Unfortunately nothing seemed to be in my price range, until I found one item. It was almost too good to be true… and unfortunately that would be the case later on. It was a 1TB Western Digital external hard drive, this drive had a FireWire port, which was great for my brother’s Mac. We are both FireWire fans, so the thought of me buying him a USB external drive was out of the question. For $69 it was a pretty good deal, but here’s the catch, it was refurbished. I would usually stray away from these drives, but Newegg offered a warranty through a company called ServiceNet. I was intrigued, I had never heard of the service before, but since Newegg offered the option for $16.99 for a 2 year replacement warranty. Fearing that a rectified drive would fail before it’s standard warranty I reluctantly bought the ServiceNet warranty. The drive shipped soon after.

Tom loved the gift. He could use the hard drive space badly. But what I thought would be a stress-free gift soon turned out to be a nightmare. In late 2011 Tom complained that the drive was making odd noises and sometimes failing to show itself. Shortly after it started making dreaded clicking noises, the sure telling sign of a failing hard drive. Thankfully the files stored on the drive were backed up elsewhere, so losing the data wasn’t a concern. So I figured things were okay. I bought the ServiceNet replacement warranty, so he would get a replacement drive without issue. Right? Sadly this would not be the case.

I forwarded Tom the information (sales order receipt, etc) so he can call up ServiceNet himself. I was a bit busy at the time and I figured he could handle it himself. Unfortunately they required me to call up directly. I ended up filing the claim online for the hard drive. I would soon be contacted asking to return the hard drive to them, so they can replace the item. “Great!” I thought, this gamble has paid off. Weeks go by and I didn’t receive an updated status about the drive. I was about to call up when I receive a odd email on January 10th, 2012. It’s from Newegg. The subject reads “Newegg.com – Gift Card from Service Net”. So off the bat I’m confused. A gift card? I didn’t request a gif card. I requested a replacement!

Well it turns out that due to the flood in the Thailands Western Digital hard drive prices have skyrocketed. So for the warranty company ServiceNet, they took the cheap route. Refunding me $69.99 instead of paying even a penny or a dollar more to replace the actual item. I forward the email to my brother and tell him that he wasn’t going to get a replacement hard drive. He was discouraged, but thought that if he called up to ServiceNet they would see their mistake and would just replace the drive instead. However this was not the case. They refused to talk to him and wanted to talk to… that’s right. Me again.

At my office things were ramping up for our large yearly meeting. So I was beyond swamped in work to take time to call up and make a case about this. However my brother is obviously more concerned about this then I am, because it’s his hard drive. Finally getting around to it I make a call to ServiceNet in April 2012. I give the automated menu my case ID number and waited for someone to answer the line. A man picks up the phone and asks me for the number again. I comply and give him the information. Right off the bat I can tell this isn’t going to end well.

He points out that I have already received a gift card for the item and asks what I’m calling about. I explain the situation. I bought the hard drive with the extended warranty and expected a replacement product. What I got was a gift card instead. I request if there is a replacement device they could send instead, or if they would cover the $30 or $50 price ($30 for a USB replacement, $50 for a nicer FireWire model replacement) difference to a new replacement hard drive. Immediately he becomes defensive. Pulling out terms of the warranty as if they were common knowledge to everyone, which it obviously was to him. He elaborates that there is a clause in the warranty stating that if the cost of the time fluctuates or increases the ServiceNet company can opt to buy-out your warranty contract. Basically giving you your money back, and taking your item. I understand what they’re doing, but that doesn’t mean I like it. I explain that the reason I bought the “Replacement Extended Warranty” (as it is worded on my receipt) is so that I could replace the item should it fail, which I had a hunch it just might. He sights the warranty clauses again, and asks if I want to ‘dispute’ the terms of the warranty. This time his voice sounds more intimidating. I told him I don’t want to dispute the warranty, I understand the terms, but that in my opinion it was a shady practice to offer a replacement, only to cheap out and refund the cost of the item. I clearly wasn’t getting anywhere, so I ended the call.

So I paid $69.99, plus $16.99 for the ServiceNet “warranty”, plus $4.99 shipping, plus about $5.00 in tax. Totaling around $97.00. All I have now is a $69.99 gift card from Newegg that won’t get me a replacement item. The cheapest 1TB hard drive is $99, but it’s only USB. For $119 there is a Western Digital FireWire 1TB hard drive however. If ServiceNet offered me an extra gift card of $20 or $30 that would have been the end of it. At least it would have lessened the blow of having the hard drive fail.

So they have our broken hard drive and all I have is a gift card that won’t even cover the cost of a replacement hard drive. They mentioned that if they had a comparable model they would replace it, but were vague on their source of such items or if they ever would receive any. They blame Western Digital for raising the prices, and suggest I complain to them. They said they can never make an exception, not for anyone. If they make one exception they would be “opened to lawsuits”. Um okay… I don’t buy that.

So what it boils down to is this. You’re gambling when you buy a warranty, but that isn’t really anything new I suppose. ServiceNet knows that. In fact, they thrive on it. They obviously don’t care, or doesn’t want to care about their customer’s issues. It’s ironic, the company quote showcased on their webpage reads “Our aggressive and focused goal is to provide the most outstanding service to our clients…”. But I think they should update their quote to “No exceptions. Ever.”

I will never buy a ServiceNet warranty ever again. I’d rather take my chances with a product then pay good money for them to find every way possible to weasel out of the original warranty agreement and to screw me out of a replacement product.

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