When to present an extended warranty: Pre- vs. post-purchasing a product

Abstract

This research examines a temporal factor's influence—showing an extended warranty before versus after consumers purchase a product—on consumers' likelihood of purchasing the warranties. Our results show that consumers are more likely to purchase a warranty before committing to a product rather than after doing so. These results appear to result from differing mental construals. Before committing to purchase, mental construals conditioned on product failures are more accessible; accordingly, consumers are more likely to consider buying a warranty. However, consumers who have already committed to purchase the product have mental construals that over-represent positive features of the product; thus, these consumers are not compelled to buy a warranty. Four studies provide converging evidence via scenarios and behavioral measures. Our research suggests that offering extended warranties before the product purchase decision can be an effective strategy to increase warranty sales.