When you buy a product at a big electronics store, sales folks always push the extended warranty on you. Some people buy them every time, just to be safe. Others flatly refuse before the salesperson can mouth the letter W. You should probably behave somewhere between these two extremes but lean toward politely saying no.

Stores see the extended warranty as pure profit. They cost a small amount of a salesperson's time and since most gadgets don't need repair, there's a huge profit margin. So does it ever make sense to buy one of these things?

You have to judge every warranty purchase on a case-by-case basis, but here are a few guidelines when making the call.

What do you get for free?
Remember that almost every piece of electronics you can buy has some kind of express manufacturer's warranty, although manufacturers have been trying to shrink the time period of their express warranties. However, every electronics item sold is covered under something called an implied warranty. The implied warranty of merchantability assures that any new item will work as reasonably expected. In most states, the implied warranty lasts forever.

Take a close look at the terms of any extended warranty being offered for sale. Rarely, (but it does happen) the extended warranty will give you no extra protection. A little less rare but still infrequent is a manufacturer's warranty that really gives you great service and protection for the long term. Some hard drives, for instance, come with a five-year warranty. Some come with none. Basically, make sure you're not paying for something you don't need.

Service contract vs. extended warranty
Often, salespeople will push the extended warranty as a so-called service contract to make you feel better. Sometimes, in fact, they're not lying. Any extended protection you pay for is really a service contract, not a warranty. So make sure you're getting extra service with it.

I bought a high-end VCR once (yes way back in the day) and purchased what amounted to a service contract. I stupidly stored my 19-inch TV on top of the VCR and crushed the cage that holds the tapes. I took it into the shop where I bought it with my extended warranty in hand. They fixed it with no questions asked.

That's the difference between a warranty and a service contract. A warranty is what you get free with the product. It will usually protect you only against defects in manufacture. If an accident happens, you're out of luck.

A service contract on the other hand can be more like what you get with some new cars: you get all the oil changes free for three years. If you take a baseball bat to your 60-inch HDTV, nobody will cover that, probably not even insurance. But if your lamp burns out on your DLP TV, the warranty will never cover that but the service contract might. Might is the operative word here.

Pay close attention to make sure you know what you're getting. Any warranty or service contract is in fact a legal contract, and it's in the store's best interest to not spend any money repairing your item in the future.

Price of the product matters
If you're buying a $70 DVD player, a $30 warranty makes no sense at all. Even a cheaper extended warranty may not make sense if the manufacturer has a good warranty on the product for free. Check if a more expensive model comes with a better manufacturer's warranty. It might save you money in the long term.

However, if you just dropped six grand on a huge plasma, the extended warranty becomes tempting, especially if it's a service contract. When you're parting with that much cash, a small percentage could be worth it for the peace of mind you'll get. Just remember, every product is under warranty, and chances are you probably won't use the service contract within the time period allowed.

When you just don't want the hassle
Another thing to consider when relying on manufacturers' express warranties is the hassle. Most legal sites will tell you flat out not to pay for extended warranties. Most legal sites are also written by lawyers.

You may be legally on solid ground with your situation, but that doesn't mean every big corporation will bow to your will. This will be true especially if what you need fixed in the future is in a gray area where the manufacturer's warranty is concerned. The sad fact is, if the warranty is cheap enough, it may make any repairs in the future much easier to get. When you look at is that way, it sounds like giving in to bribery, but it's a consideration nonetheless.

Only you can decide
While I say no first when anyone asks me if they should buy an extended warranty, that's only the short answer. Look at the terms of the service contract offered and weigh the price of the item you're buying and the amount of hassle you think you can risk putting up with. I have no doubt you'll make the right choice.