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With Electronic Gifts at High Risk of Damage by Kids and Pets, Consumers Turn to Service Contracts

TALLAHASSEE, Fla. – Consumers are expected to spend $66.5 billion on electronics this holiday season and a record number will protect them with service contracts, given the high risk that portable electronics will be broken or damaged.

“After spending a lot of money to purchase electronic devices, the last thing consumers want is to reach back into their wallets to repair or replace them,” said Tim Meenan, executive director of the Service Contract Industry Council. “Service contracts take the worry out of an expensive electronic purchase, because, if they become inoperable due to a defect, they’re either repaired or replaced. Most service contracts also provide coverage for accidental damage from handling so before purchasing read to make sure you understand the coverage you are buying.”

Damage is common, given how expensive portable electronics have become and how often they are entrusted to children. According to studies by SCIC member organization SquareTrade:

  • Half of American parents say their kids have damaged a mobile phone, and 61 percent of the damaged devices were not covered by a warranty – costing parents more than $2.8 billion in repair and replacement costs.
  • 17 percent of iPhone users have damaged their phones more than once, costing them $5.9 billion a year in repairs.
  • Consumers spend $3 billion a year repairing electronics destroyed by their pets.
  • 23 million Americans have reported damaging their phone while watching a sporting event by dropping it, throwing it or spilling something on it.

A survey by the Consumer Electronic Association found that one in five consumers plans to purchase an emerging technology device this year, including such things as fitness watches, wearable body monitors and smart scales.

To help consumers navigate the purchase of an extended warranty or service contract, SCIC has produced a pocket buying guide that can be downloaded at The guide includes key questions consumers should ask when deciding whether to purchase an extended warranty this holiday season.

Among the features SCIC says consumers should look for or expect in a service contract are these:

  • A 30-day “free look” period
  • 24-hour toll-free technical support
  • Access to pre-qualified repair and service professionals
  • In-home repair service
  • Free or discounted product repair and replacement
  • Power outage and surge damage protection
  • Routine maintenance, such as cleanings and tune-ups
  • Free shipping
  • Accidental damage from handling coverage


The Service Contract Industry Council is a national trade association whose member companies collectively offer about 80 percent of the service contracts sold in the U.S. for home, auto and consumer goods. The SCIC educates consumers about service contracts, encourages its members to pursue high standards of customer satisfaction, and develops and promotes model legislation to regulate the industry with standards designed to protect the consumer and the industry.

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