Many stores like Best Buy offer extended warranties to help consumers alleviate fears that their new electronics are going to break. These warranties are a huge source of profit for the retailers and often times a big waste of money for consumers. According to Consumer Reports:

When you take out an extended warranty, you're essentially making a sucker's bet. You're gambling on a series of events happening at precisely the right time under precisely the right circumstances. These include:

• That a product will break exactly after the manufacturer's warranty has expired and precisely when the extended warranty is in effect. Sure, it's possible, but unlikely.
• That the cost of the repair will exceed the cost of the warranty. Surveys of Consumer Reports subscribers reveal that the costs are fairly close most of the time.
• That the product is likely to break in the first place. According to our data, most products are quite reliable and have not broken during the first three or four years of ownership.
• That you're going to want to have the product fixed. Perhaps surprisingly, many readers surveyed said they didn't bother seeking repairs because they desired a replacement product that had either new features, more power, greater flexibility, more advanced technology, or improved energy efficiency.

There are many ways to get a free extended warranty:

• Most products come with their own warranties, so it doesn’t make sense to purchase more protection. With the exception of big ticket items like laptops, plasma TV’s or video game protections, which may break beyond the common warranty time period. However, it still rarely makes sense to pay another 20% of the purchase price for a warranty!
• Credit cards can give you the extra warranty protection for free for those products that may need the support. Some major credit cards automatically tack on an additional year to the product’s existing warranty period, which effective doubles the extended warranty at no additional cost. These companies including Amex, Visa Signature and MasterCard Platinum.

Overall, consumers may be best off avoiding extended warranties provided by retailers and instead opt for those free ones offered by credit card companies!