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In the last article I gave you some suggestions about what to look for in a warranty when purchasing a tool. In Part Two I am going to go over Replacement and Protection Agreements.

Merchandise Replacement Agreements or MRA’s (see footnote) go by many different names but they all work by the retailer offering a free replacement after the normal manufacturer’s full warranty has run out. The MRA is for a certain period of time at an additional cost to you. With a replacement agreement the retailer typically offers you an “insurance policy” that will allow you to replace your product for a new one once after the manufacturer’s full warranty or the store’s policy on returns runs out. Typically the replacement agreement will extend the normal warranty one year and allow you to exchange your item once for a new one during the extended period.

Replacement Agreements differ from an extended warranty in that there is no service involved. If you say it’s broke, the retailer just replaces the item, and usually with no questions asked.

Make sure you get the Merchandise Protection Agreement form when you purchase your tool. Each state has specific laws governing this type of warranty and you may have specific rights (like cancellation time frames) that apply to you. Read the complete form so you know what is involved when you have to replace your tool. (read the front and back of the receipt too!!)

IT IS VERY IMPORTANT THAT YOU KEEP YOUR ORIGINAL SALES RECIEPT AND REPLACEMENT AGREEMENT PAPERWORK. IN MOST CASES YOU WILL NOT BE ABLE TO GET YOUR REPLACEMENT WITHOUT IT! I suggest making a file folder or other secure location and keep ALL you tool related documentation in it.

MRAs typically do not cover:
- Products used for business or commercial purposes.
- Damage from “natural” causes like fire, wind, hail, FLOOD, lightning.
- Damage from theft or abuse. (I consider abuse something like dropping the tool off the roof or leaving it out in the rain for a week)
- Cosmetic Defects (scratches etc.)
- Expendable Items included in the original kit such as driver bits, blades, light bulbs, etc.

MRA’s also do not allow for price differences. For example, you purchased a Milwaukee SawzALL for $169.00 last June. It failed and you go to get another one under a merchandise replacement agreement. The new replacement is priced at $110 on the retailers shelf. No, you do not get the difference. The item replacement is covered, not the cost of the item. Consequentially you will not have to pay an additional fee if the new replacement’s cost is higher.

So when should you buy a Replacement Agreement? In my opinion the replacement agreements are worth it in the following cases:

First, you are planning on remodeling a home over the next 18 months and you buy a new cordless drill for the job. You use the drill, abuse the drill, and get your money’s worth during that time period. When the project is completed you then go back to the retailer and “replace” the drill for a brand new one … one that will last you many years to come.

Second, you buy a cordless drill with nicad’s and you don’t use it much. Ni Cads actually last much longer if you regularly fully discharge and charge them. If you don’t use them that often, the batteries will eventually fail to hold a charge. Mark your calender about 9 months into the merchandise replacement agreement after you purchase the drill and go get new batteries at that time. That will insure that you will have a good working set of batteries for at least three-four years.

Other reasons to buy a Replacement Agreement:
- Critical Tool: Table Saw, Drill Press
- You are going to use the tool for a specific project:
- Lower Priced Tool: Direct drive miter saw verses a belt drive.
- Cheap Tool: Half the price of everything else on the shelf. Cordless Drill, $39 Circular Saw, not a name brand, etc.
- Sale item: Many Replacement Agreements are priced on a percentage of the asking price. For example Sears charges 15% of the current price of the tool for the protection agreement. For example, a $400 cordless drill set would have a $60 MRA but if the set is on sale for $300 the RA is only $45. So your savings in this case is not just $100 but $115
- You use it commercially: Most retailers void the warranty or only give you 90 days if you buy an item using a business check, business credit card, or use a business name for the purchase. BUT, Sears will give you the normal warranty if you purchase a protection agreement at the time of purchase. This includes even the non-Craftsman brands that they sell in the stores or on-line.
- You are buying with a Master card. Mastercard extends the warranties for one year AFTER all the other warranties have run out. So if you purchase an item with a one year warranty, purchase a one year Merchandise Replacement Agreement, you will have three years of coverage for that product. Be sure you read Mastercard’s extended warranty before you need it!
- You are buying with a credit card. Face it, things just aren’t made the way they were 30 years ago. If you buying with a credit card and are paying on time it would be nice for the product to last longer than it takes for you to pay it off. Adding an MRA gives you that extra time.

As a bonus for purchasing the replacement agreement, usually the whole item you purchase is covered. For example, if you buy a cordless drill that comes with two batteries, a charger, a carrying case and a set of driver bits, ALL of those items are covered under that agreement. Typically the normal warranty DOES NOT cover the case and expendable items like the driver bits. When you exercise your MRA bring ALL of the original pieces with you such as the case, the drill, the charger, both batteries, and the bits.

Be sure you read every word in the replacement agreement that you purchase so you know exactly what is covered when you have to use the agreement. Be sure you read the fine print on the protection agreement because most of them only allow you to use the agreement ONCE.

Another bonus for buying a replacement agreement is you usually don’t have to go through the manufactures warranty hoops to get an item replaced. For example, if you purchase a Dewalt or Milwaukee tool you have to go through their authorized service centers to get the item repaired or replaced. With a protection agreement you just go back to the retailer and they replace the failed item.

Be careful with third-party replacement agreements or replacement agreements not owned by the retailer you purchased the tool from. You may have to get authorization from the company that owns the RA before you can get the item replaced.

Next Time, Extended Service Agreements.

To Buy New and Used Craftsman Tools CLICK HERE

Footnote: It looks like “Merchandise Replacement Agreement” may be a copyrighted term so I’ll reference Sears and Sears Protection Company as the possible copyright holder. I used the form “Wisconsin MRA SF E Oct2006 Form 9g/WI from Sears Protection Company for some of the information in this post.