Argos has agreed to pay half a million pounds back to customers after it broke rules on extended warranties – resulting in thousands of customers overpaying over the course of 12 months.
The retail giant said it will change the way it sells warranties to customers going forward – adding it will provide a goodwill gesture to those who may have missed out on a better deal.
Extended warranties offer people the chance to pay for increased protection when buying products, over and above any standard guarantee.
In 2012, Argos signed a legally binding agreement promising to provide a link to a price comparison website every time it tried to upsell an extended warranty online.
This meant that customers would be able to compare prices and get the best deal.
However, an investigation by the Competition and Markets Authority (CMA) found Argos was not displaying this link and the company subsequently admitted it had not been doing so for more than a year.
In total, Argos’ breach affected sales of over 400,000 extended warranties. The CMA found 114,000 of those customers may have saved money had they been prompted to shop around.
Argos will now contact all customers who may have missed out on a lower price and make them aware of the error.
The goodwill payments amount to £570,010 and will be paid in e-gift cards, Argos said.
Argos has also reinstated the link to the website and agreed to carry out regular internal checks to avoid breaching the undertakings again.
Adam Land, at the CMA, said: “We welcome Argos’ promise to provide a goodwill gesture of over half a million pounds to customers who may have missed out on a cheaper extended warranty deal, after it failed to remind shoppers of their options.
“It’s only right that Argos is now taking steps to fix its error and make sure that something similar doesn’t happen in the future. Any breaches of this kind must be put right immediately, or we will take action.”
