Furniture protection plans not worth the cost

These plans are advertised as offering peace of mind that your furniture will be restored to pristine condition if it’s accidentally damaged – say your red wine spills or your cat gets scratchy.

The plans provide cover for three to seven years and typically come with products you can use to clean up spills or apply to the furniture to help protect it against damage.

If an accident happens and you can’t remove the stain with the products provided, the protection plan is supposed to kick in. The company will get the couch professionally cleaned or even replace the furniture if it can’t be restored. That’s the theory, but these plans come with numerous exclusions and we think they provide little value.

What we found

We sent our mystery shopper to five retailers — Big Save Furniture, Early Settler, Freedom Furniture, Harvey Norman and Target Furniture — to find out what their furniture protection plans offer.

At Big Save, our shopper was told the store’s Upcare furniture plan was “like you’re protecting something by warranty … if anything was to happen accidentally, you’re OK, it’s fine, it’s covered”.

The salesperson said the plan covered “all rips, stains, tears, accidental damage to your fabric, so that’s like pets like coming at the fabric … any stains or anything that might occur”.

However, that’s not what the plan’s fine print says. It excludes pet damage caused by “jaws and claws” as well as “unidentifiable” and “accumulated” stains. You’re also not covered if you haven’t taken “every reasonable precaution” to prevent damage or fail to use the cleaning products provided as instructed.

What’s more, you’re expected to get your couch professionally cleaned every year.

At Harvey Norman, our shopper was told its Premium Care plan “gives you seven years’ warranty on top of the fabric”.

The salesperson said the plan covered one incident of pet damage plus “any stains, other cuts and burns, those are also covered”. A company “comes to your house … if the stain is not going away and they come and fix that for you”, they said.

However, it’s only “surface damage” caused by your pet that’s covered and it’s limited to damage on one panel of the furniture. Like Big Save’s plan, the Premium Care plan excludes “unidentifiable” and “accumulated” stains.

You’re also not covered if you haven’t properly applied the fabric protection spray that comes with the plan.

At Target, our shopper was told its Soil Guard Fabric Care plan is a “five year guarantee” and the cleaning products are like “a stain remover and all that. It’s apparently magical”.

But the magic isn’t spellbinding. Soil Guard comes from the same company – TF Group – that’s behind the Premium Care plan sold by Harvey Norman, and has the same exclusions for “unidentifiable” and “accumulated” stains. To make a claim, you have to notify the company of any damage within three days.

We also found broad exclusions in Early Settler’s Guardsman Fabric Care Collection plan and Freedom Furniture’s Care Cover plan.

With all plans, failure to correctly use the cleaning products provided can invalidate any claim. Damage the companies deem to be simply the result of “normal wear and tear” is typically excluded, along with damage they believe you didn’t take reasonable steps to prevent.

What they cost

Buying a furniture protection plan can add anywhere from $150 to $300 to the cost of your couch. That can make them a nice earner for companies.

For example, say 20,000 Premium Care furniture plans were sold each year. At $200 a pop for a three-seater couch, that’s $4 million in revenue.

We asked companies how much they paid out in claims compared with what they earned from furniture plan sales. However, they declined to tell us.

Retailers say the plans provide good cover. However, given the numerous exclusions, and the wide discretion companies have to decide how they deal with claims, we think these plans are unlikely to provide value for money.

You may also be paying for cover for your furniture that you already have under your contents insurance. Both Big Save’s Upcare and Early Settler’s Guardsman plans exclude claims for damage covered by your insurance.

Extended warranty in disguise?

Furniture protection plans were promoted to our mystery shopper as a type of extra warranty. Just like extended warranties for appliances, these plans are an agreement you’re offered at the time you buy. You’re charged a fee over and above the cost of the furniture for the extra protection.

Under the Fair Trading Act, extended warranties are required to provide information to consumers about their rights under the Consumer Guarantees Act (CGA) and identify the extra protection offered. They should also include details about how to cancel; none of the furniture care plans contained this information.

Jake Smit, director of the TF Group that provides the Premium Care plan to Harvey Norman and Soil Guard plan to Target, said he’s got legal advice and “to be on the safe side” is updating the plans. The revised plans will include information about consumers’ legal rights under the CGA.

Harvey Norman said it didn’t consider the Premium Care plan to be an extended warranty but would liaise with the TF Group about any changes it was making.

Early Settler and Freedom Furniture said they’re reviewing the plans they sell.

We say

• With their numerous exclusions, it’s hard to see much value in furniture protection plans and we don’t recommend them.

• We’re concerned some retailers are promoting these plans to consumers with misleading claims about the cover they offer. We’ll be making a complaint to the Commerce Commission.

• If you need help tackling a stain, check out our free stain-removal guide on consumer.org.nz.