A man claiming to be a former employee of Noel Leeming is speaking out over what he claims are unethical sales practices at the retail chain.

He alleges salespeople are being sneaky about selling extended warranties on goods purchased by its customers.

Customers who want to cancel an extended warranty sold as part of a discounted "package deal" could potentially run into issues with salespeople if they try to get it refunded, he says. 

And if customers exercise an extended warranty and it’s shown as a product discount on their receipt, he says the supplier may deem it too far below the value of a new one and provide a refund of the receipt value instead.

An extended warranty is an option available to customers at an extra cost. It typically covers repairs past the expiry date specified by the manufacturer, e.g. for up to three to five years.

Taking his concerns to Reddit in a post in early June, the man, who claims to "have been" or "currently are" a Noel Leeming employee, says a major tactic used by its salespeople is offering customers a "package deal" that includes a discounted warranty.

"I know how much you guys love your extended warranties so I just wanted to share with you guys some of the unethical behaviors they are currently encouraging for salespeople and the ways they are trying to sneak warranties into your purchase," the post reads.

They will pull some b******* about package deals and say they can’t refund that.

As an example, a salesperson might say, "normally the warranty for this laptop is $250 but we can work out a package deal and just make it $50". 

Providing the example below, he says the customer’s receipt may instead show a $200 discount applied to the product, not the warranty.  As they are two separate products, "this is not actually a package deal," he says.

• Laptop: $1500
• discount -$200
• 3 year product protection: $250
• Total: $1550

"Yes, you’re paying another $50 in total, however on paper, you are still paying full price for this warranty," the post reads. 

Consumer NZ confirms customers who take an extended warranty are entitled to a "cooling-off" period of five working days.  

If customers ask for the warranty to be canceled and refunded, as it will "literally f**k up the sales person’s stats" he says they may be reluctant to refund it.

"They will pull some b******* about package deals and say they can’t refund that. Get the warranty refunded and make sure you keep that discount on the product you were sold," the post says.

He says if the package discount is off the product (as shown in the example above), in some cases (e.g. if an item needs replacing), the supplier may deem it too far below the value of a new one and provide a refund of the receipt value instead.

"...this is where it can go wrong for you: if you have an extended warranty on a product, but that product is deemed too far [below the] value of a new one by [the] supplier because it was either on sale or discounted, [t]hey will give you a refund for the value of the product, e.g. $1300 in this case," he said.

He claims while some salespeople will be "really upfront" and explain the deal, "most will dance around what is happening". 

He urges customers of the retail chain, "especially the major top sellers, like all Auckland stores", to check their receipts to ensure discount is applied to the correct product ("usually shown as a minus under the full price").  

"So I know most of you here might be savvy enough and not fall for this. But please do check your receipts, or your friends and families receipts, especially your elderly," he warns.

The post provides two other examples - the sale of a 5-year extended warranty on a package called ‘My Tech Solution’ and a "free" 'NVS cleaning cloth', for which salespeople receive commission and may show on the receipt as a discount on the TV. 

"If you find yourself going to return one of these deals, for the love of god, avoid all sales people and talk directly [to] the actual customer service staff," the post adds.

In a response to Newshub, Jonathan Waecker, chief customer officer at Noel Leeming confirmed as is usual for large retailers, salespeople are eligible for commission on every product sold.  

He said products can be discounted for different reasons. It’s common for customers to ask for customised pricing - particularly if they’re buying multiple products, or if they ask Noel Leeming to match a competitor’s price. 

We’re yet to find an extended warranty that we think offers good value for money

Regardless of the current price, customers entitled to a refund on a product are refunded the amount shown on the receipt. 

"Any product eligible for a refund would be refunded based on what the customer has paid for the product (as per the receipt) regardless of what the price may be at time of return," Waecker added.

He said Noel Leeming plan offerings are designed to give "clarity and comfort" to customers when the Consumer Guarantees Act doesn’t apply.

"These optional plans include benefits that go above and beyond what the Consumer Guarantees Act includes, such as assured replacement on any products under $500, unlimited free Technical Helpdesk Support for 30 days, 30 days price protection and no cost of assessment if a product fault is found not to be covered, for example water damage found in a phone," Waecker said.

Jessica Wilson, head of research at Consumer NZ, said paying extra for an extended warranty is "rarely worth it". 

"We’re yet to find an extended warranty that we think offers good value for money," Wilson said.

In most cases, she says, customers are paying for protection they already have under the Consumer Guarantees Act.

"The Act requires products to be of acceptable quality. That includes being fit for purpose, durable and safe. If a product doesn’t measure up, you’re entitled to go back to the retailer and ask [them] to put things right," Wilson added.

If the fault is minor, the retailer is obliged to either repair or replace the item, or provide a refund.  If the fault is major, the customer can choose whether to receive a replacement or a refund.

She confirms customers who are sold a "package deal" that combines a product with an extended warranty are legally entitled to cancel the warranty within the 5-day cooling off period.

"You’re legally entitled to cancel the warranty agreement within the cooling-off period and request a refund. The refund should be the price you paid for the warranty that’s shown on your receipt," Wilson added.

Customers who think they’ve been misled by a retailer are able to make a complaint to the Commerce Commission.