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How do companies make money on warranty

Warfanty you’ve been in a store recently, that might not surprise you. This dependence on warranty profits suggests that Best Buy’s business model might not be sustainable over the long term. Would you like a warranty for that? Ever wonder why the friendly blue-shirts at Best Buy push extended warranties so hard? It’s become a huge profit stream for the company — potentially even more lucrative than the actual business of selling electronics and appliances. If you assume that hwo. In other words, more than half of operating profits came from warranties. So what’s the problem? Warranties are just smart business.