This is the time of year when we start thinking about purchasing gifts for the holidays. Although most major purchases are not made at this time of year, one needs to be alert to the warranties and service contracts that are available when any merchandise is purchased.

A warranty (or guarantee) describes the manufacturer's or seller's commitment to stand behind their products. It tells what will be done if a problem develops in a certain amount of time. It is as important to compare warranties as it is to compare style, price and other characteristics of products before you buy.

Businesses offer warranties as a promotional device to help consumers differentiate between competing products and help foster brand loyalty. From the management standpoint, warranties act as a corporate commitment to consumer satisfaction. It also limits the manufacturer's or seller's liability.

Most major consumer purchases come with written warranties although they are not legally required. If a product cost more than $15, a written warranty must be available for the consumer to read.

Since the protection offered by warranties varies greatly, comparing warranties is important. Some questions to help when comparing warranties:

• What parts and problems are covered?
• Are any expenses excluded from coverage?
• How long does the warranty last?
• What will you have to do to get repairs?
• What will the company do if the product fails?
• Does the warranty cover consequential damages? (Damages the product caused, or your time and expense in getting the damage repaired.)

Are there any conditions or limitations on the warranty? Some warranties may cover only personal, as opposed to business, use. Others may cover only the first-time owner. Make sure the product and warranty will meet your needs.

To prevent problems with your warranty, consider these precautions:

• The reputation of the company offering the warranty.
• Read the warranty before you buy a product.
• Save the sales slip and attach it to the warranty.
• Read the instruction manual before using the product.
• Soon after a purchase, try out the product's features, controls and parts. This way you can discover any defects or problems early.
• Perform any maintenance or inspection required by the warranty.
• Use the product according to the manufacturer's instructions.

As a consumer, it is important to be realistic about the expectations of a product. Do not expect features or performance the product was not designed to give or warranty coverage that was not promised. If a problem does develop, follow the instructions in the warranty for repair or replacement.

You should have some type of filing system for warranties. Start a file folder or use a box, but keep all warranties, sales receipts and instruction books for products together, and where you can find them. Keep receipts for gifts that you have purchased in case a problem arises. Even if you are not purchasing items for yourself at this time, check to see that your warranties, etc. are filed where you can find them when needed.