Ask LH: Can Credit Card Price Protection Insurance Score Me An iPad Upgrade?

Dear Lifehacker, I purchased a third-generation iPad earlier this year, and like everyone I was slightly surprised when it got superseded just seven months later. I've read all the stuff about how it's my fault for assuming a one-year product cycle. But here's my issue. I bought the iPad 3 at launch, knowing that I had credit card price protection insurance (via my Coles Mastercard) which said that if the product's price dropped in the next two years I could claim that money back.

The problem is that the third-generation iPad is discontinued, not cheaper. What are my rights now? I would not have bought the iPad if I had known it had such a short lifespan. Can I claim when the newest iPad drops in price instead? Thanks, Credit Due

Picture by Kevork Djansezian/Getty Images

Dear CD,

There are two lessons to be drawn from this experience. The first is the one that I already harped on about in my original post about buyer's remorse for iPad owners: if you're making a big technology purchase such as a tablet, you need to be convinced that it's a good value buy in its own right. Assuming that it will definitely be the current model for any set period of time will often get you into trouble. Your rights as a consumer don't preclude companies from offering new products for a set period; the fact that there's a newer model doesn't mean yours doesn't do what it was designed for. (Support needs to be offered for a reasonable period, but that's a different issue.)

The more specific lesson is that you have to understand the conditions on credit card shopper's insurance very thoroughly before relying on it. The exact details will vary depending on the provider, but typically credit card insurance offers to refund the difference in price if the identical item goes on sale through the same store over a specified period. This period varies between providers: six months is common, but some cards (such as the Coles one you have) do run to two years.

It isn't technically a free service; you pay a percentage of your monthly balance (for Coles, this is 1 per cent, capped at a maximum of $50 per month). If you're organised with your credit card and pay it off in full before the due date, you will get it for free, but you need to stay well-organised for this to happen.

Unfortunately, in this case there are several reasons which mean this would never have been a good strategy for future-proofing an iPad purchase. I'm drawing on the specific Coles card conditions for this analysis, but most price protection schemes have similar conditions.

Most importantly, there's a price limit of $600 for price protection items. That means the only third-generation iPad model that would even have qualified was the basic 16GB Wi-Fi version, which cost $539 at launch. Anything pricier wouldn't qualify, no matter what happened to its price subsequently.

Secondly, you can only claim if the identical item goes on sale for less in the same store, and not if that sale is for very limited quantities. Presuming you purchased through an Apple store, this would have been a very risky strategy, since Apple often dumps older models outright or sells them off through third parties.

As for your final question: no, you can't try and claim the difference if the price on the newest iPad falls. The terms are very clear on that point: "The item with the reduced price must be exactly the same as the item you bought, including size, colour, make and model number, attachments and accessories."

Price protection can be a useful bonus feature on your credit card, especially if you're not paying for it. However, your example shows that relying on it as a means of future-proofing, especially for technology, is a risky strategy.

Cheers Lifehacker

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Comments

    As with all these type of schemes where you supposedly get something for nothing you find out in the end that TANSTAAFL :(

    I just ordered a refurb iPad 3 from Apple for $419. I can't see what tangible benefits an iPad 4 offers over the older model - does one really need a slightly faster processor for web browsing / e-mail / e-books / angry birds? The new connector is a liability if anything since one has to buy a whole new bunch of connectors and accessories.

    I agree with your story about buyer's remorse. Buy your consumer items to meet your existing current needs (not the hypothetical ones) and be satisfied with the decision. There is always something newer around the corner. Even better if you can depreciate it as a tax expense.

    Couldn't do it because the price on a new iPad 3 hasn't actually changed.. they've simply discontinued it completely.. and the ones they're selling are "refurbs" not new ones. So price protection doesn't work for this.

    Boo freaking Hoo,

    Your purchased item still fulfills all of the promised performance on the day you bought it... suck it up princess

    Yeah, this used to bother me too, but not any more. I'm in the same boat in that I have an iPad 3 and was surprised at the quick refresh. But really, the way I see it these days is that pretty much at any point that you decide to buy, you're going to have almost exactly the same experience: you buy model X, then a short time later, model Y supersedes it. Even if you held out and bought the shiny new Y, there's a Z just around the corner. The best way (as pointed out above) to think about it is that your model still does exactly what it did yesterday. Use it and enjoy it.

    +1
    Nice to see we have some voices of reason here.
    Every other website mentioning the 4th-gen iPad is overrun with whingers whining about how they don't have the most shiny piece of fruit anymore.

    I don't quite get the "you will get it for free" part! I have a Coles card, and read some of its insurance conditions, the premium is 1% of the monthly closing balance. So does it mean that theoretically if you pay your monthly spend just the day before statement date, you get a $0 bill hence "free insurance"?

    Even if true, again theoretically, you loose the 30-31 days interest free benefit, and the potential saving interest becomes the cost of insurance, plus the hassle of precision timing, nothing is free after all.

    i can't believe i don't have the most shiny piece of fruit anymore.

    Hah hah hah, is this for real???

    In real life you can't expect anyone to give you the new product every time something new comes out, that is not how life works. You chose to buy at that time, you live with it. You don't see me kicking up a hissy fit every time a new computer CPU, Car, or TV comes out.

    Damn Apple princesses.

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