The whole store really only made money on the service plans (extended warranties), and it was a large portion of our bonus/incentive income over our base hourly pay. There was very little margin on most of the electronic goods they sold. So we were pressured constantly by management to keep pushing those throughout the day. In every meeting before and after the store opened/closed, it was often the only thing ever discussed.

I got pretty lucky to work in appliances vs computers or audio or video, because a lot of people didn't want their fridge or freezer or washer or dryer to crap out on them, and be out $1000+, after 1 year.

For a lot of people, the $30 to $50 price for a few extra years of guaranty, was worth it for the peace of mind it provided. And appliances were easy because unlike a tv, dvd player, or computer, they were not an easy item to return or ship to a manufacturer for repair, and we could always sell that you might get parts covered while under warranty, but might still have to pay for a service charge.

This is why Costco started selling lots of appliances. And it was only in the past few years that Costco finally modified their return policy on major appliances to be only 90 days from the unlimited period it used to be.

I also think the extra year costco adds to laptops and TVs is why they continue to sell a lot more of those than best buy, walmart, or amazon do.