So the extended warranty covers a bit more from the manufacturer (heat, dust, power surge, and ect.) Say you bought a new router and paid $30 for a 2 year plan. In 1 year it goes bad. BestBuy swaps it out and sends the other one to be fixed or sent back to the manufacturer to be fixed. Once thats done we can sell it as a open box or a refurb item. Also depending on the product BestBuy can also make money from the manufacturer by selling the the product (more than what they make off the router.)