How to craft a warranty policy that suits your business.

Posted Monday, April 28, 2014

Let’s look at why having a clear warranty policy is important.

Click here for a review of a good local business. Prior to reading this, to put it in proper context, I would suggest you check out this article on how Apple has admitted manufacturing faulty power buttons on the IPhone 5, in addition to the slew of complaints about faulty iPhone 4/4S power buttons. This is a very well known issue, that the flex cable power button fails without reason, far before the phone has reached the end of its life.

A clear warranty policy is key to avoiding trouble.

Explain your terms.

Many repair shops offer a warranty. Whether it’s 30 days, 3 months, one year or lifetime -many fail to explain the most important part, which is what their warranty covers! It’s important to explain precisely what is covered by your warranty if anyone asks, or you may find yourself in a sticky situation later.

People’s expectations of warranty policy are not always in line with what you offer.

You offer a warranty on the parts you replace. So, if you replace a screen, you offer a warranty on the screen against defects. Customers do not always see things this way, so it’s imperative that you explain this, even if it is a casual mention.

Customers expect that warranty covers future physical damage.

You might not anticipate that customers expect warranty to cover physical damage. If you explain that your warranty does not cover physical damage upfront, you are less likely to have that customer come back expecting a free repair. If the customer hasn’t had this explained to them they may come back and discuss the situation as if there is partial blame on you, as if the crack occurred magically. Explaining this upfront is by far the best way to go because it plants the seed, ever so subtly, that you “don’t play that shit.”  :-)

Some customers see your repair warranty like a manufacturer’s warranty that covers “everything.”

You can’t blame people for expecting a warranty to be comprehensive. The average person has utilized a product warranty far more often than a repair warranty. It is important to understand the difference between a product warranty and a repair warranty.

Product warranty:

When you purchase a new phone, you expect that the warranty that comes with this phone covers anything that goes wrong with it – so long as it’s not a result of your abuse. This makes great sense, for several reasons.

  1. The manufacturer provided you with the entire phone.

  2. You paid them for the entire phone.

  3. It is up to them to warranty, to whatever is required by law, what they have sold you.

Repair warranty:

When you have a phone repaired, you get a different kind of warranty. The warranty typically only covers the part you replaced, rightfully so, for several reasons!

  1. The repair shop has only touched a specific part of the phone.

  2. You only paid the repair shop for this particular part of the phone they have replaced.

  3. It is up to them to warranty what they have repaired, not the entire phone; for they have not sold you the entire phone!

One must be especially careful with warrantying Apple product repair.

Apple products are made like crap!

How may I count the ways?

  1. 820-2101, 820-2249 motherboards for A1226/A1260 Macbook Pros with no video issues.

  2. Frames on A1226/A1260 Macbook Pros that crack over time.

  3. A1286 2008-2009 Unibody Macbook Pros with glued together, split back display assemblies that fall apart.

  4. 820-2850 motherboards with PCB faults and overheating NVIDIA GPU failures

  5. 820-2915 motherboards with overheating AMD GPU failures.

  6. iPhone 4 power & volume buttons
  7. iPhone 4S power & volume buttons.
  8. iPhone 5 power & volume buttons.

Some are cited, but people who work on these regularly are well aware of the ones that are uncited. There are many more, but I’ve got work to get back to. :-)

These products are made to fail.

That’s great. Apple products are made to die – great for us. It’s why we can make a living repairing Apple products whereas we’d be on the street begging for change if we were repairing Lenovo products. The problem is that they will often fail while in your possession! When this occurs, you will often be blamed. You could be doing something as innocent as installing OpenOffice and OS updates on an A1286 2010 model, and when the motherboard fails 2 days later, they will blame you!

You need to protect yourself for when they fail.

You don’t want to be held liable for when products in your possession die, nor do you want to be stuck providing warranty service on an entire device when you are only servicing one part.

Make sure your warranty protects your business.

We would have to charge astronomical rates to stay in business if we were expected to warranty any issue on a product where we’ve only billed the customer for repair of one issue. Here are some ways

Service covers part repaired only.

This is key. Make it clear to the customer that service covers the part repaired only. Even if you are the type of business that provides courtesy service – you do not ant to be forced into providing courtesy service because of an unclear warranty being manipulated.

Service does not cover physical damage of any kind.

If you say that your warranty covers everything “unless you drop it again”, you’re setting yourself up for trouble, because people can always say it happened on its own. Make it clear that the warranty does not cover any type of physical damage to the screen.

Make sure your warranty matches your target demographic.

We’re in the hospitality and repair industry. The hospitality industry is focused on the happiness of the customer. The repair industry is focused on fixing a specific problem at a specific price and covering their ass for any additional liability.

These two are at ends all the time when providing customer service in a repair shop. However, both are equally relevant.

When debating what to do for your customer, think about what type of customer you target, and the type of service you provide.

How you provide warranty service does not reflect on your personal ethics & morality.

Customers will bring up how you should “stand behind your work” even when the problem they are requesting you to repair is not part of the original problem. Some people will feel compelled to do this free work to feel like they are doing the “right” thing. At the same time, some will feel compelled to not do the work because they feel they need to do the “right” thing by their business.

It’s not about right or wrong. It’s about your business’ strategy.

It’s important to realize that this is not about what is right or wrong morally or ethically. It’s about what is right in the context of how your business operates – what type of services your business offers, and who your target demographic is.

If you’re a boutique service, it’s ok to do courtesy service every now and then as part of your customer service, branding, and loyalty building strategy. 

If you charge $125 to fix an iPhone 4 screen in 2014, or $350 to replace a white Macbook screen you might just be expected to do a little courtesy work every now and then. You charge a rate that allows for a more than healthy profit – in return, you go the extra mile to make people happy. If you make an additional $130-$170 for each job, this “covers” your premium service when you have to give 1 out of 20 people $75 in labor or $100 in parts for free.

You can’t make $320 off of a simple 10 minute job in our business if you don’t go the extra mile, and work with people.

If you’re a cheap service provider, don’t provide the courtesy service as part of your cost saving strategy.

If you make $20 off of every laptop screen you replace, you can’t provide a reinstall or a new drive if their drive dies a day later.

Your business’ strategy is based on offering very low prices. You can’t offer low prices and eat every expense from the misfortune of customers, because it would eat away at the low overhead that allows your business strategy to be successful.

You can be middle of the line and play it by ear.

We charge mid-level prices, and are always willing to hear a situation out. Sometimes we’ll perform courtesy service, and sometimes we won’t.

In each of the above situations, the customer service policy is based on the business’ chosen strategy.

A policy that is in favor of the customer or a policy that is in favor of the repair shop is not what is important. What is important is that your warranty policies are in line with your strategy and your mission & purpose. It is also important that both you, your technicians, and your customers understand your warranty policy, or things will go awry.