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EYE ON THE INDUSTRY 11-01-00
WARRANTY COMPLAINTS
Turn Warranty Refusals Into Supplier’s Problems
By Dale Stotts, Guest Columnist

Editor Note: This article was originally directed toward the power equipment industry, however, the problems are familiar and the lessons helpful no matter what portion of the power industry you’re in.

The customer walked into the door of my dealership, and I asked how I might help him? He replied: “The manager from Bob’s Big Box directed me to your store because my mower is under warranty and you do the warranty work on Brand X.”

I’ve quit counting the times some version of this statement is uttered from a customer’s lips. I have also lost count of the numerous times OEMs have given “lessons” on the proper way to handle such confrontations.

I said, “Sir, could you explain your problem?”

“I’ve owned this mower for 11 months and it has never worked properly. Recently it started shaking, and this morning I noticed a large puddle of oil under the mower. I returned the unit to Bob’s asking for a new unit or my money back, but the manager said you were the warranty center and would gladly repair my mower because it’s still covered by the warranty.”

After a technician inspects the mower in the customer’s presence, the problem is a bent blade, bent crankshaft and damaged oil seal - none of which are under warranty, but the customer only remembers, “Bob’s manager said YOU, the service center, would take care of the problem.” Subconsciously, the customer relates this to “free repair.” It’s an all too- familiar story.

Now I have the enjoyment of explaining - “according to the manufacturer’s written warranty policy…” - that the unit repairs are going to cost the customer. This is a great way to make a new friend, who expects to have the unit repaired and returned for no out-of-pocket expense because “the mower is under warranty.” This pits the customer against the dealer - and leaves the manufacturer a safe distance from the turmoil and the headaches.

We all know what happens next: The customer complains and demands warranty (work) because “the mower never has worked properly.” Yes, the OEM has given the dealer certain methods to handle this irate customer. The dealer can send a disputed warranty claim to the manufacturer to review for the customer, but remember, the customer must either pay for the repairs first and let the manufacturer refund his money, or the customer can wait until the OEM has evaluated the problem and then have his unit repaired for free IF the OEM has ruled in favor of the customer. How often does that work? Possibly your customers are more patient than mine, but my customers do not like either of these two alternatives.

Occasionally, the next words out of the customer’s mouth are, “You’ll be hearing from my attorney.” Isn’t this always the answer in today’s society? Sadly, if the customer follows through with his threat, many manufacturers believe it is cheaper to settle under the guise of “customer goodwill” than spend the money to fight the battle in court.

In this case, the dealer, in the customer’s eyes, looks crooked because the manufacturer pays the bill. This means the customer was right and the service center was trying to make a quick buck. The dealer has followed the manufacturer’s published warranty guidelines, only to have his credibility or honesty undermined by the infamous policy adjustment. I don’t know about you, but I am fed up with policy adjustments in the name of customer goodwill. Such adjustment are only OEM cop-outs to avoid taking a stand against a consumer’s misconception of what warranty is about, especially when the failure is directly consumer originated. This very tale is repeated yearly in possibly every service center in the U.S. and there seems to be on end in sight.

This is where I have changed my policy in handling this and similar situations. One must remember these facts: First, the dealer did not manufacture the product. Second, the dealer did not write or enforce the warranty policy. Third, the dealer is the one on the front counter spending valuable time, which is not paid for by the OEM, trying to explain to and appease an agitated consumer when the unit won’t be repaired under the OEMs warranty.

Fourth, if the dealer chooses to repair the unit when it does not adhere to warranty guidelines, he risks not being paid by any party and even risks the possibility of being charged for fraud by the OEM. Fifth, the dealer, not the box store or the OEM - will always be seen as the bad guy. Sixth, in cases where a dealer is faced with an actual warranty, there hopefully will be no hassles and thus no need to worry about conflict in filing the warranty. Seventh, this problem can rear its ugly head even if the dealer doesn’t work for box stores because, at some point in time, even one of your own customers may feel cheated by a warranty policy.

So what have I done to shift this responsibility back to the manufacturer in disputed warranty cases? Very simply, when this type of complaint rears its head, I offer the consumer a simple solution. I give him/her the telephone number of the manufacturer’s consumer complaint department. I give the consumer a detailed list as to what the problem is, what possible cost will be entailed, the proper information concerning the unit and finally the hours the manufacturer has this department in operation. I advise the consumer to be sure to write down the name of the person he talks to and tell him/her to give the OEM phone my name and telephone number so the manufacturer can call and ask.

Does this make the manufacturer happy? Not usually, but I am tired of spending my time, and especially money, on warranty complaints that often result in the policy adjustment solution. It almost never fails that when a dealer tires to be fair with the OEM and the consumer, the dealer makes out as the bad apple. Not only do I not need the conflict, I do not relish having an irate consumer making me look bad in front of other customers, especially since it is not my fault or warranty policy.

I’ve heard all the OEM speeches on how to handle this situation - how the dealer is the local OEM rep, and is to spend time explaining OEM warranty policy to every box store manager (manager who normally change each year and sometimes twice a year). The fact is, the majority of times it still boils down to the very scenario I’ve given.

Since I don’t make OEM policies, I feel it is time the OEMs shoulder more of the responsibility for their actions. I don’t like being chastised by the OEM or consumer for following procedure, and I am truly annoyed when a warranty is OEM-refused because the manufacturer decides the way I handled the problem failed to meet warranty guidelines. After being chastised by an OEM for advising the customer to discuss his problem with the OEM, I reminded the OEM, “I did not build the unit nor did I write the warranty guidelines.” You (the OEM) did, so I advised the consumer to go to the source.

To make this option easier to handle, I keep a list of manufacturers, phone numbers and addresses next to my computer, so at a quick glance anyone can advise the consumer on how to proceed. Yes, you still have the irate customer, but instead of the long, drawn-out battle, you have given the consumer a way to air his dissatisfaction about being denied a free ride. The result will be the same, but instead of you shouldering all the blame, you have given the manufacturer the opportunity to take care of his valuable reputation and customer relations. Remember, the customer is always right, or so I’ve been told.

Warranty is part of doing business and with all the business transactions the business owner risks being faced with irate customers and even possible legal threats. The one stress I’ve reduced is the aggravation over consumers demanding warranty when their machine’s problem isn’t covered by it. Every OEM emphasizes they make the final judgment. It is not up to the dealer, so since it is the OEMs ball game, I feel they should be more active players.

About the author: Dale Stotts owns and operates Stotts Engine Service, Post Office Box 206 Monett, Missouri 65708. The views of Dale Stotts do not necessarily represent those of e-KMI.com. Article courtesy: Power Equipment Trade magazine by permission. Power Equipment Trade magazine can be found at: www.poweret.com.

END

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