Whether you’re purchasing something new for your house or you’re organizing purchasing for an entire organization, it pays to be able to read and evaluate warranties objectively. But what exactly does this require? And how can you get better at evaluating warranties?
The Basics of Warranties
A warranty is a guarantee for a given product.
Manufacturers and salespeople will often offer warranties as a form of assurance to their customers, providing them with guarantees of replacement, reimbursement, or a refund in the event that the product doesn’t do what it’s supposed to do during a defined period of time.
For example, dry type transformers usually come with some kind of warranty, often around one year. If you install your dry type transformer indoors and in a clean, dry environment, you may qualify for a warranty of up to five years.
If the transformer fails during this specified timeframe, and the conditions of the warranty aren’t invalidated, the person who purchased the transformer may be eligible for a refund, replacement, or both.
There are many different types of warranties:
Written warranties. Written warranties are the most common and the most legally binding.
It’s your right as a consumer to have access to the written warranty before making a purchase, and it’s the legal obligation of the business issuing the warranty to follow through on any promises or assurances made.
However, it’s important to read warranties closely before purchasing, since there may be some fine print that makes the offer less appealing or less useful.
Spoken warranties. Some salespeople will offer spoken warranties, claiming that a given product is going to last a certain number of years or offering a promise to make repairs when necessary.
However, it’s important to realize that spoken warranties often aren’t legally binding. If you have a deal, get it in writing.
Implied warranties. There are some implied warranties that carry legal weight. For example, a warranty of merchantability is an implied promise that a given product is going to perform in the way it’s meant to perform.
If you buy a toaster, you expect it to be able to toast bread; if it doesn’t, you should be eligible for a full refund. A “warranty of fitness for a particular purpose” is an implied promise that a product is going to accomplish what it purports to accomplish.
Extended warranties and service contracts. It’s important to realize that extended warranties and service contracts, despite their name, are not actually warranties. They may be worth considering, but they are separate concepts.
What to Look for in a Written Warranty
So what should you be looking for in a written warranty?
- Warranty length. How long does this warranty provide coverage? The length of time a warranty covers is usually dependent on the product and the industry, though some manufacturers are more generous than others.
- Warranty coverage. What exactly does the warranty cover? Many people are surprised to find out that warranties offer specific exclusions; for example, a repair may not be covered because it happened in response to a certain type of damage.
- Warranty conditions. Certain conditions may void the warranty. Be sure to read this document closely so you know what those conditions are and are able to avoid them.
- Business reputation. Next, you’ll need to think about the reputation of this business. While a warranty is a legally binding document, warranty disputes can be hard to settle, especially if a company doesn’t have dispute resolution standards. The better the reputation of the business, the more reliable the warranty (generally).
- Extra costs and fees. Are there any extra costs or fees associated with this warranty? For example, are you responsible for paying for certain types of services?
- Pursuit of service. If something does go wrong with this product, how do you go about filing a claim? Where are you allowed to get service? Do you need to go straight to the manufacturer or can you work with a third party and ask the manufacturer for reimbursement?
- Options in the event of product failure. What happens if the product totally fails? Are you eligible for a full refund, or are you required to repair the product?
- Consequential damages. Very few warranties offer consequential damages, the practice of reimbursing you for any damage that a product caused. But it may be worth getting in some situations.
Additional Warranty Tips
Additionally, you should follow these warranty tips:
- Always get it in writing. Never take a person’s word for it. Always get your warranties in writing, and review them before finalizing your purchases.
- Keep copies. Keep extra copies of your warranties as well.
- Organize wisely. If you have many different products to manage, it’s especially important to stay organized. Keep your warranty documents with the products associated with them.
- Be prepared to handle disputes. If the company doesn’t honor your warranty, you have some options. You can file a dispute with the business through a process they’ve defined in the warranty, or send them a demand letter.
In some scenarios, further legal action may be necessary.
Warranties can be long, confusing, technical documents. But if you’re willing to read the warranty in full before making a purchase, you’ll likely end up with much better legal protections. It’s not a fun process, but it’s a necessary one if you want to get more value as a consumer.