Warranty v Guarantee: What Do I Need?

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    Warranties and guarantees are critical to businesses, but they often get mixed up or thought of as the same thing by many people. The confusion can be especially problematic to your business as it could lead to the loss of a customer, which will have further consequences on your finances. Therefore, understanding what the different coverage warranties and guarantees provide will positively impact your business while also giving your customers the information they need.

    In order to help clear up the confusion, we have put together this article to help distinguish the differences between guarantees and warranties. With it, you should be able to make informed decisions on what your business can offer to its customers, allowing both parties to benefit in many ways.

    What is a Guarantee?

    A guarantee is a comprehensive promise to the customer that the product in question is of excellent quality. Guarantees are usually free and offered by the manufacturer. On top of it will be a promise to repair the product first if it becomes damaged and replace it second if the repair doesn’t do its intended job. Usually, the manufacturer does not plan for this to happen in the first place as they are highly confident that their product will meet expectations. But there are exceptions.

    For example, clothing companies can have ‘perfect-fit’ guarantees. Although 99% of buyers are satisfied with their purchase, the other 1% may not be and request a refund. Try-before-you-buy guarantees are also popular, especially among businesses that sell prescription glasses. They are so confident in their product’s abilities to satisfy that they offer free trials, almost like an incentive for the customer to test them out and then purchase. Sometimes, however, the customer may be dissatisfied and return them before buying.

    If the manufacturer cannot repair or replace the product, the consumer can receive a refund. However, consumers do not have the right to ask for a refund only if the product has not previously been repaired or replaced. This will be made clear to the customer so as not to cause any displeasure.

    It can be seen as acting in the best interest of the consumer over anything else.

    What is a Warranty?

    A warranty is similar to a guarantee in that both have comparable durations in which they are active. But there are differences. Warranties are commitments to customers that if their product defects in any way, the manufacturer will provide a free repair. There is, however, no offer of replacement.

    Let’s say a customer bought a white goods product – washing machine or refrigerator for example – and it suddenly broke down a month or two after purchase. They would not have to pay out extra for repairs as the manufacturer would be responsible for repairing it instead.

    Warranties can be seen as insurance policies and are often not free. Businesses usually include a standard warranty on the purchase of the product for a set period and then give the customer the option of an extended warranty at a cost. However, a warranty (insurance) does not cover accidental damage. Accidental damage can be bought additionally or included with the warranty. Accidental damage is a financial loss risk as opposed to a warranty. Warranties cover ‘the unforeseen failure of a mechanical or electrical component that is part of the manufacturer’s original specification’.

    On the other hand, extended warranties are there to replace or provide a cash compensation amount – which should be stated in the terms & conditions – if the appliance is ‘beyond economic repair’. That is, if the repair costs exceed the value of a ‘used’ appliance. Insurance aims to put the policyholder back in the same position as they were before the failure.

    Also, since guarantees are for products with a higher level of build quality, warranties are for products known to have frequent breakdowns and are mechanical in nature. Washing machines are not currently built to last, as most are made with planned obsolescence in mind.

    Lastly, one more difference to note is that warranties are more formal than guarantees. They are always produced in written form as a warranty card which is used as proof of purchase. Guarantees are less formal and harder to prove as they are not something explicitly bought by the consumer.

    Why should your firm provide the right warranties?

    Providing the right warranties can result in profit gained for your business. They can help sell a product and make it even more appealing to consumers. Additionally, it provides an assurance and gives peace of mind that they will receive a complete repair if anything were to go wrong.

    By providing exemplary service to your customers, you may receive an equally good review or recommendation in return. By providing a negative service, their word of mouth could result in the loss of more potential customers for the future. It could even lead to legal disputes if not handled properly. The customer is always right, so look to please them.

    Providing the wrong warranties could see loopholes be exploited if the product were to malfunction. Therefore, applying the correct terms and conditions that cover the right areas and features that are eligible for a repair is vital. In ensuring that these clauses accurately include all your requirements, you can safeguard your business’s reputation.

    There are a lot of legal and technical components that need to be considered, however. And that is where we come in to offer our expertise and help in the field of warranties.

    How Victis Corp can help you create effective warranties

    Victis Corp is designed for this exact situation. We are here to work alongside you in attaching the specific details and terms that give your product the complete coverage it needs. In doing so, we will also eliminate any problems you may have in terms of understanding this process.

    We have a fully comprehensive MI package that will manage and feedback valuable information relating to your product reliability. This set-up would cover service, call centre and administration costs deriving from one contact source for that much needed seamless journey.

    Contact us today by calling 0844 967 2600 or emailing info@victis-corp.com. We are there to help your business grow in a variety of areas, so be sure to make use of our quality services.

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