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The Complete Guide For Understanding Warranties

Aug 08, 2013
What is a warranty?
Normally, when you make a big purchase, the manufacturer or seller makes an important commitment to stand behind the product. Both in the US and the UK, this is called a manufacturer warranty, however sometimes in the UK it's also called a guarantee (we’re going to use the term warranty from hereon). In short, a warranty is a promise to provide repair, maintenance, replacement or refund of a product for a certain time period.
 
 
How does a warranty work?
Although not required by law, warranties come with most major purchases. Different manufacturers have different warranties, which also means that the extent of the coverage of warranties varies. Below are some simple answers to common questions about warranties:
  • How long does a warranty last? It depends. Only way to find out is to check the warranty document to see when it begins and when it expires, as well as any conditions that may void coverage.
  • How do I enforce a warranty? It’s either the seller or the manufacturer that is providing you with the warranty. You need to check the contact information and enquire before buying if still uncertain.
  • What happens if a product fails within the warranty period? Go through the warranty document to see whether the company will repair the item, replace it, or refund your money.
  • What parts and repair problems are covered by warranty? Again, it depends. Read to see if any parts of the product or certain types of repairs are excluded from the warranty. In some cases, warranties oblige you to pay for labour costs. Also, it’s worth keeping in mind to look for criteria that could prove costly or problematic to comply with, such as a requirement that you ship heavy or large objects to a distant address for service, or that you return the item in the very original carton.
  • Does a warranty cover "consequential damages"? In general, the answer is no. Most warranties do not cover damages that are caused by the product, or your time and costs for getting the problem repaired. To keep it simple, if your iPhone breaks down, the company will not pay for any lost information that was stored on it.
  • What is a limited or conditioned warranty? Certain warranties provide coverage only if you keep or use the product as directed. For example, a warranty may cover only personal uses—as opposed to business uses—of the product. As such, it’s important to check that the warranty will meet your needs.
  • How does an oral warranty work? In theory an oral warranty stands. To be safe, if a salesperson makes a commitment orally, e.g. that the company will provide free repairs, make sure to get it in writing. If not, you may not be able to get the service that was promised.
 
What is an extended warranty?
Often when you buy e.g. a major appliance or gadget, you may be offered an “extended warranty. To be clear, the term “extended warranty” is marketing lingo and, legally, we are talking about a service contract. Service contracts, like warranties, provide repair and/or maintenance for a certain time period. Now, the difference is that warranties are included in the price of the product whereas extended warranties costs extra and are sold separately.
To decide whether you need an extended warranty, consider:
  • if the manufacturer warranty already covers
    the repairs and the time period of coverage that you
    would get under the extended warranty 
  • whether the product is likely to need repairs and the likely costs of such repairs
  • the duration of the extended warranty
  • the standing of the company offering the extended warranty
  • the cost of the extended warranty vs. the cost of the product
 
What protection does the law give me if my product breaks?
In the U.S. and the U.K., consumers are protected to an extent by law. As you can imagine, different legislative systems will provide different statutory rights.
 
Consumer Rights in the U.S.
“Implied warranties” are created by state law, and all states have them. Almost every purchase you make is covered by an implied warranty.
 
Types of implied warranty
  1. Warranty of merchantability – the most common one. It means that the seller promises that the product will do what it was marketed to do. E.g. a coffee brewer will brew coffee.
  2. Warranty of fitness for a particular purpose – if you buy a product on the seller's advice that it is suitable for a particular use. For example, a retailer who recommends that you buy a certain jacket made for sub-zero degree weather warrants that the jacket is suitable for sub-zero weather. Again, get it in writing.
The exception that confirms the rule: If your purchase does not come with a written warranty, it is still covered by implied warranties unless the product is marked "as is," or the seller otherwise indicates in writing that no warranty is given. 
 
The length of implied warranties vary from state to state, but could be as long as four years. If you aren’t sure, a consumer protection office or a lawyer can help you.
 
Consumer Rights in the U.K.
Consumers are well protected by default and a key rule is the Sale of Goods Act 1979. In short, it says goods should be of satisfactory quality, fit to do the job intended and last a reasonable length of time.  
 
The “6-month” rule
When a good is faulty, you have the right to take it back within six months of your purchase and the retailer has to prove that it was not faulty when you bought it. Even after the first 6 months, you still have strong rights for six years, but the evidential burden has shifted to you, meaning you have to prove the good was faulty at the time you bought it. 
 
If a retailer doesn’t agree with your claim and you believe you are still right, your only option is to take them to court.
 
 
Tips on how to minimize problems with your warranty?
  • Read the warranty before you buy. When online, look for links to the full warranty or contact details to get it sent to you.
  • Save the warranty information. Save a copy and keep it with your records. If you already lost it, you can almost always  retrieve a copy of the warranty details online or by contacting the manufacturer. One of the services that we at Unioncy offer is to automatically gather all your warranty details in one place for you.
  • Consider the reputation of the company offering the warranty. Look for contact details. If you're not familiar with the company or uncertain, ask a consumer protection office (US: http://www.consumer.ftc.gov/) (UK: https://www.gov.uk/consumer-protection-rights) if they have any complaints against the company.
  • Save your receipt and store it with the warranty. You may need it to document the date of your purchase or prove that you're the original owner in the case of a non-transferable warranty.
  • Follow instructions. Perform required maintenance and inspections and use as advised.
 
How to resolve disputes about warranty rights?
If you have problems with a product and struggle to get the warranty service:
  • Read your product instructions and warranty carefully. Don't expect your product to do something that it wasn't designed for, or assume warranty coverage that was never promised in writing. A warranty doesn't mean that you'll automatically get a refund if the product is defective—the company is normally entitled to try to fix it first. On the other hand, if you made a warranty claim during the warranty period and the product wasn't fixed properly, the company must correct the problem, even if your warranty expires before the product is fixed. 
  • Try to resolve the problem directly with the seller. If not possible, write to the manufacturer. Your warranty should list the company's mailing address. Send all letters by certified mail, return receipt requested, and keep copies.
  • Contact a consumer protection office. 
    US: http://www.consumer.ftc.gov/ 
    UK: https://www.gov.uk/consumer-protection-rights
  • Go to a small claims court (U.S.). If your disagreement is about less than $750, you can usually file a lawsuit in small claims court. The costs are relatively low, procedures are straightforward, and lawyers usually aren't needed.
  • Last resort, you may want to consider a lawsuit. You can sue for damages or any other type of relief the court awards, including legal fees. Contact a lawyer to assist you with your case.
As consumers, we could all save money and time from managing and enforcing our "warranty" rights that are either granted by law or offered by companies (that are competing for our attention in the market). With little thought and effort into understanding the warranty, saving the documentation and knowing how to make a claim you are well on your way to extend the lifetime of your products, reduce buy-throw behaviour, save money and get the most from your products.
 
Happy organizing!
 
 
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