Warranty or Guarantee?

By Charles Bursey, Sr.

I know that many of you have faced the subject of warranties and guarantees, and I wonder if we really recognize their purpose and meaning.  Over the years, I have been baffled by this subject, and when I talk to the buyer or the end user they don’t seem to have a true understanding either.

There are several variations of the above that I have encountered over the years of buying as well as selling. Take limited life time, three-year and five-year warranties. Most have something in fine print that I have overlooked. For example, if a boiler should leak and the PH of the water content is not within a specific range, the claim could be denied.  And, when it comes to checking the warrant of a product, we often have a hard time identifying the date of manufacture so that we can be sure that we do in fact have a claim. It seems to be some type of secret code! Why?

There is another issue I was guilty of, and that was having parts that were out of the warranty code on my trucks and in my stock room. Perhaps you may want to check your own stock to see how may yellow-colored boxes you have on your vans and in the stock room. Keep in mind when you replace a heating or cooling part, the customer most likely will want to know what the warranty is before paying the bill.

Now, let’s move on to an example that could become an actual situation. You replace a part on your customers, system that failed during one of  this winter’s – 9° nights and you charge them $350.00 for the part (example) and an overtime rate of  $180.00 per hour for 2 hours ($360.00) for a total charge of $710 plus tax.  Your customer pays the bill and as is the company policy, the technician informs the customer that the work is 100% guaranteed. A few days or maybe a couple of weeks later, and this same customer calls to say that there is a service problem and that was determined to be caused by a faulty new part. The technician replaces the defective part including the labor at no charge, which is covered by that 100% guarantee. No worries, so we think. The part is under warranty and the manufacturer will honor the part warranty. Next the part gets returned to the supplier who, after possibly a week, informs his customer that the part is out of warranty determined by the date code. The end result is lost revenue both on the part and labor.

I know it is very common when a company is sold that prior to completing the acquisition a physical inventory of rolling stock and service parts are date checked, and often several thousand dollars of out dated parts are eliminated from the sale. I guess this is why so many parts often end up on a website.

The status of a warranty has, and still, confused me. Again like I mentioned earlier, there are limited lifetime or 10-year warranties on some boilers. There are one-year and even five-year on some components. Have your ever called about a warranty, taken pictures and proved that it was the original owner that purchased the unit as required, only to be told that the unit had to be returned to the manufacturer for examination before the credit could be issued? I would recommend that you track every warranty to be sure that you get the credit due, and if you don’t, be sure to ask why. There could be many dollars recovered over a period of time for warranty claims.

I must say that most of the suppliers and manufacturers do a very good job at honoring the warranty for products they manufacture or sell. But it’s very rare to get a labor credit unless it is a very unusual situation. I also think it’s both helpful and educational to learn what the problem was that caused a product failure, and, yes, it could be the result of human error. Because of human error, you may have noticed that several manufacturers have gone to what I call the “Plug & Play” concept.

In closing, warranty generally means something in writing that is offered in the form of refund, by the company, due to product failure.  A guarantee is generally an agreement to repair an area of defective workmanship or item.

Charlie Bursey began his long career in the oil heating industry in 1963. He has delivered coal, kerosene and oil and serviced heating and cooling equipment. He has also managed service departments, worked for a manufacturer and currently works with F.W. Webb, Warwick, R.I. He is a recipient of the Association of Oil & Energy Service Professionals’ prestigious Hugh McKee Award for making an outstanding contribution to the fuel oil industry; having had an understanding and cooperation with his/her fellowman; and having unselfishly aided the industry in education and related activities.