- Do you know the difference between guarantees and warranties?
- Have you trained your staff to manage warranties and how to honour them?
- Do you know about the 3 different types of warranties available?
Warranties are a voluntary promise that your business can choose to offer your customers. They can be about the quality of a product or how you will fix any problems with a product or service.
The terms and conditions of a warranty may require the consumer to do certain things to keep the warranty.
You cannot pressure or mislead customers into buying an extended warranty.
Reduce your risk of breaking the law
- Provide training to your staff about the laws.
- Be careful of the verbal promises staff make during the sales process.
- Don鈥檛 pressure customers into buying a warranty.
- Don鈥檛 mislead customers into paying for rights they already have under the law.
- Have effective procedures in place to deal with customer issues.
- Make sure all staff know the appropriate remedy for problems with a product or service.
Consumer rights are different to warranties
A warranty is in addition to consumer guarantees that automatically apply under the law. You must meet these rights and responsibilities too.
This means that a customer may be entitled to a consumer guarantee remedy even if the warranty period has expired or if no warranty exists at all. Remedies can be to repair, replace or refund.
Honouring your warranties
If you make a warranty to your customers, you must honour that warranty and comply with the terms you have provided.
Once the customer buys the product or service, the warranty becomes binding.
Types of warranties
There are 3 different types of warranties.
Warranties about a product鈥檚 quality
A business may make extra promises about a product鈥檚 quality or standard. These promises may be about what the product can do, for how long, and the availability of servicing, parts or identical replacements. This type of warranty is called an express warranty or common warranty. They can be verbal or in writing.
Consumers have a basic right that a business will comply with any express warranties they provide.
Example
A salesperson tells a customer that the bookshelf they are buying can hold up to 100 kilograms.
This promise is an express warranty, so the bookshelf must meet this standard. If it does not, the customer will be entitled to a remedy.
Warranties against defects
A warranty against defects or manufacturer鈥檚 warranty covers what a business will do if something goes wrong with a product or service. It may promise to repair or replace a faulty product, perform a service again or fix a problem with it, or otherwise reimburse the consumer.
A warranty against defects is provided in addition to the consumer guarantees and does not limit or replace these rights. After the warranty expires, the consumer guarantee of acceptable quality usually still applies.
Example
A customer hires a tiler to renovate their bathroom. The written contract states that the tiler will repair any tiles that become loose within 5 years of the tiling being carried out.
This is a is warranty against defects.
Extended warranties or care packages
An extended warranty or care package extends the length of a manufacturer鈥檚 warranty. Instead of being included in the sale of the product or service, an extended warranty is sold separately for an extra cost.
Learn more about warranties.
Businesses must not pressure consumers to buy an extended warranty or mislead them into paying for rights they already have under the law.
Example
A retailer states that they will only replace or repair a faulty product if the consumer buys an extended warranty.
This may be misleading as a consumer鈥檚 basic consumer guarantee rights already entitle them to the same remedy at no cost.