Archived Copies of Warranty Week

December 2002 to Today

Appliance Warranty Expense Report: While the HVAC industry is known for its long warranties and low warranty expense rates, the household appliance industry is known for its volatility. In 2019, claims fell and accruals rose, but the big news is the jump in expense rates seen in early 2020, caused by a recall in Europe.
June 4, 2020
Telecom Equipment Warranty Report: Warranty claims, accruals and reserves rose a bit from record low levels in 2018, but the long-term decline in the telecom network hardware industry continues unabated. Several mergers contributed to the recent increases, while some of the largest industry players continue to increase reliability, cut costs, and drive down their warranty expense rates.
May 14, 2020
Computer Warranty Report: Warranty accruals and reserves rose for the first time in years, but the long-term decline in the computer hardware industry continues nevertheless. Apple and HP see only minor changes in their warranty metrics. But some of the top disk drive makers are seeing expenses rise significantly.
April 30, 2020
Homebuilder Warranty Report: All the metrics were up in 2018, and the growth continued into the first quarter of 2019. Claims and accruals are back to pre-recession levels, and warranty reserves hit a new record high. Meanwhile, the level of warranty expenses per new home sold show some curious and sudden spikes for some builders and long-term stability for others.
June 13, 2019
Sixteenth Annual Product Warranty Report: Warranty costs are rising but sales are rising faster, meaning that the percentage of revenue consumed by warranty expenses remains at the low end of a decade-long decline. But can expense rates go even lower, or are we at the bottom now? A look at the totals and averages in 2018.
March 21, 2019
Solar Equipment Warranty Expense Rates: It's a bit of an actuarial nightmare. Relatively young companies in new and unproven industries issue very long warranties for which multiple years or even decades can pass before claims arise in volume. But eventually, products mature and claims exceed accruals, and reserves begin to deplete. Then the actuaries break the bad news: it's time to raise rates.
August 30, 2018
Automotive OEM Warranty Report: The car manufacturers used to spend a greater share of their sales revenue on warranty work than the truck manufacturers did. But because of persistent cost-cutting, that is no longer the case. Last year, car manufacturers cut their expense rates to below-average levels, while the truck manufacturers were slightly above their long-term average at the end of 2017.
April 5, 2018
Automotive Warranty Expense Report: While the individual manufacturers see their claims, accrual, and sales totals change up and down from year to year, some long-term trends are also evident. The carmakers are cutting costs the most and the longest, while the powertrain manufacturers are falling behind other types of suppliers.
March 30, 2017
Service Contract Pricing: Appliances: While the typical appliance service contract costs roughly 14% to 16% of the price of the product it protects, there is an enormous amount of variation, depending on which administrator the retailer works with, how long the contract lasts, and whether the product is low end or top of the line.
February 9, 2017
VW's Emissions Warranty Scandal: Some students cheat on tests. But companies rarely do, because the cost of getting caught is very high. And in the long run, someone usually snitches. So isn't it ironic that a bunch of students caught one of the world's largest manufacturers cheating on a test?
October 1, 2015
Warranty Training Seminars: Instead of multi-day training packages for warranty and service contract industry professionals, the GWSCA has scaled back its educational efforts to hour-long webinars and training seminars tacked onto the agenda for its annual conference next week.
September 10, 2015
Aerospace Warranty Report: Because a few big manufacturers dominate the industry, their problems or successes with warranty cost control can change the industry averages significantly. But over the long term, the trend is clear: aerospace suppliers have learned how to cut their warranty expenses and keep them low. The OEMs? Not so much.
April 2, 2015
New Home Warranty Report: Sales are rising and home prices are increasing, but warranty costs are remaining the same. So the cost of new home warranties as both a percentage of sales and on a per-home basis are declining, in some cases to record low levels. Is this the beginning of a long-awaited recovery in the new home industry?
January 30, 2014
Extended Warranty Survey: At long last, warranty researchers are publishing the results of surveys and vendor assessments, as the industry matures and the appetite for analysis and expertise grows. One study was released and another was previewed at this week's WCM Conference.
March 8, 2012
Implementing iWarranty: 4CS Inc. has a long history of outfitting agricultural and construction equipment makers with its Web-based warranty claims processing software. More recently, it's added a pair of electric car makers, along with two of the biggest construction equipment makers headquartered outside the U.S.
October 28, 2010
Worldwide Warranty Providers: With the attention of Americans turned towards long weekends at the beach, barbecues and mountain getaways, we turn our focus to ten well-known international brands that are among the few non-U.S.-based companies to reveal their warranty expenses.
July 3, 2008
Green Warranties, Part Four: Solar cell manufacturers betray their youth and inexperience when it comes to warranty accounting. Very long warranties, new technology and rapidly increasing sales don't make their jobs any easier.
June 5, 2008
The Institute of Warranty Chain Management: Membership opens this spring and certification courses begin in the fall. Yet some people still wonder why it's taking so long. The reason is a perceived need by the board to develop content and services to retain members before recruiting them.
March 19, 2008
Dell's Warranty Accounting: While it came up short in terms of scandal and financial impact, Dell's accounting investigation did produce one benefit. At long last, the company separated its basic and extended warranty programs. And it turns out that extended warranty was even bigger than we thought.
November 7, 2007
Warranty Analysis Software: Skeptical buyers and long sales cycles can be overcome with relevant demos using a customer's own data.
January 25, 2005
Seagate's 5-yr. Warranties: Is it a bold marketing move that will increase sales? Or is five years a bit too long for a product in such a fast-changing industry?
August 3, 2004
Setting Warranty Policy for Products That Generate Annuity Streams: Most warranty-management analysis concerns warranty as cost, the effect of warranty on customer satisfaction, or the signaling impact of warranty on customers. This article describes a study where the focus was not on the product under warranty, but rather on the effect that warranty length might have on the sales of related peripherals and supplies. These sales generate annuity streams for the manufacturer as long as the product remains in operation. However, cost savings from a shorter warranty period must be weighed against potential lost profit from reduced annuity streams. A shorter warranty policy might cause products to drop out of active use sooner, and the cost savings from a shorter warranty policy therefore might be outweighed by the lost annuity profits.
July 13, 2004