Hope for Contractor Callbacks?

Callbacks are a pain in the ass. There, I said it. You’ve all been telling us this, so I don’t think it comes as a shock to anyone. Manufacturers have been caught up in a game of warranty one-upmanship for several years, with warranties getting longer and longer to make their systems more attractive to potential buyers. This can affect the amount of time and reimbursement a contractor receives for the callback, but there are still some time-based aspects of in-warranty callbacks that are not reimbursed.

Improving the quality of installations has been a huge focus for the Air Conditioning Contractors Association (ACCA), with its Quality Installation (QI) spec, which is being adapted in areas across the country. It places a great focus on measuring the airflow and the refrigerant charge as a regular part of the installation process - areas where a lot of screw-ups get started. These errors might not show up right away, but they can degrade system performance and longevity significantly over time. System problems lead to callbacks. If it’s still under warranty, it goes back to the manufacturer as an in-warranty return.

The manufacturer then checks out the returned equipment to see if it was, in fact, a manufacturing defect. According to many manufacturers we have spoken with, this is generally not the case. They call these inspection types “no defect found.” That means it was something the installer did, or didn’t do, that led to the problem.

SUBTYPES

Contractor Larry Taylor of AirRite A/C explained the different categories of warranties and returns, as he sees them:

• Callbacks, he said, are “directly related to a labor or mental error on the part of the installer, technician, or other labor-related issues that are directly under the control of the person.”

• A warranty return is directly related to the product, equipment, etc., and it’s out of the direct control of the person.

• Returns, he said, are related to in-warranty parts, excess supplies, etc., that are being returned to the manufacturer or other vendor.

Callbacks are the one that really eat away at a contractor’s profitability. They are most positively impacted by education, not just of the installers but also supervisors and dispatchers, Taylor said. Training, he said, has caused his company’s callback rate to go down. The numbers prove it. The company also made a conscious decision not to overload its techs during rush times (remember those?), under the wise philosophy that rushing them when they’re fatigued leads to errors.

Some contractors, like Taylor, keep what they call a warranty reserve - in Taylor’s case, that’s roughly 2 percent of the sales price; the amount of additional time to meet the requirements (around 2-3 hours for testing and balancing, etc.). “This additional cost to the job on the front end is minor compared to the warranty reserve recovery we had,” Taylor said.

Now that the company has been providing more training and quality control for its installations, “all the warranty reserve we set aside for installations has been returned to the bottom line of the company.” Over time the company may lower its warranty reserve percentage downward, which could mean a lower price with no negative impact on the quality of the installation.

Improvements to the quality of installed HVAC systems, in addition to a growing consumer demand for this quality, can mean healthier products for every legitimate player in the market. By “healthier,” I mean no one suffers from it.

Publication date: 06/15/2009