Problems With Warranties

Like it or not, longer standard and extended warranties are apparently here to stay. With them come two major problems for a/c contractors.

First, only those a/c contractors appointed, authorized, approved, etc., can make repairs and be reimbursed by the manufacturer. Labor rates may be too low for the contractor to make a profit and there may be insufficient or zero markup on parts. Those contractors approved, etc., effectively have the consumers holding warranties as captive customers, preventing competition or choice by the consumer.

The second problem is that it’s almost impossible to keep up to date on what brands, models, etc., have what warranty “out of the box,” much less if there is an extended warranty in effect. Manufacturers say it is the consumer’s responsibility to inform the contractor of their warranty. The problem is, many consumers’ a/c systems came with their new home and they didn’t receive the warranty or misplaced it. Others can be second owners, or they just don’t remember the warranty that came with or was purchased when they got the system.

The consumer looks to the a/c contractor to be the “expert,” including knowing what is covered and what is not. At the time of service, they want it repaired now, and often don’t worry about what the warranty is. After the repair, they do a little research and find that the parts or parts and labor were covered. It is now [that] they want a refund or reimbursement from the manufacturer. Neither is usually possible. The oem part was not used or not saved for return, the contractor is not approved, etc. The consumer then says the contractor should have known better.

These problems need solutions and I hope ACCA can help provide them. As to not being approved, etc., for a certain brand, I don’t think that will change, as manufacturers encourage contractors to sell their equipment and extended warranties with the prospect of holding these customers captive for their service departments. This is not a major problem until they fail to provide adequate service (e.g., several days’ wait for service in hot or cold weather, and no response from the 800 number from the manufacturer).

The second problem, “what is the warranty,” could be addressed by manufacturers providing a detailed list of out-of-the-box warranties to ACCA and keeping it updated. Out-of-the-box warranties could be added to the manufacturer’s model/serial label on the equipment. Extended warranties could include an additional label to be added to the equipment. In either case, the consumer would still have to provide proof-of-purchase data.

Additionally, some manufacturers have changed warranties on a regional basis to meet competition (e.g., Payne products sold after a certain date in Florida have a 5-year parts warranty, but the warranty papers “in the box” do not reflect this).

Can ACCA be part of the solution? Please consider this at your next board or executive committee meeting and let me know.

Fellow a/c contractors, have you experienced similar problems with warranties and extended warranties? Or do you have another opinion on this subject? If so, please write or call ACCA and/or the trade press.

David S. Hutchins, President Bay Area A/C & Heating Crystal River, FL

ACCA Replies

There is no doubt that you have raised interesting and important questions for the hvacr contracting industry to address.

We agree with you that the issue of manufacturer-approved, warranty-based, “captive-customer” contractors can be a vexing one for those contractors that are not on a manufacturer’s “approved” list. We also agree that it is a manufacturer issue best left for the marketplace to solve at this time.

In regards to the second issue, concerning consumers’ lack of awareness about the warranties under which their equipment is covered, and subsequent difficulties contractors can face in receiving payment for work performed — we believe that there may be some potential solutions to explore. We will place the issue on the agenda of the next ACCA board of directors meeting.

At the new ACCA, we are always open to recommendations and suggestions from our contractor members. We are a member-driven organization, and depend on this feedback to ensure that our services, programs, and positions are truly focused on the needs of hvacr contractors.

Thank you for your support of ACCA and this excellent recommendation. And please, always feel free to contact the ACCA staff or president directly in the future with any further ideas, comments, suggestions, or criticisms. We are here to serve you, and are most eager to do so.

Larry Taylor, President Paul T. Stalknecht, Executive VP and CEO

Publication date: 09/03/2001