Warranties Are A Big Drain

First, I will tell you that I own an hvacr company in rural southeast Missouri. We do $1.5 million in annual volume. We sell primarily Trane equipment, with a little Bryant and other brands to fill in.

I find the manufacturers’ extended parts warranties to be a major pain and go to great lengths to downplay them when talking to our customers. We tell customers that the only warranties that we consider to be legitimate are the warranties that cover both parts and labor. We do include a lot of the Trane or Equiguard warranties on our high-end sales. We frequently offer extended warranties on the standard and low-end sales.

I can say that from a profitability standpoint, it is a major drain on us to run parts warranty calls where we can only bill a nominal sum for labor. Even the nominal sum usually winds up making the customer mad. On our technicians’ goal board, it really comes to life to see the difference between a regular warranty call and one that had an aftermarket warranty. The aftermarket calls pay off of our flat-rate book rates. When we post these numbers and compare them to the others, there is little left to argue about which is the better system.

We all understand that parts cost to a manufacturer is almost insignificant. They can hand out circuit boards or transformers all day long and not have any major financial impact. I would much rather see a small discount on the price of the equipment, or just a little better ad program, or one extra training meeting per year, than to see another year added to the parts warranty.

In conclusion, I would answer your question of who is the winner. Hall proposed that the manufacturers, the distributor, the dealer, and the customer all win. I find in my experience that we all lose. The manufacturer, distributor, and dealer all wind up with a lot of papers to be filed and tracked with no profit involved, and the customer winds up being shocked to find what they owe to have a repair done that they perceived to be covered under warranty when they bought the equipment.

Thanks for opening up the dialogue.

Tim Funke, Aire Serv Heating and Air Conditioning, Poplar Bluff, MO

Is This Relevant?

I want to start off by saying that it was a very well written article, but how does this article translate to residential and light commercial heating and cooling companies?

I do not believe that the author has a firm understanding of our industry. I would much rather hear from an industry expert who has either been an extremely successful salesman in our industry, or a successful business owner.

It seems that this article was put into the magazine to “fill space.” After reading the article, I came away with a sense of disappointment.

I have been reading The News for a while now. The articles about mold and how to protect yourself were absolutely great. Thanks for your time, and try to do better in the next issue.

Ryan Tiller, Vice President, T&C Services, Garland, TX

Publication date: 04/29/2002