Manufactures and Extended Warranty Companies

Posted on September 7, 2013 by PSOC support 2 Comments

Manufactures and Extended Warranties, A Backwards Program

I will state  that I currently do not hold a board position on Professional Servicers of California Association and that the opinions here are my own.

Manufactures

In the past there was a Partnership between the Servicers Associations  and the Manufacture and Extended Warranty Companies. If one still exists it has long ago lost its luster. The manufacture used to provide Factory training and technical assistance and referrals for out of warranty customers. These carrots were the reason the Service Company accepted lower than COD rates.

Today hands on factory training is coming to a halt, replaced by webinars and online training videos if any training at all. Today some Manufactures are requiring that the Service Company PAY for access to technical material and use of the tech line in order to do Factory Warranty work. Meaning The Servicer is paying to get the information to work on the Manufactures Product. Does this make sense to anyone except the Manufacture? I think not. We now have to pay for drug tests and background screening. Again at the cost of the Service Company. The Manufactures still wants to pay lower rates and has taken away the carrots.

Extended Warranty Companies

In the past the Extended Warranty Companies paid a very fair rate, part markup with no cap. They did this because they realized that they had no carrots to give.

Today they want to pay a labor rate far below what the manufacture pays. They put a cap on parts in most instances, they want the Servicer to pay any shipping and handling charges out of the cap. In some cases the shipping exceeds what the cap is and the Servicer loses money.

Why Is This Backwards?

From the time the Service Company takes the service call until the repair is done, filed and paid, ALL the money out on the table is the Service Company’s. The Servicer in many instances has to fight  in order to get back their own money. A few companies pay the claims in a very timely fashion, most do not. This money  out on the table, are the Service companies being paid interest on this Loan? If you think about it the Service company in essence is handing out interest free loans. Maybe it’s time for a change.

Where is the customer Service?

I always try and give credence where due. I attend several conventions for Major Household Appliances. Some of the Manufactures and Extended Warranty Companies assist in providing Training , sponsorship for the Associations. This also applies to the Consumer Electronics Companies that Support this organization, and other Consumer Electronics Associations. I thank you for your support.

I would also like to acknowledge Sub Zero/Wolf and Panasonic for the Support they Provide to their customers, and to their Service Companies.

Tim L Ory

2 comments

  • avatar Richard L says:

    With manufacturer reducing their labor rates, I simply will reduce my availability to work on them. I’m already down to 1 warranty call per day. If they reduce my labor rates even lower, then my availability will be reduced down to 2 – 3 times per week.

    As for extended warranty companies, I will state my rates and if they don’t like it, I don’t have to work for them. I will let my competition know how to deal with these companies because sooner or later, they will feel the pain when warranty work is not getting done in a timely manner.

  • avatar Bruce Dewsberry says:

    Well said.

    This situation will continue until servicers unite and refuse to do warranty (or out of warranty work – I’m thinking of Whirlpool and GE charging for out of warranty tech support). All servicers will need to stand as one (does the word boycott sound familiar?) until the manufacturers come to the table and enter into real negotiations, rather than the annual adhesion contract – take it or leave it.

    Also, the ever increasing documentation demands (online status updates in particular), contact time limits, time to repair, etc…, contribute to the manufacturer stepping ever more into the gray area of distinction between contractor and employee per IRS definitions in my opinion.

    Finally, let’s not ignore the increasing electronic complexity and trouble-shooting by educated guess (even among manufacturer tech support) resulting from green regulations.

    Today’s appliances have 1/3 the lifespan of older units, break down more often during that life-span, and result in greater resource depletion and toxic e-waste.

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