Do you know what you do if your customer isn’t completely satisfied with your product or service? Will you offer a full refund, partial refund, store credit, even no refund? You might want to consider a product and service warranty, which demonstrates that you’re company willing to stand behind what you sell.
About product and service warranties
The length of the warranty you offer will depend on your industry and your product. The particulars of the warranty will depend on the situation. Some components of the products you sell will come with warranties from the manufacturer. For service-related businesses, your warranty covers satisfaction with your work.
The product or service scope should be considered. Will the warranty you offer cover all products or just some? Same warranty terms or different? The market scope should also be considered. Should the same warranty be offered in all markets, or just some? This decision will rest on local laws.
Consider also what the customer must do or not do to keep the warranty valid. Who will honour the warranty — the manufacturer, wholesaler, retailer, or dealer? Customers aren’t often fond of mailing products back to the manufacturer, so who should be responsible for fixing a warranty claim?
Warranty claims involve a cost to your business, but you should consider the cost of not having a warranty at all. We recommend that you review your product or service warranty program with a lawyer or other professional. This way, you can get advice on the extent of risk your business is potentially carrying.