Parts Warranties: A feature and a benefit for your business

Jan. 1, 2020
I am sure that most of us who have stood behind the counter in an automotive repair shop anywhere in the U.S. have had the discomfort of helping a customer who is returning with a warranty issue. I am not talking about the guy who pulls out of our sh
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I am sure that most of us who have stood behind the counter in an automotive repair shop anywhere in the U.S. have had the discomfort of helping a customer who is returning with a warranty issue. I am not talking about the guy who pulls out of our shop after we have done his brakes only to return 10 minutes later complaining that his car is running rough and that he didn't have a problem until we touched his brakes. I'm talking about that customer who had a water pump installed six months ago or that woman in a minivan who had us install a hub bearing.

Americans in general do not maintain their cars the way they should, and there are plenty of bad drivers out there who stretch the limits of automotive engineering every time they sit in a car. Beyond all of that, parts occasionally do fail. It's a fact of life. Of course, your customer does not necessarily want to hear that after sitting on the side of the road for three hours waiting for a tow truck. He definitely doesn't want to hear that the $642 water pump that he had installed last summer is bad and not covered by the 4,000-mile, 90-day warranty you gave him when you sold him the job many months ago.

Now here's the scary part: I'm going to tell you to ignore that warranty even though you have every legal and rational right in the world to enforce it. And I am going to tell you to take the opportunity to take this unhappy customer and turn him or her into a customer for life by fixing his or her car without delay, without argument and without reservation.

I want to step back from the individual customer with the individual water pump we are talking about above and take a look at the broad view of our business, what drives it and what separates it from all of our competitors. Most of us like to think that our quality is better or that our prices are more reasonable. But at the end of it all, it doesn't matter much what we think of our shop; it's what our customers think. That's what drives our business.

We are in the business of taking care of the automotive service and repair needs of anyone who walks in our front door, and their perceptions of us is our reality. Very strong perceptions can be formed, both good and bad, as we are handling a potential warranty situation.

My very strong recommendation is do everything reasonable to allow your customer to walk away from this with a win. His win today will be your win many times over in the months and years to come. You see, just as a customer will avoid going back to a shop that he or she feels has ripped them off, they will trip over themselves trying to get back to a shop that has exceeded their expectations and treated them in ways that they would consider fair.

In denying their warranty claim, you verify all the negative perceptions they have of our industry. However, in allowing them the win on this one part, you have shocked them by being reasonable and given them a very good reason to come back.

The Parts World

Competition in the parts world is keen, and I would assure you that any parts supplier worth his or her salt is going to help you through these warranty situations. Or if he is not, it might be time for you to investigate what the competition is offering in the way of warranties and what they are offering in the way of service. If your parts supplier is not partnering with you and helping you help your customers, I would find another partner who will.

Though all of us hate these warranty situations, in the big world of parts failures encompassing everything from engines to bearings, parts fail only about 5 percent of the time in the first 12 months after installation. That's 5 percent! Above and beyond this, a lot of manufacturers and parts suppliers are offering 18-month limited warranties on a broad range of parts and a willingness to work with shops in addressing these types of issues.

Engines, transmissions and electrical parts aside (warrant these as logic suggests), it was a rare thing in my many years behind a counter where I had to pay for a failed part within the first year.

I would even tell you that among these hundreds of parts, there were many both I and the parts supplier knew were well out of warranty. This is not a case of me ripping off the parts store; this is me having a great relationship with my supplier. He got my first call on parts, got several thousand dollars in purchases from me each month and occasionally I got to ask him for a special favor or his assistance in handling a warranty. I would even tell you that I would occasionally press on an electrical part or a part that might have been damaged by my tech or by the customer, but just as often I would look the other way when the part was wrong or delivery was slow.

I always made sure I had a great relationship with my parts supplier and made sure that it was a win for him and a win for me and my customer. If a parts supplier is not willing to partner with me in taking care of my customers, I simply have the wrong parts supplier.

In the end, it is not your parts supplier, but you who need to stand in front of your customer and not only meet but exceed their needs and expectations. If all of the shops in your area are offering a 12-month, 12,000-mile warranty, I would double that to 24 months, 24,000 miles and make sure that I talked about this in my marketing and especially in my selling process. In every interaction, every presentation and every conversation we have with our customers, we have to drive home the point that we are better than the competition and give them great reasons to keep coming back.

Parts failures are rare enough that the extended warranty is not a huge financial risk but the extended terms allow me to stand out from my competition and are a huge feature and benefit in the selling process.

Though warranties are painful when they occur, car count and customers walking in our door are the things that assure our viability. I can promise you that the word of your efforts toward satisfying your customers will get out there and have everybody and his cousin beating a path to your door.

That one leaking water pump means nothing against a reputation for honesty, integrity and great customer service. It is easy to remember those occasional warranties, both for the financial impact and the less than satisfying customer interaction. Happy customers and the referrals that come out of how we handle our warranties are less obvious but something worth considering. Happy customers pay for everything.

Parts fail a part of life in the automotive repair business. Mishandle these warranty situations and I can guarantee you will have a lot more than tech compensation and a parts bill to worry about.

Brian Canning is a 30-year veteran of the auto repair industry who recently moved to the federal sector as a business analyst. He also was a retail sales manager for a distributor, run a large fleet operation and headed a multi-state sales territory for an independent manufacturer of automotive parts.

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