What does 'lifetime warranty' mean for electrical equipment?
When a supplier offers a lifetime warranty for industrial electrical equipment, this can often sound like a dream come true.
The idea that a warranty will cover industrial electrical equipment for its entire lifetime is certainly appealing — but is there a catch?
Before leaping to accept a lifetime warranty offer, it is extremely important to conduct research and read the fine print — as there can be some surprises in these so-called lifetime warranties. For instance:
- The warranty can exclude fair tear and wear. In most cases, electrical or electronic devices fail because of fair wear and tear ie, from reaching the expected duty cycle of the product, or from an unexpected or excessive event, eg, a transient or surge current. The lifetime warranty will not cover those failures.
- The ‘lifetime’ warranty can be entirely at the discretion of the supplier: the supplier can decide not to approve a claim. In other words, there is no guarantee that a claim under lifetime warranty will be allowed by the supplier.
- There is no guarantee that a replacement product will be available straight away — and replacements may not even be available locally. This leaves businesses at risk, with product or system failure or downtime and no replacement available.
- The warranty may not include onsite repairs, service or installation, or return shipping costs. These costs can be significant, particularly when installation is remote or the equipment is bulky.
Given the above, is there really any difference between a standard warranty compared to a lifetime warranty? Our view is that the answer is no.
Australian law already makes sure that any product sold is subject to warranty, and that the purpose of a warranty is to make sure that the product sold is free from defects. In the event there is a defect, the supplier has to repair or provide replacement. Although the lifetime warranty may be advertised to cover the entire lifetime of a product, in reality as shown above, there is little to no difference compared to a standard warranty. There is simply no added value or extra coverage under the extended or lifetime warranty.
When making a procurement decision, more than just quality products is required — reliable service from the supplier partner is also essential. The following questions should be asked:
- Does the supplier have available replacement products in stock? How quickly can I get a replacement?
- If you are exporting the equipment, will there be a source for components of the equipment? Will services be available at the place where the equipment operates?
- Will the supplier provide customised warranties for my project?
- How reliable and accurate are the technical data sheets and user manuals? Is the equipment and/or the supplier certified to applicable standards?
- What is the supplier’s track record?
Just asking these questions will help to narrow the field and rule out the ‘too good to be true’ offers. Once potential suppliers with the required level of service have been identified, then look at what type of warranty is needed for the electrical or electronic equipment being procured. Here is a useful checklist of what to do and look out for:
- Is the product covered under the warranty? Always read the standard terms and conditions and the fine print.
- What exclusions apply? If wear and tear is excluded, the warranty is likely no different than a standard warranty.
- How quickly are replacement parts available?
- How long will it take for the supplier to assess a claim under the warranty? Will you be left with downtime costs while a claim is being assessed?
- Does the warranty include onsite repairs or service or installation?
- What happens if the product is superseded during the warranty period? Will it still be replaced?
- How long will the warranty last? Can the supplier end the program at its discretion?
- Do you have to register under the warranty? What happens if you don’t register?
- Are return shipping costs covered under the warranty?
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