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August 20, 2022  |  Education

Warranty 101: What to know before you buy

Anytime you buy something, there’s a risk involved. To offset that risk, you want assurance that the product you’re purchasing can actually do what it’s advertised to do. A warranty helps give you that much-needed confidence and peace of mind you seek when shopping.

A warranty can cover anything from an affordable tool, such as a hammer, to an expensive appliance, like a refrigerator. It provides a safety net that protects you from products that cease to function prematurely. If there were no warranties, you could buy a new smartphone that stopped working in a week — through no fault of your own — and have no recourse.

Since warranties vary from company to company and product to product, they can be a little confusing. Knowing what’s covered, for how long it’s covered and under what specific conditions it’s covered can seem like a game the manufacturer plays to get you to part with your money, but it isn’t. Once you understand how a warranty works, you’ll unlock the secret that gives you the upper hand when shopping: you’ll know exactly what to expect from any product before you buy it.

What is a warranty?

A warranty reveals three important things about a manufacturer: faith in its product, commitment and responsibility. 

Faith in its product

Each warranty covers a product for a specific amount of time. Some warranties can last a year, while others cover the product for a lifetime (or longer). Once the warranty expires, the manufacturer is no longer responsible for any problems that may arise with the product.

Since it’s the manufacturer that determines how long a warranty lasts, a warranty reveals how much faith the manufacturer has in its product. For example, a product that’s advertised as “long-lasting” but only has a 1-year warranty informs the consumer that the manufacturer is only willing to stand behind its product for 365 days. Conversely, a manufacturer that offers a 10-year warranty on the same type of product is confident enough to gamble that nothing will go wrong for at least a decade. In short, the length of a warranty tells the consumer how much faith a manufacturer has in its own product.

Commitment

A warranty is a contract that outlines exactly how far a manufacturer will go to make sure the consumer is happy. It not only details what you should expect from a product, but what the manufacturer is willing to do to ensure you have a positive experience. If there’s a problem, for instance, is the manufacturer offering to solve that problem through a repair, or are they offering a full replacement? Does the manufacturer make sure the consumer has a hassle-free warranty experience, or are there specific procedures that could be potentially frustrating and cause the consumer not to follow through? These are important aspects to understand and consider, as they add value to a product.

Responsibility

This is the part of the warranty that many consumers overlook. It explains who’s responsible when a product fails. Typically, this area outlines ways a consumer could misuse a product that would void the warranty. Did you try to perform an activity that the product was not designed to handle? Did you modify the product in a way that made its performance unreliable? This is the area of the warranty that protects the manufacturer from the consumer, as it details who’s responsible if a product stops functioning in the way it was intended.

Implied vs. express warranty

There are two types of warranties: implied and express.

Implied warranty

An implied warranty is an unspoken, unwritten promise about the state of the product at the time of purchase. This warranty is based on legal precedents set by the courts regarding “fair value for money spent.” It’s created by state law, not the manufacturer.

There are two types of implied warranty that help protect the consumer. The first is the implied warranty of merchantability. This is the merchant’s promise that the product being sold can and will do what it’s advertised to do and there’s nothing significantly wrong with it. A merchant makes this promise at the time of the sale. For example, if you buy a blender, it must be able to puree food into a drinkable texture. If it doesn’t, the law requires a merchant to remedy the situation; the consumer must receive a blender that actually blends.

The second type is the implied warranty of fitness of a product. This warranty involves specific performance. If you ask for a blender that can make a 32-ounce smoothie and the retailer sells you a model that only makes 18-ounce smoothies, it isn’t fit to perform the intended function. This means you won’t be stuck with a model that doesn’t do what you were told it would do — even if in every other way, the blender you bought works fine.

It’s important to understand that implied warranties are only valid at the time of sale and do not guarantee the product will last for a specified length of time.

Implied warranties cover used products as well. When a merchant sells an item that isn’t new, they’re still stating it will work as intended. However, it’s possible for a seller to sidestep this issue by stating in writing that the risk of purchase falls fully on the consumer. This is an “as is” disclosure. It’s intended to be a red flag to the consumer, letting them know they’re waiving their rights by purchasing this product and have limited recourse in the event of dissatisfaction. Even if a product is sold “as is,” the merchant may be liable for any damage or personal injury that results from a consumer using the product.

Express warranty

An express warranty is a promise or statement that the manufacturer makes voluntarily. It isn’t governed by state laws and it has a valid time period that is set by the manufacturer. The express warranty is likely what a consumer means when they talk about a warranty.

Physically, an express warranty is a document that outlines the specifics, obligations and responsibilities of the agreement between the manufacturer and the consumer. These specifics may also take the form of advertising claims, such as whitening strips that will make your teeth “18 levels whiter in just 20 days.”

It’s important to understand that oral warranties are not covered by the Magnuson-Moss Warranty Act — you’re only protected if there’s a written warranty.

The Magnuson-Moss Warranty Act

What is the Magnuson-Moss Warranty Act?

The Magnuson-Moss Warranty Act is a federal law that was passed in 1975. It was written with very specific intentions of protecting the consumer and promoting competition among manufacturers. To understand the scope of this law, it’s essential to examine those intentions.

First and foremost, the Magnuson-Moss Warranty Act is written to give consumers knowledge they can use to make an informed purchasing decision. Before buying an item, a consumer will know exactly what to expect in the unfortunate event that there’s a problem. By making this information available to the shopper, it allows them to compare coverages. Ultimately, this paints a much more vivid picture of the overall consumer experience, ideally leading to greater customer satisfaction.

On the manufacturer’s end, the Act promotes competition based on warranty coverage. It bolsters existing incentives for companies to resolve any disputes or product failures in a timely manner. It also means that warranty coverage can be used as a selling point and leveraged for promotion to give the best products a better chance of rising to the top while alerting consumers to products that might not be as well-made.

What doesn’t the Magnuson-Moss Warranty Act cover?

The Magnuson-Moss Warranty Act has limits. It doesn’t cover every aspect of consumer satisfaction. It’s helpful to understand which areas are not covered by the Act, so you know what to expect.

While an implied warranty comes into play to protect the consumer at the time of the sale, an express written warranty — the only type covered by the Magnuson-Moss Warranty Act — is voluntary. In other words, a manufacturer doesn’t have to offer this type of warranty. However, once a company puts a warranty in writing, it must comply with the Magnuson-Moss Warranty Act.

Another important aspect of this law is it doesn’t apply to service warranties; the Magnuson-Moss Warranty Act only covers goods. The only way this would not be the case is if the manufacturer voluntarily places repair and workmanship in the written warranty. If this is the case, the Act would cover services.

Last, the Act only covers warranties on consumer products. It doesn’t apply to warranties on products that are sold for commercial purposes or resale.

Full vs. limited warranty

Another way the Magnuson-Moss Warranty Act protects consumers is it requires the warranty of every product that costs more than $10 to be designated as either “full” or “limited.” This lets the consumer know, at a glance, what type of warranty they’re getting.

Full warranty

There are five conditions that must be met before a business can declare its warranty a full warranty.

  • The duration of the implied warranty is not limited.
  • The warranty is transferable to anyone who owns the product during the warranty period.
  • The warranty is provided free of charge to the consumer.
  • If the product cannot be repaired after a reasonable number of tries, the consumer has the choice of either getting a replacement or a full refund.
  • To receive service, there is nothing unreasonable required of the consumer — there are no preconditions for receiving service.


If all five conditions are met, the manufacturer can call their warranty a full warranty. Full warranties may give the buyer greater confidence in the product and increase the likelihood of a sale.

Limited warranty

If a manufacturer is only offering a limited warranty, this must be clearly stated. In general, offering a limited warranty lets the consumer know the manufacturer is limiting its responsibilities. Specifically, it means one or more of the five criteria that define a full warranty are not being met. A limited warranty might not be a bad thing, but it does mean the consumer is not getting all the benefits available. For example, a limited warranty may require the consumer to perform certain tasks to activate a warranty. If those tasks are not performed, the consumer might not receive the level of protection they thought they would be getting.

The Federal Trade Commission’s role in warranties

The FTC’s role is to prevent fraud, deception and unfair business practices. Under the Magnuson-Moss Warranty Act, the FTC established three basic requirements regarding warranties. 

  1. The warrantor must designate a written warranty as “full” or “limited.”
  2. The warrantor must state the information covered in the warranty on a single, clear and easy-to-read document.
  3. All warranties must be made available to the consumer before purchase, so they can be reviewed before buying the product.

Warranty vs. guarantee

The difference between a warranty and a guarantee is subtle but important. A warranty details the conditions that explain who is liable for a product’s failure: the consumer or the manufacturer. A guarantee, on the other hand, is a promise that the product will perform as expected and what measures will be taken if it doesn’t. For example, a satisfaction guarantee typically states that if a customer is not satisfied with a product’s performance during a specified period, they can get a refund.

FAQ

Does a product have to have a written warranty?

A. No. A manufacturer does not have to provide a written warranty. This is a completely voluntary act. However, even without a written warranty, the consumer has some protection with an implied warranty.

Does a warranty have to be made available prior to the sale?

A. One of the main points of consumer protection is that an express warranty must be available for the consumer to review before purchasing the product. There are provisions that detail how this must be accomplished in all situations, including door-to-door and mail-order sales.

How long do warranties last?

A. The length of an express warranty varies from manufacturer to manufacturer. To learn its length, you must read the documentation that comes with the product. Additionally, while there is no specified duration for an implied warranty, the consumer has 4 years from the date of purchase to discover and seek a remedy for any problems that were present at the time of sale. This, however, does not mean the product must last for 4 years.

Can there be stipulations to warranties that involve additional costs?

A. In general, a warranty cannot state or imply that the consumer must purchase or use a particular item to keep the warranty coverage. Requiring a consumer to use genuine parts, for example, is prohibited. There is some leniency, however, that allows a manufacturer to include this stipulation if it can be proven to the FTC that the product will not operate as expected without the specified item. It’s also possible for a warrantor to disclaim damage that has been caused by parts or services they did not provide. This could include repairs performed by a non-authorized third party.

How does the Magnuson-Moss Warranty Act help in unresolved warranty problems?

A. The Magnuson-Moss Warranty Act makes a breach of warranty a violation of federal law. It allows consumers to recover court costs and reasonable attorney fees if they win the case. The Act also encourages companies to employ less costly proceedings to reach a satisfactory outcome when the two parties have reached a stalemate.

Can a good warranty boost sales?

A. A good warranty not only boosts sales but can also be leveraged as a promotional tool. Advertising an exceptional warranty can make consumers feel more secure about purchasing a product.

Does a warranty only protect the buyer?

A. No. A warranty also outlines the responsibilities of the consumer. If individuals violate the conditions of the warranty by using the product in ways other than it was intended, it can protect the manufacturer from unfair claims.

Can a warranty save you money?

A. Definitely. A good warranty will decrease the overall cost of ownership for any product. This is because the consumer won’t have to pay for the cost of any repairs that are covered by the warranty. 

Can a warranty be denied?

A. Yes. The terms and conditions are detailed in the warranty. If the consumer violates any of these terms or conditions, the warranty may be denied. This is why it’s essential to read through all warranty documentation.

Is an extended warranty worth it?

A. If you do your research, an extended warranty may be beneficial. However, that’s the exception, not the rule, as extended warranties are not drafted to benefit the consumer. Extended warranties are often pricey, require a very specific course of action (that may be inconvenient for the consumer) and don’t always protect the consumer in the way they think they do. 

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Allen Foster writes for BestReviews. BestReviews has helped millions of consumers simplify their purchasing decisions, saving them time and money.

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