Warranty management is a field of professional endeavor that focuses on the effective creation and implementation of warranties for businesses. While this type of work is typically done for companies that manufacture products, any company that offers warranties will typically have an interest in services offered by warranty management professionals or companies. Such work typically governs the establishment of warranties, usually by creating a warranty that instills sufficient product confidence in customers without costing a company too much money, and the resolution of warranty issues. Warranty management can potentially have a tremendous impact on final profits for a company, as improper management may cost businesses a great deal of money.
Proper warranty management for a company typically deals with three major aspects of warranties that a company might offer: creating warranties, fulfilling warranties, and monitoring warranty fulfillment for fraudulent activity. Much like any other aspect of a business, warranty management is primarily concerned with ensuring customer satisfaction while making a profit. Customer satisfaction can be increased by the creation of warranties that provide greater consumer confidence in a product. A customer is typically more likely to buy a product with a warranty that seems fair and indicates to him or her that a company believes the product will continue to function for a good amount of time.
Customer satisfaction is one reason why warranty management can be quite important for a company. On the other hand, the company should try to be sure that the warranty won't ultimately come back to damage its profits. For example, a 90-day replacement warranty could be issued on a product that was not properly tested and ended up having a flaw that caused many of the products sold to stop functioning within 45 days. This would result in the company likely losing money on the product due to numerous replacement orders made through the warranty. Proper warranty management is not only about the language used in a warranty, but also in ensuring the product can live up to the warranty.
Warranty management also typically covers the process of actually fulfilling warranties that are created for a product. This usually means determining how a warranty will be supported by a company. Some warranties may repay a customer the value of the product, while others will send a customer a replacement for a product that fails under warranty. Replacement warranties have become increasingly popular since they ensure the customer continues using the company’s product.
This type of replacement also typically requires that a customer send in the original product. Such steps are an aspect of warranty management that can sustain profits and reduce fraud. A company can ensure the original product was truly faulty in order to avoid fraudulent claims, and can potentially refurbish the product for resale or to use it to fulfill future warranty replacements.