Sometimes, a single sentence can say as much as a thousand words…
“In a survey of its full-service suppliers, AASA found that warranty returns in the aftermarket account for nearly $3.50 billion in lost revenue to those suppliers and 97.5 percent of all warranty credit is preventable.”
That was the topic tackled at one of the AAPEX Learning Forum events back in early November, an expert panel representing all levels of the distribution channel discussing the critical issue of reducing preventable warranty returns. And the panel, moderated by Bill Hanvey, AASA vice president of programs and member services, was challenged to look at the subject of warranties without the normal assumption that warranty returns are just a necessary evil – a general cost of doing business in the independent automotive aftermarket.
Though a common practice in our industry for as long as most of us can remember, it is vital to remember the cost of warranty returns – the cost to all channel partners in the chain – is one that could be moved from the expense side of the ledger and blended into the profit side, particularly for those on the supply side of the business. And the supplier representative on the panel – Brian Altenberger, director of fuel delivery systems for Delphi Automotive – was quick to point out the commitment most suppliers have put forth toward providing application-specific directions (including videos) for installation of many complex components, and said suppliers certainly hope those provided tools are used effectively by distributors and especially technicians. He and other panel members also noted that the supplier loses twice in the warranty return scenario: once, when incurring the expense of training and supporting materials, and again, when paying the credit on the returned part — a part that may not have even been paid for yet.
The problem can be attacked with data analysis as well, according to Mario Recchia, senior vice president of WORLDPAC, another panel member who noted that analyzing warranty return data is important in identifying those accounts or product categories that have high warranty rates, and focusing efforts where the problem may be easily identifiable.
At the shop level, and echoed by the suppliers, training is the key. Mitch Schneider, owner of Schneider Automotive in Simi, CA, said it is a matter of shop owners mandating a set quota of training time to reduce wasted labor time as well as eliminating comebacks in the first place. The shop loses billable labor and bay time when a job comes back, not withstanding the negative impact on customer confidence and a shop’s reputation – something our industry as a whole suffers from every time a consumer tells his tale of woe to friends, family, colleagues and coworkers.
This is certainly a complex issue but one that requires the attention of our industry — attention from all levels of the channel and collaboration from all those channel partners throughout the system. There is word that a warranty return task force may be coming in the near future – an effort being put forth by AASA and some of its members.
There has been much in the way of discussion concerning this issue over the years, but now is the time for some real action. This is a challenge that can be met, and it will pay dividends to all those along the channel, including the most important member of the industry: the consumer.
Gary A. Molinaro
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