How Brands Can Simplify the Warranty Activation and Product Registration Process

By

Amy Huang

May 27th, 2021

Within virtually every significant area of our lives–health, home, car, travel, hobbies, and more–there is an option for insurance. This insurance serves as a safety net, as a layer of financial protection for when things go wrong. With products, this sense of assurance comes from warranties.

What is the Difference Between a Limited Warranty and an Extended Warranty??

Generally speaking, a warranty is a seller’s promise to the customer that the product works as intended (often called warranty rights). It also outlines the conditions for repair or replacement if the product does not function properly.

When people talk about warranties, they are usually referring to limited warranties, which are also known as manufacturer warranties. These are provided by the manufacturer to the customer at no additional cost, and typically guarantee coverage for one year. As the name suggests, limited warranties come with limitations on specific parts of the product which are covered for repair in the event of a warranty claim.

Extended warranties, on the other hand, extend the expiration date of limited warranties and are frequently offered by a third party at an additional cost. These optional warranties provide more comprehensive coverage.

Why Are Limited Warranties Important??

Limited warranties provide great value to both the seller and consumer. For the consumer, they offer some degree of protection for free, which means savings and peace of mind, especially for expensive products such as tech devices and kitchen appliances. For sellers, offering limited warranties makes a statement–that they care about consumer satisfaction and will support consumers even after the purchase point. Warranty activation also gives retailers access to first-party consumer data, such as their name and email, which provides insight into consumer demographics.

The Federal Trade Commission regulates warranties through the Magnuson-Moss Warranty act. We'll avoid boring you with the details, but there are consumer protection mechanisms built in to make sure warranties are legitimate. Don't think of the MSRP as paying just for a product; some of it, at a certain level, also helps uphold buyers' rights. 

So Why Do Warranties Get Such a Bad Rep??

The barriers are high. In an era where consumer experience is deeply valued, the warranty activation and claims process taints this experience more often than not. The activation process is cumbersome: manufacturers insert product registration cards into the package and rely on the end user to follow arduous directions. Often there are serial numbers to enter, a product model to find, and paragraphs of small type detailing what can void the warranty (and add a few more paragraphs if you're in California, too).

There is usually no apparent reason or incentive for customers to give the card a second look. The claims process is often complicated and requires the consumer to locate their receipt and product information, call a service number, wait for an email, and then wait some more. The process is slow, frustrating, and fraught with convoluted terms and conditions.

And let's not forget the fear of spam. Customers are leery to provide their personal information unnecessarily because of their already full inboxes. To alleviate these issues, the warranty brain trust needs to follow the lead of other steps of the consumer experience and become more customer-centric. With 24% of customers choosing their stores based on the availability of product protection and the willingness of nearly 60% of American consumers to switch to another company after a poor customer experience, it is vital for retailers to make the shift.

Warranties aren't just about financial coverage–or at least they don't have to be.

The Warranty Opportunity Hiding in Plain Sight

While many brands have failed to recognize this potential with respect to customer experience, and have thus contributed to the negative reputation of product registration and warranties, thoughtful marketers and product managers will see this as a green space for building loyalty and competitive differentiation. Warranties aren't just about financial coverage–or at least they don't have to be.

For example, what if registering a product secured a warranty and also easily allowed the customer to reorder replacement parts or additional products? That's a win-win interaction and can deepen brand loyalty right away.

Or what if a product warranty actually unlocked valuable digital content like how-to videos or support communities? Whether it's children's products, fashion, appliances, or really any product category, brands are already creating content and sharing it across social media to inspire post-purchase engagement. Why not connect that content tighter to customers starting right at the unboxing?

Bottom line: a complete warranty registration can, and should, be additive in more ways than just a form of insurance.

Opportunities Ahead

With Brij, brands are able to provide a better warranty experience for their consumers. Brij’s one-touch product registration solution simplifies the warranty activation process: with the scan of a QR code, customers are incentivized to register their product and activate its warranty at the same time. Among other features, warranty activation becomes a more transparent and easily-accessible task. It is clear that warranties provide immense value–the missing part is the bridge between this and the customer.