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  • Home / Blog / Ecommerce Returns

eCommerce Warranties: The Ultimate Guide To Managing Them Successfully

01 Feb, 2023 | 7 Min Read
eCommerce Warranties: The Ultimate Guide To Managing Them Successfully

Table of Contents

1) Overview of eCommerce product warranties

Having a strong belief and trust in your goods and services means nothing if the consumers don't believe in your brand. Here comes the introduction of eCommerce product warranties which helps the consumer to believe and generate faith in your brand and the products retailed via it. 

Product warranties have become an extremely important and popular method for eCommerce brands to prove their credibility and the quality of products offered by them. 

What is a product warranty? Product warranties and product protection plans are one and the same thing. They work as a service contract that protects the product from mishandling or certain damages. 

Retailers in markets use product warranties as armor for their business to portray to the customers that they totally believe in their product and literally stand behind in terms of what they sell. 

No doubt warranty programs and policies are a great way to secure customer assurance, but having to deal with customer requests can be a huge challenge for retailers. 

After talking to a bunch of eCommerce retailers and analyzing their complaints and pain points, we have decided to take a step further and educate our readers about the findings. This is why we created this guide to let you know the needful. Read on to get more insight about product warranties.

2) Why have eCommerce Warranties become so popular?

Due to the massive rise in eCommerce consumers, it can be noticed that there’s an increasingly high gravitational pull toward brands providing eCommerce warranties in order to protect sales. 

As per Allied Market Research, the extended eCommerce warranty market is going to blow by the year 2027 with an approximate valuation of $170 billion. And not to forget, those are just extended warranties. With third-party warranties, other repairments, and replacement warranties, the total eCommerce warranty market values much more. 

Retailers are ready to pay much more attention to their warranty workflows because of these three major competitive advancements:-

2.1) Loyal customer base

Warranty programs bring satisfaction to the customers and make them feel secure about their post-purchase experience. Just like any other consumer behavior, the clients need security and ease post making a purchase. 

According to a survey, more than 50% of consumers prefer shopping with brands that offer protection plans post-purchasing. Just by having an impressive product protection plan, there are fair chances that more shoppers might turn into loyal customers.

2.2) Better customer experience

Your customers will naturally feel frustrated with your terms when requesting a warranty would indicate some kind of problem with the product. 

By tweaking and upgrading your policies, you help in easing out your customer’s frustration by proving that you're a responsible retailer and prioritize customer satisfaction. Turning a bad or negative experience into a positive one would really help your brand name grow and achieve happy customers.

2.3) Unbelievable profits

Processing impressive eCommerce warranty returns put back on good terms with your loyal customers. This gives you a chance to introduce your regular product with other products such as new releases or complementary products and attract more potential customers. 

You can use the post-purchase experience of the customers to drive more sales that otherwise wouldn't be made and make your profits skyrocket. 

As an advanced eCommerce retailer, now is the best time to equip yourself with the tools and practices that’ll help you grow your business and understand eCommerce warranty workflows like a pro. Or else, there will be an immense risk of lacking behind while your acquaintances might take the advantage of the opportunity. 

3) Do Warranty Requests impact consumer behavior?

Yes, they do. Many retailers try to dodge or avoid returns and warranties as if it’s some kind of a plague or failure for the business. But the truth is, in order to exemplify your eCommerce venture you have to accept warranty requests as a part of your business journey. 

Instead of avoiding eCommerce warranty requests completely, you must focus on questions like “how to limit the number of requests received?” or “how to manage the warranty requests to grow the business?”

Here are three main reasons why consumers care about eCommerce warranties:

3.1) Lack of Risk taking ability

Online shopping can still be an intimidating task for risk-averse consumers, especially when it comes to expensive products and services. 

According to a survey, back in 2019, it was indicated only 15% of customers feel safe before making an expensive online purchase. That clearly portrays that shoppers need constant assurances before and while making larger online purchases.

This includes good customer support, a guarantee that the product will last, and last but definitely not least, a quick warranty replacement policy.

3.2) Flexible customer service

Beyond the fear of poor services and product failures, customers very much appreciate B2B agreements that allow quick response and flexibility. Rigid and strict B2B contracts and policies can make the customers feel hesitant and prevent them from making purchases. 

Easy cancellation, simple eCommerce warranty request workflows, and quick and transparent communication surrounding the extended warranty - all these elements go a long way in securing customer satisfaction. 

3.3) Quality and protection of the product

Products that are used on a regular basis are high in demand and are vulnerable to everyday wear and tear or mishappenings, like laptops, kitchen appliances, cookware, etc. Customers are more than willing to spend on these items.

But, in return, they also ask for extended eCommerce warranties, product protection, quality checks, and accident insurance. This provides them the confidence to make a huge/expensive purchase and helps them build loyalty toward the brand. 

4) Guidelines to follow when offering an eCommerce Product Warranty

4.1) Follow Magnuson-Moss Act rules

If your business chooses to provide an eCommerce warranty, you need to follow federal laws that are laid out in the Magnuson-Moss Act. As a retailer, you must specify whether the warranty is full or limited, state specified steps and easy-to-understand documents that provide all the warranties-related information. 

Always make sure to include warranties when a customer makes purchases, irrespective of the online or offline medium. To make sure that you’re following all the necessary rules and regulations, you must hire an expert who has a vast knowledge of business laws. 

4.2) Clarify the warranty policies

Be specific while mentioning what the warranty covers and what it doesn't cover. 

For instance, if the product malfunctions, mention clearly whether you’ll pay for the replacement along with the labor charges as well. Do consumers need to contact you for replacements or they can consult any other retailer? Specify every potential query a customer might come up with in the longer run. 

4.3) Mention the length and time of the warranty period

Customers should know exactly how long they have to make a return complaint or ask for a repair. You have to let the consumer know how long you want to be held accountable for their purchase. 

If you sell heavy-duty expensive items that have a longer shelf life, you may want to provide longer warranty periods. Point to remember: The length of your eCommerce warranty time can provide you with a competitive advantage. 

4.4) Extended warranties

If the consumers have a choice and accessibility to extend their eCommerce warranties, they feel more confident and comfortable in spending a large number of finances on your goods and services. 

If you end up providing extended warranties, there is a slight chance that your customers might not avail of the warranty at all, and you’ll end up making more money by selling more products. 

4.5) Department for managing warranty concerns

There should be a dedicated department for managing and entertaining returns, complaints, and replacements of the product. Customers need to be able to contact someone in your company regarding the processing of their complaints. 

It is essential to hire or designate staff regarding this issue to ensure that customers are completely satisfied with their purchase and would surely consider shopping with you in the future as well.

5) What are the benefits of automating your eCommerce warranties workflow?

While providing an impressive eCommerce warranty policy, what you really need to focus on is your warranty workflow. 

Whenever a warranty request is filed by the customer, the company’s management considers it a return. Just like returns, if you start automating your warranties this whole process will start working in your favor rather than becoming an obstacle in your everyday business workflow. 

Here are a few benefits you can get from automating your eCommerce warranty workflow:

5.1) Ensures legitimate warranty requests 

Ecommerce Returns fraud is one of the biggest problems that every eCommerce business has had to face at least once in their business journey. But automating your return applications will allow you to receive proof of purchase from the customer's end, which later simplifies the processing of the warranty.

By initiating an automated warranty workflow, management would easily catch any fraudulent transactions and mitigate the overall loss of resources. 

5.2) Saves time and finances

It takes somewhere around 15 minutes to process a warranty request, costing $3,750 in labor. And this is just the initial pricing! The cost per warranty keeps on growing and gets expensive as you start growing your business. 

That is on top of managing phone calls, e-mails, tracking shipment data, and much more. Doing all this with manual support becomes extremely difficult and a logistical nightmare.

5.3) Better customer experience

Automating your eCommerce warranty workflow ensures quick and hassle-free invoicing to your customers. On top of that, it’ll also notify and equip your service team with the needed information, such as order information, customer’s shipping address, and their history with the company. 

This makes it easier for a customer to shop and be bombarded with zillions of questions. The quick processing with fewer efforts required leaves the customer super satisfied and happy. 

5.4) Marketing strategy

Every time a customer asks for a warranty, it puts you back in contact with them. Automating that entire process will store the customer’s contact details in your CRM, now what you can do is add that customer into your segmented email lists that will allow them to achieve every single information about your brand; your business initiates, deals offers, etc. 

This will help you create a special bond with the customer and every time they’ll think of making a new purchase, your brand will be their priority. 

5.5) Resolves returns faster 

Last but not the least, automating your entire eCommerce warranty workflow will help in resolving every request exponentially quicker. 

An automated system is built in a way to eliminate the long tiring warranty process (phone calls and emails per warranty request) and make the business workflow freed from all such matters. 

When it comes to managing your warranties, automation is your big-time savior.

6) Conclusion

With a vast and saturated market as the eCommerce industry, a customer’s trust can be the biggest competitive advantage. At the end of the day, good and quick eCommerce warranty policies show your customer that you really care about your brand image and customer experience. 

We hope this article helped to understand eCommerce product warranties on a deeper level and amplify your eCommerce business knowledge. 

7) FAQs

7.1) What is the difference between a guarantee and a warranty?

A guarantee is a kind of commitment provided by the manufacturer to the purchaser, whereas, a warranty is an assurance given by the manufacturer to the buyer. A guarantee usually includes the repair or replacement of a damaged product. A warranty usually includes repair but not a replacement.

7.2) Do warranties increase sales?

Yes, offering warranties do boost retail sales as customers feel more confident while purchasing a product. They know that any damage would be covered by the manufacturer within the warranty period.

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