Business

Mitch Lipka | consumer alert

Warranty fees are the new normal in product coverage

Q. I am writing to you with an issue that I think borders on fraud. My water heater broke in late February while still under warranty. I supplied the necessary documentation and picked up a new water heater but was charged a $100 warranty processing fee. I believed when I bought the water heater the price covered the cost of a replacement under warranty. I asked the manufacturer and supplier for my $100 back, but they both refused, apologizing that the warranty does not cover processing charges. Short of filing a complaint with the attorney general’s office or taking them to small claims court, is there anything that you can suggest?

Guive Mirfendereski, Newton

A. The “warranty processing fee” might seem shady, but it is legal. In fact, the warranty actually spells out that such a fee can be charged.

That doesn’t mean you have to like it or that it’s right. After all, isn’t a warranty supposed to be a form of insurance to give a consumer peace of mind when buying a product, particularly a costly product?

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A few years ago such charges were unheard of, but now it’s fairly common to see warranties with provisions that allow that allow manufacturers to impose the fees. These provisions, however, rarely specify the amount, giving companies wide latitude to set a number that allows them to recover some of the expense of the new unit.

It’s not quite as openly punitive as the “restocking fee” that some appliance and electronics stores charge when consumers return items, but it’s still pretty unfair. A few warranties are specific, and include what you’ll be charged if you need a replacement or replacement part.

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For the most part, product guarantees have disappeared and yielded to weaker and weaker warranties. This is just the latest example of companies watering them down. If there is a bright side, the $100 was a lot less than it would have cost to replace a water heater, and plenty of warranties have far more onerous terms.

Mitch Lipka can be reached at consumernews@aol.com. Follow him on Twitter @mitchlipka.
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