{"id":2035,"date":"2022-03-08T12:36:06","date_gmt":"2022-03-08T18:36:06","guid":{"rendered":"https:\/\/iowappa.com\/?p=2035"},"modified":"2022-03-08T12:37:25","modified_gmt":"2022-03-08T18:37:25","slug":"2035","status":"publish","type":"post","link":"https:\/\/iowappa.com\/?p=2035","title":{"rendered":"Profit Guaranteed"},"content":{"rendered":"

\"\"<\/a>A few years ago, my 1998 Ford Explorer stalled in traffic.\u00a0 I had it towed to my mechanic\u2019s shop and called my mechanic to let him know it was coming.\u00a0 As soon as he could get the vehicle in to look at it, he told me that it needed a new alternator.\u00a0 I was expecting that.\u00a0 What I didn\u2019t expect was the price he quoted.\u00a0 His price for labor was not the surprise, but the cost of the rebuilt alternator was shocking.<\/p>\n

I had already looked online to check out the price of alternators so that I could know how much repairs might cost.\u00a0 A 1998 SUV with 260,000 miles requires research to determine if I want to repair the auto or have it junked.\u00a0 The price of a rebuilt alternator quoted by my mechanic was almost twice what I saw online for the same part.\u00a0 We had a discussion.<\/p>\n

He told me that the price was more than I had expected because he places a warranty on all parts and service.\u00a0 If I wanted to install it myself, he had no problem with that, but he would not sell or replace a part without the warranty.\u00a0 Back in the 1970s I replaced a starter on a 1958 Ford station wagon.\u00a0 It had a V-8 engine and I had to either drop the suspension or lift the engine off its mounts to install the new starter.\u00a0 Okay, maybe it wasn\u2019t that bad, but it was a horrible event \u2013 it took me days to replace that starter.\u00a0 I like Fords (See The Green Latrine<\/em><\/a>), but my experience with self-maintenance on the make is not pleasurable.\u00a0 I paid the mechanic\u2019s price.<\/p>\n

We needed some plumbing work done recently.\u00a0 Estimates were probably six times more than what I thought I was going to have to pay.\u00a0 All estimates included labor, parts, and warranty.\u00a0 \u201cCan you break it down?\u201d\u00a0 Short answer, \u201cNo.\u201d\u00a0 \u201cWhat if I don\u2019t want the warranty?\u201d\u00a0 The answer is always the same.\u00a0 \u201cIt\u2019s in our policy.\u00a0 You have to receive the benefit of our warranty.\u201d\u00a0 Isn\u2019t that nice!\u00a0 To me, benefit would mean that my parts and service are guaranteed, and I shouldn\u2019t have to pay for the company\u2019s screw up or faulty parts.\u00a0 That\u2019s not how it works in today\u2019s world of business.<\/p>\n

The practice of including warranties in the price of a part, product, or service is becoming more of the norm.\u00a0 Wouldn\u2019t it be nice to know how much that warranty costs the company providing the service?\u00a0 Try to obtain a breakdown of 1) parts; 2) labor; and 3) warranty sometime.\u00a0 You won\u2019t get it.\u00a0 Worse, that warranty comes with a sales tax.\u00a0 However, the good news, you are told, is that the warranty is free.\u00a0 Huh?<\/p>\n

The windfall of money not spent on warranties after the warranty period expires becomes income for the seller or service.\u00a0 There must be a better way of reporting to customers than the present procedures.\u00a0 There are statutory laws covering warranties (no pun intended), and there is a \u201cFinancial Accounting Standards Board (FASB)<\/a>\u00a0that regulates business finances. For example, the FASB requires warranty issuers to provide financial reports to customers. In particular, warranty issuers must disclose:<\/p>\n

    \n
  1. \n
      \n
    1. their method for establishing liability for product failures<\/li>\n
    2. their financial accounting for each reporting period including their:\n
        \n
      1. starting balance<\/li>\n
      2. subtractions for warranty payouts<\/li>\n
      3. increases from newly issued and pre-existing warranties and<\/li>\n
      4. ending balance\u201d<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

        I could have asked about this information, but what do you do when you are in dire need of a part to get your vehicle back on the road, or your furnace blows up in your face and you need to replace it?\u00a0 Besides, I\u2019m sure the information on a financial report is filled with lots of actuarial goobligock making it difficult to understand.<\/p>\n

        I could have made a complaint to the Better Business Bureau, or the Consumer Protection Office of the Iowa Attorney General.\u00a0 I could have developed legislation that would address the problem I have with businesses that tack on mandatory warranties[1]<\/a>.\u00a0 I doubt I could get it introduced, much less get it enacted.<\/p>\n

        As I have purchased items in the past where the clerk smiles and says \u201cthis product comes with an extended warranty for five years that costs only . . .\u201d\u00a0 That\u2019s as far as I let them get with the offer.\u00a0 My answer is always \u2018no.\u2019\u00a0 Does the manufacturer believe the product is that bad that it must offer a warranty beyond the one provided?<\/p>\n

        Let\u2019s get real, I guess I just wanted to bitch about this.\u00a0 Nothing\u2019s going to get better for the consumer in this area of business law.<\/p>\n

        [1]<\/a> \u00a0\u00a0A\u00a0mandatory warranty<\/em>\u00a0or maintenance agreement is a contract that comes with a product and is included in the total selling price. Under a mandatory warranty, your customer does not have the option to purchase the product without the warranty. Examples include standard manufacturers’ warranties that come with new vehicles, computers, electronic devices, appliances, and auto repair shops’ parts-and-labor warranties on repairs.<\/p>\n

         <\/p>\n","protected":false},"excerpt":{"rendered":"

        A few years ago, my 1998 Ford Explorer stalled in traffic.\u00a0 I had it towed to my mechanic\u2019s shop and called my mechanic to let him know it was coming.\u00a0 As soon as he could get the vehicle in to … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[264],"tags":[953,952],"class_list":["post-2035","post","type-post","status-publish","format-standard","hentry","category-fairness","tag-financial-accounting-standards-board-fasb","tag-warranties"],"_links":{"self":[{"href":"https:\/\/iowappa.com\/index.php?rest_route=\/wp\/v2\/posts\/2035","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/iowappa.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/iowappa.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/iowappa.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/iowappa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2035"}],"version-history":[{"count":3,"href":"https:\/\/iowappa.com\/index.php?rest_route=\/wp\/v2\/posts\/2035\/revisions"}],"predecessor-version":[{"id":2038,"href":"https:\/\/iowappa.com\/index.php?rest_route=\/wp\/v2\/posts\/2035\/revisions\/2038"}],"wp:attachment":[{"href":"https:\/\/iowappa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/iowappa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/iowappa.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}