E-tailers Team with Extended Warranty Companies

Many e-tailers across the industry are growing concerned that would-be buyers of high-tech and high-ticket items are backing away from online purchases because of concerns about follow-up service and a lack of long-term warranties.

In response, a number of online companies are devoting their efforts to selling and managing extended warranties on all types of purchases, from wristwatches to dishwashers. The new companies, essentially, are operating as middlemen between the e-tailer and the customer.

For the customer, the service offers security and encouragement to make major purchases online, while the e-tailer is freed from the mammoth job of managing warranty data.

Seamless Interfaces from E-tailer to Warranty Sites

San-Francisco, California-based WarrantyNow.com offers e-tailers the same advantages that traditional retailers have had, including processing of warranty claims, service center locators, manufacturer warranty information, and customer warranty tracking.

Most important for both e-tailer and customer is WarrantyNow’s ability to customize an e-tailer’s shopping cart, so that the customer can purchase the desired item and buy an extended warranty all in one visit to the e-tailer’s site. The customer simply selects the item to be purchased, and follows up by choosing the desired warranty protection.

Without knowing it, the customer seamlessly taps into WarrantyNow’s servers. WarrantyNow then forwards the information to a third-party warranty service provider and keeps a record of it on its site.

Customers who need to check their warranty information later can simply go to WarrantyNow.com, enter a password-protected area of the site, and see the log of the item purchased and its warranty. If there is a problem with the item, the customer can select an authorized service center from a listing that is available at WarrantyNow.com.

Empowering the Consumer

Revbox.com, another online warranty service company, offers a product management tool — called myrevbox — that allows customers to access information that is relevant to taking care of the purchased item throughout its life.

By using the tool, a Revbox member has access to such information as purchase receipt, extended service plans, product pictures, descriptions, specifications, and manufacturer information, as well as a direct link to the manufacturers.

Manufacturers often become indirect beneficiaries of these systems. WarrantyNet.com, a service with offices in Boston, Massachusetts and Ottawa, Canada, claims to enable e-tailers and manufacturers to follow product repair trends and conduct both market analyses and customer demographics studies, all of which help to streamline future marketing and sales efforts.

The site also says it helps with the prevention of fraud associated with bogus warranty claims. Reductions in claims paid should conceivably translate into better pricing and warranty terms for buyers.

Creative Online Warranty Terms

In an effort to encourage online buying and boost consumer confidence, e-tailers and warranty companies are also offering creative perks and incentives. How2.com, a Dallas, Texas-based company that covers major appliances, offers such coverage as $100 (US$) food spoilage protection on refrigerators, and icemaker coverage. It also touts annual VCR and camcorder head-cleaning coverage, and even coverage for remote controls.

WarrantyNet features a reverse auction that offers consumers the ability to receive competitive bids for extended warranties. Most significantly, How2.com emphasizes a phrase that any online buyer likes to hear: “If we can’t fix it, we’ll replace it — free.”