Warranty Woes

In the IT industry, channel partners face multi-ple issues with their
distributors or vendors every now and then and they also resolve the matter
among themselves in the absence of any standard norms in the industry. One such
issue that consistently occurs is the warranty-related problem. Recently, a
channel partner in Allahabad faced a situation where a few of his customers were
denied warranty service on the grounds of difference of warranty standards
between the vendor and distributor. The partner had to finally solve the issue
at his own cost in order to sustain customer loyalty. The issue throws light on
few basic questions-What are the warranty norms in IT market and whether the
standard differs from vendor to vendor? Also what kind of support do channel
partners get from the vendors when the issues are related to warranty standards?

Case study

The website of Creative Technology states, The limited warranty extends only
to the original end-user purchaser and holder of this warranty ('You' or 'Your')
and is not transferable or assignable to any subsequent purchaser. The limited
warranty for the product extends for 12 months from the date of your purchase
('warranty period'). The warranty period will be extended by each day that the
product is out of your possession for repair under this warranty.

However, Cyberstar, the distributor of Creative has circulated a mail among
its channel stating “Moving forward we give strict one year + 20 days warranty
to the party. After this period, dealer needs to give replacement of products to
his customer at his own cost. The choice of doing business with Creative or
Cyberstar is with them but our term of warranty support stands as above w/o any
deviations allowed in future.

In order to sustain a healthy relationship with customers, partners often have to resolve the matter at their own cost if the product is not covered by the warranty scheme

The warranty norms of Creative states that the warranty of the products
starts when it is billed to the end-customer whereas the distributor of the
products has declared the warranty period to be initiated when it is first
supplied to the reseller.

Raman Jain of Micro Computers, one of the resellers of Creative products in
Allahabad mentioned, The website of Creative mentions that warranty period
starts when the product is billed to the end-purchaser. But practically, the
national distributor start implementing the warranty right when it is supplied
to the sub-distributors and resellers. This creates lot of confusion for the
resellers and customers.

Dinesh Kumar of Chandigarh-based OST Electronics shared that for consumables
the warranty begins from the day it is sold to the end-customers. Whereas the
networking companies like Cisco, D-link and 3Com cover warranty period on their
products right from the date it is billed to the distributors.

Sunil Aggarwal of Intra-Tech Computers, a Delhi-based Transcend distributor
stated that Transcend offers lifetime warranty on its USB drives that includes
the timeframe of three years and the partners do not face any service issues

Tug of war

For any warranty issues, customers first approach dealers. In order to
sustain a healthy relationship with customers, the partners have to resolve the
matter at their own cost if the product is not covered by the warranty scheme.
Dealers agreed that ideally, there should be standard warranty norms for IT
products and schemes should be implied after it reaches the end-users. The
channel also accorded that in case of inconvenience, they make efforts to
elevate the issue to the vendor level but most of the times it remains unheard.

In case when the warranty is levied right from the time when the products are
billed to the distributors, it becomes more inconvenient for the resellers to
tackle the end-customers. At times when the stock gets stagnated and the
warranty period is expired, the dealers have to settle the warranty-related
cases on their own once the products are liquidated to the end buyers.

One of the dealers commen-ted, “In channel business we keep on facing such
issues and there is no end to it. For instance, D-Link has mentioned that it
offers lifetime warranty on the packing of its product but in the manual it is
mentioned only for one year. So such confusions keep on prevailing in the
market, and neither vendor nor distributors take responsibilities to resolve
such issues.” Keeping in mind the convenience factor for partners LG has set-up
a call center and customers need to directly call and register their warranty
claims.R Manikandan, GM-Sales and IT Products, LG Electronics India shared, LG
has designed its warranty policy in such a way that partners are eliminated from
bearing the post-sale pressure. Customers have to directly contact the call
center and claim their warranty.Nagpur-based Vidharbha Computer Manufacturers
and Dealers Welfare Association (VCMDWA) has formed a member redressal forum
that takes care of all the issues that channel face with the distributors and
vendors and vice-a-versa.

“Partners keep on facing various issues that includes warranty also. There
are times when partners do not get support either from vendors or distributors.
Therefore we have formed a group that is dedicated to resolving the issue and
this has been very helpful in providing support to channel,” said, Vinod Verma,
President, VCMDWA.

Distributor speak

A representative of Compuage, distributor of Creative in Lucknow shared that
the warranty policy of Creative states that warranty period begins when the
products are shipped to the sub-distributors in the first place itself. “If any
case arises that creates problem for the reseller then we move ahead to render
all possible support to them. It could become difficult for a reseller when the
stock is not moving but in that case we escalate the problem to the vendor.
Moreover, it becomes a case to case matter and the dealer-distributor relation
plays a vital role in sorting out the problem,” he said.

Different warranty, different norms

Distributors informed that the warranty-related norms and policies differ
from vendor to vendor and they have their own methods to resolve the issues that
arise. The decision of formatting warranty policies lies only the hands of the
principal companies and distributor do not play any role in designing them.A
D-Link executive informed that the vendor normally takes care of distributors
who face any issue out of warranty problems. “In case the stock is not moving,
we ask our distributors to inform us. We can take action to liquidate the stock.
We generate demand for such products in the market or replace them. Therefore,
distributors take care of the warranty issues. They have to further handle the
dealers at their own end,” he shared.

Amrita Tejasvi

amritat@cybermedia.co.in