Poor service gives warranties a bad name, says NWS

"Because the level of service is so poor, they tar us with the same brush," said Card.

Common complaints are voiding warranties which aren't registered, long wait times and problems with approved parts. If you're dealing with a properly run company warranties are a good benefit - for customers in terms of service, and another source of profit for resellers, said Card.

Warranty companies will find it hard to shake the poor reputation "as long as they believe in a business model that's burn and churn," said Card. National Warranty Services claimed it has never lost a reseller because of poor service, and it is looking for repeat business, said Card.

The Queensland-based company is readying plans to expand into the US and UK using its custom-designed online warranty system.

Instead of mailing out certificates and stickers, resellers log onto NWS's Instant Warranty Delivery System (IDS), enter the customers' details and print out a personalised sticker. Warranties are registered instantly.

Card says the online system can sell and deliver anywhere in the world, "but I think we'll stick to English speaking countries". The company currently operates in Australia and New Zealand.
NWS sends resellers marketing and POS material which explain the benefits, including instant parts replacement and same-day/next-day service.

Under NWS' system, resellers are paid a mark-up on every warranty they sell, and then are paid to carry out warranty work on returned items. "We pay them to do their own warranty work" rather than resellers having to do repairs at their own cost on return to base, said Card.

The online system lets resellers sell as many warranties as they need and pay at the end of the month, said Card.

The company has 3700 service agents, but not all are buying warranties. Card ranks the warranty supplier at number two in the local market, and said the company would be number one if it could find enough business development managers.

"There's a lot of potential out there," said Card. "If they make decent systems, we want their business. If they make crappy systems, then we don't want their business. It doesn't mean they have to be big, they just have to be good."

What is your experience with warranties? Do you think that third-party warranties are useful? Do you think the quality of warranty services in Australia could be improved?