Whirlpool to Bill Servicers for Out of Warranty Referrals; Customers Expected to See Increased Cost

The Board of Directors of the National Electronics Service Dealers Association (NESDA) has become aware of a new policy that Whirlpool Corporation has implemented within their Independent service network, for those who service and repair Whirlpool major Appliances. Whirlpool Corporation also distributes major appliances under several other brand names.

The policy states that Whirlpool will charge a fee to their Authorized Service Center (ASC) for out of warranty (COD) referrals dispatched through their call center. This referral fee is to be absorbed in the service center’s cost of doing business, which will ultimately raise the price of the repair for Whirlpool COD customers.

Service Centers are accustomed to paying advertising rates or referral fees to those companies who publish a directory or create a presence on the Internet in order to capture potential customers shopping for service. These companies spend many dollars creating a connection between consumers shopping for service and businesses offering those services. This is a service which each service center must evaluate for return, as with any advertising.

Manufacturer referrals are different. Manufacturers of appliances or televisions have traditionally offered rates lower than COD rates to repair their products under manufacture warranty. Service Centers accepted these lower rates in exchange for access to tech support, service literature, steady volume of work and, most importantly, for COD referrals after the manufacturer warranty expires. Our understanding is that the warranty reimbursement rate was not increased in conjunction with the loss of this major benefit (COD referrals) of being manufacturer authorized.

While the immediate impact will be on the ASC and the consumer, we believe the long term impact will be to the manufacturer. Companies spend billions of dollars trying to drive brand loyalty. When the customer calls in to the manufacturer to ask for support or service, they are already disappointed that their product has failed. Most already expect the manufacturer to continue to bear some of the burden of repair when their product fails beyond the warranty. Imagine the reaction if the customer discovers that the brand for which they pledged their loyalty, has inserted a hidden expense in to their service event and the brand will profit from the failure of their product.

NESDA believes that the following is a direct result of this policy:

1. There is the direct added cost to the ASC, and thus the consumer.

2. There is the added administrative burden, and its associated cost, of the ASC providing data to Whirlpool through a dummy warranty claim. They are not paying for data acquisition.

3. There is the added cost to the consumer of using only Whirlpool Certified Parts for repairs where generic parts may be as good and perhaps less expensive. The choice of parts should always be the consumer’s.

4. There will be a point in time when the consumer becomes aware of this. When this happens, between the power of the internet and social media, customer dissatisfaction will occur and ultimately damage the brand loyalty of the manufacturer and the product.

We believe that any manufacturer that administers this policy will create unhappy customers and ultimately affect brand loyalty and future sales. We all know that most happy customers tell but a few people in their lifetime of positive brand or service experiences. Yet, those same customers tell many more people about their negative experiences.

We are happy to report that manufacturers of consumer electronics are not participating in this type of policy. We applaud their wisdom and understanding that, at the end of the day, they will drive loyalty and create more happy customers than their competitors.

For these reasons NESDA is of the opinion that this policy is detrimental to the industry and the consumer.
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NESDA is the premiere association in the consumer electronics service industry, offering the best benefits programs ROI for its members in the product service industry through value-added services that reduce a servicer’s cost of doing business and offer the opportunity to network with other similar businesses, product manufacturers, distributors, and warranty companies.  Additional benefits available to NESDA members include the NESDAnet e-mail list, a listing in the NESDA Servicer Locator at www.TVRepairPros.com, and the opportunity to be a part of the premiere active community of professional servicers highly-recognized throughout the industry.  For more information on NESDA and NESDA membership, visit the NESDA website at http://nesda.com, our Facebook page at https://facebook.com/TVRepairPros, or call the NESDA office at 800/797-9197 ext. 116.

Contact Information

Mack Blakely

Executive Director

National Electronics Service Dealers Association

(1) 817/921-9061

mack@nesda.com