Would you rather have a lower price or longer warranty?
February 20, 2010 6:48 PM Subscribe
Would you rather have a lower price or longer warranty?
I have a friend that sells sunglasses on his web site.. We have been arguing over what people want more, a longer warranty or a lower price..
The warranty is for 3 years and includes replacing them for free (for a small fee) and the sunglasses are $50/pair..
If you had a choice, would you rather have a shorter warranty, 1 year or even less, and get the sunglasses for less money, say $39/pair or would you rather have the extended warranty for the higher price??
I have a friend that sells sunglasses on his web site.. We have been arguing over what people want more, a longer warranty or a lower price..
The warranty is for 3 years and includes replacing them for free (for a small fee) and the sunglasses are $50/pair..
If you had a choice, would you rather have a shorter warranty, 1 year or even less, and get the sunglasses for less money, say $39/pair or would you rather have the extended warranty for the higher price??
If I broke my $50 sunglasses, I'd probably move on to another pair. I can't see me being bothered to send them back for replacements - especially if there is a small fee (plus the cost of shipping them anyway).
Besides, who buys $50 sunglasses and cares about them for 3 years? If the difference is $11, then HELL YES I'd want the lower price. They become effectively disposable after a year or 18 months at that price.
I'd say lower price every time. The number of people that would actually bother with that warranty is teeny, methinks. Nothing longer than a year would interest me for warranty. YOu could probably offer the warranty anyway and not lose money on it due to the low take up rate after a year.
Also: includes replacing them for free (for a small fee) - Free clearly does not mean what you seem to think it does. Free is free, small fee is a small fee.
posted by Brockles at 6:55 PM on February 20, 2010
Besides, who buys $50 sunglasses and cares about them for 3 years? If the difference is $11, then HELL YES I'd want the lower price. They become effectively disposable after a year or 18 months at that price.
I'd say lower price every time. The number of people that would actually bother with that warranty is teeny, methinks. Nothing longer than a year would interest me for warranty. YOu could probably offer the warranty anyway and not lose money on it due to the low take up rate after a year.
Also: includes replacing them for free (for a small fee) - Free clearly does not mean what you seem to think it does. Free is free, small fee is a small fee.
posted by Brockles at 6:55 PM on February 20, 2010
Survey actual customers, or do some informal price testing. I realize that doesn't answer the question directly, but unless your friend is Matt and the sunglasses are special Metafilter sunglasses*, readers here probably don't represent your customer base.
*now in blue, grey and green!
posted by chesty_a_arthur at 6:56 PM on February 20, 2010
*now in blue, grey and green!
posted by chesty_a_arthur at 6:56 PM on February 20, 2010
In general, unless an item is really expensive or I can hardly live without it, I would choose the lower price. If it's a PC or TV, give me the warranty, but if it's sunglasses? Lower price. Most people I know are like this. YMMV.
posted by cmgonzalez at 7:02 PM on February 20, 2010
posted by cmgonzalez at 7:02 PM on February 20, 2010
replacing them for free (for a small fee)
That's not what "free" means. Not at all. And sunglasses: I want 'em cheap, thanks.
posted by chairface at 7:06 PM on February 20, 2010 [4 favorites]
That's not what "free" means. Not at all. And sunglasses: I want 'em cheap, thanks.
posted by chairface at 7:06 PM on February 20, 2010 [4 favorites]
No warranty. These are non-prescription sunglasses? Most people throw out the receipt and never look back for shades that cost $50, I'd imagine. Especially if you bought them online!
I wear prescription sunglasses and they cost a lot more and I still don't think I'd pay extra for a warranty.
That said, I expect it benefits him a great deal to sell this "warranty" as a required add-on since I assume a tiny, tiny, tiny percentage of his customers actually use the warranty. He can justify higher prices with this warranty that most people will likely just ignore anyway.
posted by crinklebat at 7:07 PM on February 20, 2010
I wear prescription sunglasses and they cost a lot more and I still don't think I'd pay extra for a warranty.
That said, I expect it benefits him a great deal to sell this "warranty" as a required add-on since I assume a tiny, tiny, tiny percentage of his customers actually use the warranty. He can justify higher prices with this warranty that most people will likely just ignore anyway.
posted by crinklebat at 7:07 PM on February 20, 2010
Response by poster: I realized I said free and small fee after I posted the question.. I know that those two things are mutually exclusive, just a bad habit I've gotten in to..
Thanks for the answers though, even if this is informal..
posted by SteveG at 7:17 PM on February 20, 2010
Thanks for the answers though, even if this is informal..
posted by SteveG at 7:17 PM on February 20, 2010
Response by poster: I should add that the warranty includes "loss" of the sunglasses..
posted by SteveG at 7:18 PM on February 20, 2010
posted by SteveG at 7:18 PM on February 20, 2010
Best answer: Warranties are a type of risk transfer, i.e. the purchaser transfers the risk of breakage, loss, etc. to the seller. For some things, this makes a lot of sense, e.g. cars, where the risk is real and sizable, but the size of the transaction is such that the purchaser has a reasonable expectation that the goods will be problem free for a while.
But risk transfer is expensive. True, it can wind up saving you money, but like insurance, it's never free. The cheapest way of dealing with risk is to retain it, i.e. to pay for losses yourself. The catch is that losses happen irregularly and can be quite expensive, but insurance premiums are relatively low (in comparison to policy limits) and regular, which is easier to plan around.
Sunglasses are a small enough purchase that it doesn't really make sense to transfer the risk anywhere else. $50? I'll bear the risk of loss myself, tank you, rather than pay you for accepting risk I'm almost certain never to ask you to pay out on.
If we were talking about prescription sunglasses, which can easily run to several hundreds of dollars depending on how you go about it, some sort of warranty and ongoing "support" seems a lot more reasonable. But at $50, they're almost disposable anyways. Getting a new pair every year doesn't strike me as entirely unreasonable, which renders the point of a warranty pretty much zero.
posted by valkyryn at 7:26 PM on February 20, 2010
But risk transfer is expensive. True, it can wind up saving you money, but like insurance, it's never free. The cheapest way of dealing with risk is to retain it, i.e. to pay for losses yourself. The catch is that losses happen irregularly and can be quite expensive, but insurance premiums are relatively low (in comparison to policy limits) and regular, which is easier to plan around.
Sunglasses are a small enough purchase that it doesn't really make sense to transfer the risk anywhere else. $50? I'll bear the risk of loss myself, tank you, rather than pay you for accepting risk I'm almost certain never to ask you to pay out on.
If we were talking about prescription sunglasses, which can easily run to several hundreds of dollars depending on how you go about it, some sort of warranty and ongoing "support" seems a lot more reasonable. But at $50, they're almost disposable anyways. Getting a new pair every year doesn't strike me as entirely unreasonable, which renders the point of a warranty pretty much zero.
posted by valkyryn at 7:26 PM on February 20, 2010
I don't even buy warrantees on electronics, and here's why:
- you have to keep a proof of purchase, and I usually repurpose the box
- you have to keep a receipt, which are usually printed on thermal paper - good luck with that
- you have to ship the product to Parsippany, NJ, whence it will then be shipped to wherever the item will actually be repaired, ie Mars
- after you ship it, at your own expense, to Parsippany/Mars, you will wait 8 weeks for someone to email you that the little pins in the temple are not, in fact, covered under warranty and you will have to send them a postal money order for $27.95
- 8 weeks later your scratched, crooked glasses will be shipped back to you. in the meantime, you have gone blind.
When your watch gets out of order you have a choice of two things to do: throw it in the fire or take it to the watch-tinker. The former is the quickest.
- Following the Equator, Pudd'nhead Wilson's New Calendar
posted by toodleydoodley at 7:59 PM on February 20, 2010 [1 favorite]
- you have to keep a proof of purchase, and I usually repurpose the box
- you have to keep a receipt, which are usually printed on thermal paper - good luck with that
- you have to ship the product to Parsippany, NJ, whence it will then be shipped to wherever the item will actually be repaired, ie Mars
- after you ship it, at your own expense, to Parsippany/Mars, you will wait 8 weeks for someone to email you that the little pins in the temple are not, in fact, covered under warranty and you will have to send them a postal money order for $27.95
- 8 weeks later your scratched, crooked glasses will be shipped back to you. in the meantime, you have gone blind.
When your watch gets out of order you have a choice of two things to do: throw it in the fire or take it to the watch-tinker. The former is the quickest.
- Following the Equator, Pudd'nhead Wilson's New Calendar
posted by toodleydoodley at 7:59 PM on February 20, 2010 [1 favorite]
Best answer: If you're going to emphasize the warranty, the only way I see that as being a real selling point for an item of clothing is if you go the Tilley Hat route. They come with a lifetime warranty, plus if you lose it within the first two years you can replace it for half price plus shipping.
The thing with the Tilley Hat, though, is that they make a big deal out of it being a tough, long-lasting hat for active adventuring types. As with many clothing accessories, you're buying the image along with the hat.
So if you can advertise how tough and rugged they are (and, by implication, how tough and rugged the customer is for buying them), then a lifetime warranty might be a way to underscore that. But an extra two years for an extra eleven bucks? I bet most sunglass purchasers don't even consider that their glasses might have a warranty. I didn't, and mine are prescription.
posted by lore at 8:31 PM on February 20, 2010
The thing with the Tilley Hat, though, is that they make a big deal out of it being a tough, long-lasting hat for active adventuring types. As with many clothing accessories, you're buying the image along with the hat.
So if you can advertise how tough and rugged they are (and, by implication, how tough and rugged the customer is for buying them), then a lifetime warranty might be a way to underscore that. But an extra two years for an extra eleven bucks? I bet most sunglass purchasers don't even consider that their glasses might have a warranty. I didn't, and mine are prescription.
posted by lore at 8:31 PM on February 20, 2010
A warranty for loss??? Please post the website because I need me a pair of those!* Seriously, I would totally pay for that but it seems like an incredibly bad idea business-wise.
*outdoors professional who loses, oh say, 5 or 6 pairs of sunglasses every field season.
posted by fshgrl at 9:49 PM on February 20, 2010
*outdoors professional who loses, oh say, 5 or 6 pairs of sunglasses every field season.
posted by fshgrl at 9:49 PM on February 20, 2010
Another view of warranty issues by small business people offering such, is that generous warranty policies are often great for building word of mouth referrals, and repeat business from customers whose loyalty you've gained through immediate replacement of unsatisfactory goods. To get a chance to turn a soured customer product experience into positive word of mouth advertising, for the low cost of replacing the occasional broken pair of glasses could be pretty cost effective, especially if you can get your upstream vendor's cooperation on replacement of returned/defective items, which is pretty common.
You might, then, also want to offer a "loss replacement" program for an additional $11 at time of sale, but whether you do that or not, my strong suggestion would be to never question or charge for replacement of genuinely defective/broken products, if you expect repeat and referral business from customers, and the power of word of mouth "buzz" to work for you.
posted by paulsc at 1:19 AM on February 21, 2010
You might, then, also want to offer a "loss replacement" program for an additional $11 at time of sale, but whether you do that or not, my strong suggestion would be to never question or charge for replacement of genuinely defective/broken products, if you expect repeat and referral business from customers, and the power of word of mouth "buzz" to work for you.
posted by paulsc at 1:19 AM on February 21, 2010
Warranties are a type of risk transfer, i.e. the purchaser transfers the risk of breakage, loss, etc. to the seller. For some things, this makes a lot of sense, e.g. cars, where the risk is real and sizable, but the size of the transaction is such that the purchaser has a reasonable expectation that the goods will be problem free for a while.
But risk transfer is expensive. True, it can wind up saving you money, but like insurance, it's never free. The cheapest way of dealing with risk is to retain it, i.e. to pay for losses yourself.
Warranties have an additional feature: reducing moral hazard. If I buy a washing machine with a 5 year warranty, the manufacturer can save themselves warranty costs by making sure all its components will last for 5 years; they have an incentive to build to a high standard of quality. For a washing machine with a 6 month warranty, it would be more profitable to cut costs.
So if I'm faced with two washing machines and I don't have information about the build quality of each one, the one that has a longer warranty doesn't just have a longer warranty; it also probably has higher quality components.
posted by Mike1024 at 3:24 AM on February 21, 2010
But risk transfer is expensive. True, it can wind up saving you money, but like insurance, it's never free. The cheapest way of dealing with risk is to retain it, i.e. to pay for losses yourself.
Warranties have an additional feature: reducing moral hazard. If I buy a washing machine with a 5 year warranty, the manufacturer can save themselves warranty costs by making sure all its components will last for 5 years; they have an incentive to build to a high standard of quality. For a washing machine with a 6 month warranty, it would be more profitable to cut costs.
So if I'm faced with two washing machines and I don't have information about the build quality of each one, the one that has a longer warranty doesn't just have a longer warranty; it also probably has higher quality components.
posted by Mike1024 at 3:24 AM on February 21, 2010
As much as I am a fan of warranties, and almost always get them -- On a $50 purchase I don't think I'd be bothered to walk back to the store to claim it. And I'd sure as hell not ship them somewhere (especially if there is a "fee").
posted by weasel at 1:47 PM on February 21, 2010
posted by weasel at 1:47 PM on February 21, 2010
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