Warranties: Used as a Marketing Tool


When I was 17 years old, I was dating a girl, named Kay. Her father, George, was managing a muffler shop that sold a well-known brand. The company advertised on TV and promised a lifetime warranty for their mufflers.

Back then, for most jobs I had as a teenager, I was paid the minimum wage of one dollar an hour. Most of my jobs were warehouse positions or I worked as an auto mechanic in a gas station as well as pumping gas. I was very happy to make $1 per hour.

One day when I was visiting Kay at her house her dad said he could use my help. He knew I was a pretty good mechanic and that I knew my way around a toolbox. George told me that one of his employees had to take a day off during the next week and asked if I would work as an installer for that one day. Then he told me, he would pay $10 for an 8-hour shift. That amounted to $1.25 an hour, more than I had ever been paid before; it didn’t take me long to say yes. Of course, I was also wanting to make points with my girlfriend’s father

I spent almost half of my day assisting in installing new mufflers on cars for the first time. A new muffler back then cost $10 with free installation. The car owners really liked the idea that if the muffler went bad, they would get a new one “free.” Before lunch I must have helped install new mufflers on 5 or 6 cars. We raised the cars up on a lift so we could get under a car while standing up. The shop had two lifts allowing two mufflers to be installed at a time. Most of what I did was hold up one end of a tailpipe or muffler while a higher paid mechanic attached clamps to the items.

Shortly after the lunch break, an older man drove into the shop in a Ford Model A. It was clear that the old car needed a new muffler. The driver got out of his car with a fancy looking certificate in his hand. He said, “I have my lifetime warranty here and I want a new muffler for free.” The customer was told that the new muffler was free but that he had to pay for the labor to install the “free” muffler. The labor charge would be $10, but the muffler was "free". The old man told me he had bought the car new and he loved the lifetime guarantee, he was about to have the 4th "free" muffler installed. His car was old enough that when he drove away from the shop, his car had its 5th muffler quieting the sound of the engine exhaust. It seemed as if the old man just didn’t get what happened when he got a “free” muffler.

This was the first time I had seen the marketing ploy of the “lifetime warranty” up close. But it wouldn’t be the last. The next time I saw a similar situation was when I was in my 20s. I was at a Sears store to buy a set of tires. While new tires were being installed on my car, I was in the waiting room sitting next to the open door to the Manager’s office. A woman entered the office and told the manager that she wanted a set of shock-absorbers (shocks) replaced under warranty.

At this time, shocks were sold in pairs, front shocks and back shocks. The price at the time was about $12 a pair with free installation. I think that you know where this story is going, but hang on, there is an interesting twist to the story.

The manager assured the woman that the warranty would be honored. After all, the shocks had been purchased only a month before. The woman was informed that the shocks were "free", but she would have to pay for the labor to install the new replacements. I’m sure it has been figured out that the labor charge would be $12 per pair. The woman paid the labor charge and left happy because she got new shocks for “free".

I was still waiting for my car when the mechanic who had replaced the shocks came into the office. He told the manager that the woman told him her teenage son had installed the shocks at home. So, this means that when the shocks were purchased the woman didn’t even get the benefit of “free” installation. The real kicker is that the mechanic told his boss that the woman’s son had installed the shocks upside-down. No wonder the shocks didn’t work.

In both cases, using a warranty as a marketing tool made for happy customers.



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