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OEMs Need to Focus on Training, Reporting to Fight Warranty Service Abuse

As electronics OEMs focus on creating and supporting products and delivering a strong customer experience, the supply chain naturally extends to supporting products through support and end of life. As they focus on this type of service, OEMs must do what they can to reduce service and warranty abuse.

Alliance for Gray Market and Counterfeit Abatement (AGMA), a non-profit technology consortium, has identified best practices to help organizations protect their intellectual property (IP) and service/warranty efforts. Service abuse can lead to billions in lost revenues, as well as eroding customer confidence and corporate reputation, AGMA said. The best path forward to helping stem the tide of abuse is by giving employees knowledge and tools to manage issues.

 “It’s often said that the best defense is a good offense, and that is especially true when it comes to combating service and warranty abuse,” noted AGMA president Sally Nguyen. “Companies that address these issues can generate enormous savings and create long-term value for their organizations, their investors and their customers, without compromising customer service and satisfaction.”

OEMs should raise awareness of the signs of warranty fraud both with internal employees and its channel partners.  AGMA suggests that all new hires are trained in the first three months of employment and that all employees also have an annual update and refresher training. “Because the content of these sessions can become obsolete quickly, any training sessions that have dated content should be refreshed and updated to reflect current policies,” the AGMA said.

In addition, OEMs can leverage big data analytics to more readily spot fraud attempts. “By capturing data related to services and warranties and analyzing it against relevant metrics (such as countries of origin, expected number of replacement parts, etc.), red flags can be revealed,” the AGMA said.  “Any anomalies found can trigger further questioning and spur investigations that take a deeper look into channel partners or resellers that regularly display such inconsistencies.”

The second step is for organizations to create clear reporting mechanisms that can be used anonymously. For example, OEMs can create a generic internal email address which can be routed to the appropriate department or a company portal to lead someone through the reporting path.  “In order to foster an environment that encourages people to come forward, they must be made to feel comfortable in reporting what was seen,” the AGMA said.

Take a look at the infographic below from AGMA that outlines some of the common ways warranty abuse occurs. 

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

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