The new Canon Warranty Expectations Survey 2019 reveals what we all know. That those statutory 12-month warranties are way below consumer expectations.
Before we get into the Canon Warranty Expectations Survey 2019 results, let’s look briefly at the Australian Consumer Laws (ACL).
Why? Because the Canon Warranty Expectations Survey 2019 reveals that most Aussies don’t know their rights under ACL anyway.
A warranty or guarantee is representation to a consumer that if the goods or services (generally below $40,000) are defective, the business will:
- repair or replace goods (or part of them)
- resupply or fix a problem with services (or part of them)
- provide compensation to the consumer.
The consumer has the right to demand a refund if repair or replacement is not their preferred option, e.g. it does not meet advertised performance standards or there is a major problem with the goods.
The other thing consumers are unaware of is that guarantee periods must be relevant to the reasonable expected life of the item. For example, a sub-$100 printer is not expected to last five years, whereas a $1000 printer would be.
Back to Canon Warranty Expectations Survey 2019
Spoiler alert – we are being brainwashed to accept short warranties
Case in point. A major phone maker argued with the ACCC that consumers have no right to expect longer than 12-month warranties. Why? Because a phone is a consumable item – changed every year or so.
Canon calls this ‘Transient Goods Culture’.
Japan used to have an annual ‘Dai Gomi’ day where the culture mandated older consumer goods were put in the street for collection and new goods bought to replace them. Ironically Canon’s (a Japanese company) term describes just that! Japan is now a leader in recycling.
The consumer electronics industry has worked so hard to create perceptions to condition consumers into believing technology is advancing so fast that hardware only needs to last one or two years until the next model is available. In China now, smartphone makers are releasing new models on six-monthly cycles!
The ACCC responded that it expects a consumer is entitled to all warranty remedies within the ‘reasonable life’ of a product. For example, a $2000 smartphone could reasonably be expected to last five years.
Canon Warranty Expectations Survey 2019 found
- 87% of Australian consumers are now brainwashed to accept the ‘Transient Goods Culture’. They must update to new models every 1-2 years even though the current product performs perfectly for several more years.
In comparing consumer expectations to warranty length, the survey reveals a huge ‘perception’ gap for common consumer electronics goods (like mobile phones and digital cameras).
- For a mobile phone ($1,000-3,000), consumers expect at least a 2.4-year warranty (average). Apple is a prime example offering only a 1-year limited warranty whereas most major brands now offer two years.
- 86% of millennials are happy with a shorter warranty. Evidence that the ‘Transient Goods’ mindset is taking hold in younger ‘digital native’ generations
- 32% of Baby Boomers realistically expect a warranty 4-years or more for significant investments – more realistic
Canon also found that many consumers fail to take the value of longer warranties into account
Australian consumers have been conditioned to expect shorter warranties even for products costing on average $3,500 ($2,000-$5,000 range). This includes refrigerators and TVs, both of which consumers say in a Choice survey that they expect to last between 6-11 years.
By offering short warranty periods, consumer electronic brands are not demonstrating confidence in the quality of their products by matching warranty to the length of time consumers expect to own the product for.
The Canon Warranty Expectations Survey 2019 also revealed some interesting stats
- 84% state that when choosing a product if price and specifications were similar between two brands, they would choose the product with a longer warranty.
- 87% state that brands offering warranty longer than those of its competitors are more trustworthy.
- 89% consider longer than average warranty periods proof that a brand is confident in the quality of its products.
- 87% state that a longer warranty means higher product quality.
What is Canon doing with this information?
From today (25 November) Canon will offer a new five-year warranty for it’s Mirrorless, DSLR, Digital Video Camera and Lens ranges.
It already offers similar warranties on its commercial printer products.
Jason McLean, Director – Consumer Imaging, Canon Australia said,
Canon’s new five-year camera warranty meets Australian consumers’ expectations for longer warranties to apply to higher-end products. It is time for the consumer electronics industry to modernise its warranties to reflect consumer expectations of quality, trust and value.”
GadgetGuy’s take – Canon Warranty Expectations Survey 2019 is the tip of the iceberg
We are long term supporters of the ACCC’s hard-fought and comprehensive Australian Consumer Laws. We are also long-term advocates of buying genuine Australian product with Australian warranty. And let’s not get into the right to repair issues that we all should expect government legislation to mandate.
There are so many issues with warranty lets pick just a few.
A longer warranty reinforces perceptions of brand quality – definitely
Remember back when cars had a 12-months warranty? I notice now Jeep offering 5-years warranty to counter public perceptions of the reliability issues that plagued it. Sales are on the accent again.
Seagate upped its data centre drive warranty to five years. This led to a 24% increase in sales and a corresponding decrease in competitor sales (still offering only a one year warranty). Even when competitors matched that, Seagate remained well ahead.
But longer warranty means keeping more substantial warranty fund reserves and parts – so true
Warranty length in the consumer electronics industry reflects many things. The failure rate over time; the ability to keep enough spare parts for the warranty period; repairability ease/cost; and most importantly – the dollar reserves that the company has to hold to cover claims.
Take Apple as an example. According to Warranty Week, its quarterly warranty claims are about US$1 billion on annual sales of about $250 billion (about 2%). For a twelve-month warranty, it has to hold reserves and parts of about $4 billion. Imagine what would happen if it had to offer a 24-months warranty and if failure rates increased over that time to 4%?
Apple counters warranty and liability to an extent by selling Apple Care+. The ACCC says is not worth the paper it is written on.
Grey market – not my problem in my back yard
One of the most significant issues that major brands face is the grey market and parallel import of products like phones and consumer electronics where the online merchant – not the manufacturer – offers the warranty.
As many of these resellers are offshore, the warranty is not worth the paper it is written on. If you buy grey market don’t expect repairs!
Counterfeit and fakes
And then there is a massive counterfeit and fake market that purports to be a brand product – usually failing and sullying the real manufacturer’s reputation.
And watch out for fake websites that can steal your ID and empty your bank account – Shop local!
Caveat emptor – buyer beware – if the price is too good to be true it probably is – has never been more of an issue, especially at those Black Friday, Cyber Monday, Click frenzy times where all buyers look at is price first – Have I got a deal for you!