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Maximizing Your Warranty Claims: Tips to Increase Profitability

As a shop owner or service technician, you’re probably no stranger to the word “warranty.” But unfortunately, the mere mention of it often elicits a negative response. It’s common to hear things like, “warranty doesn’t pay” or “we’re getting ripped off on this warranty claim.” But is it really the warranty that’s the problem, or is it the way we handle the claims?

Warranty claims can be a source of frustration and confusion for both service personnel and customers. However, there are steps you can take to maximize the bottom line on your claims and ensure a positive outcome for everyone involved.

One of the most important things to keep in mind when preparing and submitting a warranty claim is to provide detailed and comprehensive documentation. This includes everything from the initial customer complaint to the final repair details. As a firm believer that your pen is the most important tool in your toolbox, I can’t stress enough the importance of clear and concise tech notes.

When processing warranty claims, one of the most common problems I encountered was a lack of supporting documentation to submit with the claim. Technicians and advisors were expected to have the complaint, cause, and correction clearly documented on the back of the repair order. Unfortunately, I often saw vague and incomplete notes such as “Alternator is bad. Replaced Alternator. Repair Complete.” This kind of claim is likely to be sent right back to you and rejected if submitted in such a way.

To avoid rejected claims and maximize your profit, it’s crucial to follow a clear and comprehensive outline for your tech notes.

For the complaint, include every single detail your customer communicated to you, such as descriptions of sounds and vibrations, when and where the problem occurs, and any other relevant information. Go the extra mile and have an advisor go for an initial road test to help document the concern.

For the cause, be sure to document how you diagnosed the problem, how long it took, and what diagnostic equipment you used. Print out wiring diagrams and highlight the circuits you tested. Take pictures of any damage and provide data that you captured during the diagnostic process, such as a vehicle scan report. If you have clean, direct evidence of why the component or circuit failed, your claim is much more likely to be paid.

Finally, for the correction, document everything you did to repair the vehicle, including any additional steps you had to take beyond what the service information provided. Take pictures of the final result to cover your bases, and make sure your tech notes are legible so they can be easily scanned in for processing.

Another important factor in maximizing your warranty claims is finding the correct labor operations for your claim and ensuring you’re not leaving anything behind. Begin by accounting for your diagnostic time, and be sure to use as much documentation as possible to justify it. Next, find your primary labor operation, but don’t stop there. Think about any additional tasks you had to do to complete the job, such as fabricating parts or extracting difficult bolts. Be sure to include any related labor operations to add to your claim time. Don’t forget about software updates, as these usually have labor operations as well.

By following these tips and taking a positive attitude toward warranty claims, you can turn what was once a source of frustration into an opportunity for increased profit and customer satisfaction. So, tune out the negativity and concentrate on mastering your claims process – your bottom line will thank you for it!

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