The true test of a shop leader doesn’t happen when operations are running smoothly. The processes and experience gained over the years are put to the test when something goes wrong.
For a quick lube shop, that can be in the form of a customer warranty claim. With each case, your entire operation comes under review—the services performed, the customer service provided, and the financial implications of a serious claim.
For an operator who has processes in place and a cool head, a warranty claim can provide an opportunity to build a long-term customer relationship. An operator who reacts harshly will certainly lose a customer, and perhaps the funds that go along with settling a claim.
It’s important to get to the bottom of every case, especially when mistakes are made.
“Most warranty claims that our businesses are paying are generally things that you actually did wrong,” says Adam Tatum, director of Operations at Virginia Group and NOLN columnist. “There are very few warranty things that are parts failures.”
That realization should help operators and their teams remember to take a pause as they respond to warranty claims. Go through the process and help the customer and your shop toward the best outcome.
Whether it’s a big claim or a small warranty part replacement, take the customer service approach. Check out some best practices around handling warranties and claims from industry experts, and then consult your own legal partners to find the best course of action.
Knowledge is Power
The first step to handling any warranty issue is to avoid them in the first place. It’s essential for operators to follow manufacturer recommendations for fluids and parts, as well as strict service processes that ensure the job is done right every time.
Owner’s manuals, shop software systems, vendors, and other reputable resources can help determine the correct parts and services. That way, your techs can find out that, for example, some newer Hyundais have a recommended fuel additive service every 5,000 miles for certain situations. Or you might need to make sure you’re using an engine oil with a certain specification, such as DEXOS.
Another foundational best practice is to have thorough documentation of each service. This is important not only for the customer’s information, but it also provides a clear record that a shop was exact in its use of recommended products, whether it’s a certain engine oil spec or a part.
“That’s hugely important, especially if the vehicle goes to a dealership,” says Justin Cialella, president and CEO of Victory Lane Quick Oil Change. “The first thing a dealership will say, if they believe it’s a preventative maintenance related service issue, is ask where the vehicle was serviced.”
Specificity is important. For engine oil, Cialella says that it’s not too much to include the API service category, the ILSAC specification, and any OEM specs.
Without thorough documentation it might become difficult to prove that a shop used a certain recommended specification oil if it’s not written clearly on the service invoice.
It can be challenging to keep up with every OEM recommendation for all makes and models, especially because manufacturers might issue new guidance years after vehicles roll off the assembly line.
Checking for technical service bulletins, or TSBs, becomes essential in this case. Tatum says that his shops have computer systems that allow for easy checking, especially if a technician spots a problem on a vehicle.
“If we see a TSB and we do have an issue and see the issue, we put that into the comments,” he says. “We’ll say, ‘Noted leak around power steering pump prior to service. TSB from dealer states potential recall.’”
That’s all part of thorough documentation, meant to safeguard a shop but also to help customers get the most out of their visit.
Shop Service Warranties
The fine print that fills up the back of an invoice is important. The shop’s limited warranty covers the parts and labor for a window, often three months and 3,000 miles, depending on the service.
“That basically comes from a position that we have a very, very high confidence that the products we’re using, the filters we’re using, the workmanship, is not going to fail within that interval,” Cialella says.
Most shops will have boilerplate service warranties, especially franchised operations with corporate support. For independent shops looking to review their practices, Cialella recommends the industry trade group as a resource.
“I think the first place they need to go to is the AOCA,” he says. “The AOCA has a wealth of information when it comes to all that type of stuff.”
There are a few best practices to get operators started. First, don’t be tempted to over-extend your warranty. You never know how hard drivers might be treating their vehicles, and an overly generous warranty might leave your shop open to undue liability, Cialella says.
Another key provision in a service warranty is the right to inspect or investigate, Tatum says. Make sure it has language that requires the customer to notify your shop and allow some kind of inspection before they take it somewhere else to get repaired. At that point, it becomes more difficult to assess what went wrong.
“You have to be contacted first to have the opportunity to investigate yourself. Because there will be people who get their car fixed,” Tatum says.
What About Parts?
While shop warranties generally cover the labor of service, manufacturers of parts also offer various warranties against factory defects. For certain cases, a parts warranty might overlap with your service warranty.
For many parts, shops work with distributors. Those companies can be helpful to learn about various manufacturer warranties and as a starting point if a customer makes a claim. Dave Everett, quick maintenance expert and founder of Dave Everett Consulting, says that operators can start with their vendor partners for big or small cases.
“As an operator, they should let their distributor know about those little things,” says Everett, who spent nearly three decades working for a distributor. “As you’re doing a wiper blade here and a wiper blade there, they add up. You might have one a month. It could be three or five a month.”
From a customer service standpoint, Tatum says that he finds it easier to replace smaller parts quickly. If a clip fails on a wiper blade, for example, he doesn’t believe it’s necessary to track down whether it’s due to an incorrect installation or a faulty clip. He’ll simply replace the wiper and offer a gift card to say: “Sorry for the inconvenience.”
“Not only did you fix the problem, but you gave them an incentive to come back,” he says.
Oil filters are different, however. While they are small, inexpensive parts, a failing oil filter can lead to expensive vehicle problems. If a case arises that could be the result of a filter malfunction or a service mistake, it’s in everyone's best interest to investigate.
“In those cases, they’re going to need to hang on to that filter, call their distributor, and the distributor will give them the information or send something out to have them picked up, fill out a claim form, then it will be sent to the manufacturer for testing,” Everett says.
Manufacturers have the ability to test specific filters to find out if a manufacturer defect or installation error was the likely cause of a filter failure. It’s important to find out a clear cause, because customers will always look to the quick lube shop first if it was the last to service a vehicle. The documentation from testing helps protect a shop if it did everything correctly.
“It also protects them (the operator) in many cases,” Everett says. “Because sometimes the claim from the customer is bogus. And when you get the testing from the manufacturer that backs you up, all of a sudden that helps you.”
How To Handle Claims
When a customer experiences an issue that they believe is caused by a faulty part or improper service, a warranty claim is initiated. It might be a customer who had their oil changed and found a pool of oil beneath their car the next day. It could be an unrelated issue, like engine knock, that they feel is related to the oil change.
This is where Tatum’s earlier guidance comes into play: Your shop warranty should help ensure that you have the ability to investigate the cause. But the real first step begins before that, when the customer calls to make that first complaint.
Cialella says that it’s never a good idea to act dismissively toward customer claims.
“The first thing that you do is take every claim seriously,” he says. “The time to handle the claim is not to handle it over the phone with the customer. You take it seriously, you go out and inspect the vehicle, have it brought to your location.”
That’s crucial, Tatum says. He teaches his managers to listen first to customers and repeat back the information. Above all, don’t argue and don’t admit fault. Follow the process and stay composed. Take the customer service approach.
Take a thorough approach and document every step.
“We go out, we look at the vehicle, inspect the vehicle, photograph the vehicle and things like the oil dipstick,” Cialella says. “Any signs of failure or damage, and then we start to work backward from there. If we come to the conclusion right away that this is something that we did wrong, then you step up and handle the issue.”
The documentation should be kept up during a claims process, too. Cialella says that Victory Lane created a ticket system to track progress, investigation, and contact points with the customer. That way, a shop’s attempts to reach a customer and follow the steps are recorded.
Warranty claims might not be an easy part of customer service, but they are among the most important. The ability to turn a bad experience into a positive customer relationship is a prime example. The documentation, cool-headedness, and process-driven reaction to these cases can put you on the right path.