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Whats your warranty worth? Simon Miles, Sales director of Carbon8Lighting on the potential pitfalls of big promise warranties on LED Light fittings

The LED Lighting market is booming and never has there been so much choice of supply. Price and performance have both reached levels where return on investment figures can look attractive even for businesses operating relatively low hours.

For those looking to buy into LED lighting the offers the opportunity to hunt down a great deal but also the daunting prospect of sorting the wheat from the chaff.

As with most purchases, it will be price and performance that are the primary decision drivers, with secondary details such as suitability, availability, warranty and specific features that will help narrow down the choices.

Those who decided to embrace LED technology early on, enticed by the idea of maintenance free low energy lighting, often found out that the warranty was an important factor.

Assembled correctly using quality materials and components, and working within manufacturers tolerances, LED light fittings are immensely reliable and should fulfil that dream of many years of low or zero maintenance, high quality, low degradation lighting. However as the IT boom plateaued it left many factories looking for new markets to serve and LED lighting was a strong contender. Component production ramped up as factories switched to assembling LED light fittings and this caused two issues with reliability. The first was the lack of component quality control as demand increased, and the second was the sub-standard assembly of these components into LED light fittings and this resulted in much higher rates of failure than should be expected of a well-designed and assembled LED light fittings.

This is the point at which the value of a warranty is tested and the cost of ownership potentially changes. This is when you research prior to purchase may save you from unseen additional costs of ownership.

Before you make your purchase make sure you understand exactly how the warranty works. How you initiate a claim? Who pays shipping costs to and from site? Does your chosen supplier advance replace fittings? This is important if you have a failed fitting that is awkward and costly to access. Does your LED supplier offer an compensation towards the cost of exchange? What restrictions and caveats could invalidate the warranty? These are all important questions that the combined answers of which will give you the total value of your warranty. As a rule of thumb, I believe that if you need to have your legal department trawl through reams of warranty terms then you can strike this product off your wish list.

Of course, even the most comprehensive ‘bells and whistles’ warranty is only good if the supplier who offered it to you is still there when one of your fittings goes faulty and you go to initiate your warranty claim.

One of the problems with so much choice and so much competition in a market is the high number of businesses that fail. LED lighting now sees one of the highest rates if business failure of any technology market sector, simply because of the over saturation of this market.

The issue that this gives a prospective buyer is that if there is no one there to support the warranty then the value of this warranty doesn’t just become zero, but it potentially becomes an unforeseen and unpredictable cost. The greater the value of the warranty that was sold in the first place, the bigger the liability will be if it is not upheld.

So why is this issue so prevalent with the LED industry? The answer is often simply desperation. A business that is cash strapped, sitting on stock and struggling to win orders will promise a lot. The only increase in value of their stock they can add without having to spend money to increase the warranty ‘value’ to attract customers. These warranties are written promises and if the company goes down the plug hole, so does the warranty.

This is by no means a theoretical issue. I have heard countless times stories of customers being left to deal with LED light fitting failures after being lured in bu the reassurance of a fantastic warranty, only to find out that the supplier no longer exists.

A stark example of how costly this issue can become is illustrated by the following recent set of events.

A couple of years ago we had been asked to provide a quotation for the car park lighting for a large local collage. Despite our fitting having better performance, we lost the opportunity based on one key difference between our product and the product that was chosen for the project. Of course, this was the warranty. Our five year warranty looked insignificant when put alongside the colossal TWENTY YEAR warranty being offered by the competitor. For the college this translated to twenty years of pretty much zero maintenance costs.

About one and half years after the project was installed we received a call asking if we could take an exploratory look at a failed street light fitting…one of many installed at the college. It transpired that the company who had offered the 20 year warranty ‘deal’ went out of business soon after the project was installed. On this occasion the college were lucky as it had made the purchase through a third party and this third party, being the supplier to the college, is now contractually obliged to honour the remaining 18 years of warranty.

As a third party supplier was an existing customer, we repaired the failed fitting for free and returned it, just to help them out on the one occasion. However, 20 years is a long time for any light fitting and with failures showing less than two years in, it is likely that the third party will be paying out over the next 18 years and until this time passes they will not know what the total liability will be.

So how can you avoid this ‘unforeseen’ and potentially substantial additional cost of ownership?

There are two key aspects to consider, the warranty terms, and the strength of the business offering the warranty.

The details of what to look for in the warranty terms we have already covered, so if you have found your suitable LED light fitting and you are satisfied that the warranty is what you would wish it to be, then its now just down to vetting the business.

Checking the age of the business and its financial stability is important and there are many online services to check this information. Most of these sites take information from Companies House and analyse this data and then create a credit score. A start-up company may be perfectly suitable if there has been suitable money invested. What you want to know here is the worth of the business.

If you are not wholly convinced by the financial information and you are left on the fence then you can dig deeper by doing a historical check of directors of the business. People that have failed businesses are regular ‘re-offenders’ and records are kept of all a directors past histories.

There are additional checks that you should consider before.

A postcode check via a well-known online map service can take you to the front door of a business and it’s a two-up, two-down semi in the middle of a housing estate you can cross this one off your list.

Sudden big changes in the warranty and or pricing can signal that a company is desperate, especially if these are to undercut a competitor’s quote. Small changes in price and or specification under these circumstances are far more understandable in a competitive process.

The investment in upgrading your lighting to LED is likely to be significant, as will be the reward of high quality, low energy, low maintenance lighting. Going through the process of careful vetting suppliers before you commit will serve you dividends in the long term. Invest the time and do your checks fully and you should have many years of fantastic trouble free LED lighting.