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The Samsung Galaxy Note 7 explodes? Samsung's costs presumably will too!

Warranties are a significant cost factor in nearly all industries, even without this kind of tragic construction error: In 2014, U.S. companies alone spent $29 billion on warranty cases!

Customer satisfaction is also closely linked to how the service process is organized in the event of a claim, because nobody wants to wait three weeks for their product to get repaired.

But what happens if the claim isn't a production error at all, but quite simply warranty fraud? What if the repairers – actually partners to the manufacturer – are ripping them off in a big way? How can companies get a grip on those costs? What can they do if repairers claim that they used far more material, replacement parts and/or working hours than was actually the case?

By interconnecting data and information, it is possible to see, for example, how many replacement parts the repairer in fact ordered. Because one thing is certain: it can't have installed more than that. Benchmarking and knowing one's industry are helpful, as is comparing repairers, and it generates objective data: if repairer A charges X minutes to repair the same defect on a mobile phone and repairer B charges only half of that time, the manufacturer clearly has to consider why!

It all becomes a detective case when, "by accident", false IMEI numbers – the manufacturer's device numbers that show whether a given device is still within or already out of the warranty period – are stated. Such creative ways of interpreting the truth can cost manufacturers billions!

As consultants and as entrepreneurs with successful company start-ups in this segment in our past, we at Barkawi are well-versed in the theory and practice of this issue, and we have dealt with all the details in all their depth in our everyday business. There is nothing we haven't already seen!

A new book is now out on this very interesting topic, with an extensive foreword by our expert colleague Maximilian Kammerer, Partner at Barkawi Management Consultants:

Warranty Fraud Management:
Reducing Fraud and Other Excess Costs in Warranty and Service Operations

> Link to Amazon