Posted in Business Start Ups
How many times have your purchased some consumer good and in the box is a copy of the warranty in print so small it made you squint? Now thanks to a recent change in the law if a consumer good has a warranty a copy need not be provided in the packaging. It can now be posted online and the print can be enlarged as much as you want on the screen. If you make or market consumer goods this should cut your costs and eliminate another piece of paper to put in the box.
The E-Warranty Act of 2015 amends the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act. The changes allow manufacturers and sellers the option posting written warranties online instead of on or with the consumer product as was required under the law. The Congressional intent of the law is to provide,
- An environmentally-friendly means to give consumers access to product information, and
- Flexibility in terms of complying with labeling and warranty requirements.
Supporters of the law see it as a way to bring warranty publishing laws into the digital age, increasing access to warranty information while reducing waste. Consumers need not keep track of papers they can see warranty terms on computers, tablets or smartphones.
Under the law written warranties aren’t required but if they are offered the Magnuson-Moss Warranty Act and its Federal Trade Commission (FTC) regulations require sellers and makers of products costing more than $15 at retail to,
- Show the text of the warranty to consumers, and
- Make the warranty available to potential buyers prior to the sale.
The E-Warranty Act allows companies to,
- Set up a web page that displays the warranty clearly and conspicuously and
- Print the warranty’s web address on product packaging, the product itself, product manuals or on package inserts.
Manufacturers are required to,
- Give information on how consumers can review the warranty terms (such as instructions on how to visit the web page for complete warranty terms), and
- Provide information that allows consumers without internet access to obtain the warranty information: their phone number, mailing address or another non-Internet means of reaching the manufacturer so a consumer can obtain and review the warranty.
The FTC’s Pre-Sale Availability Rule is unchanged by the amended law.
- Manufacturers must provide a way for retailers to disclose prior to the sale the full text of written warranties through electronic or other means at the retail location (or in a print catalog) even if the new option for a website link on the package or product is used under the new law.
- Retailers must make warranties readily available to consumers close to the products, may give hard copies when requested, use kiosks, mobile devices or some other electronic means to allow consumers access to warranty terms.
The law went into effect when it was signed in September but it also gives the FTC a year to issue regulations to implement it. Since there aren’t any formal FTC guidelines yet you may want to hold off on making significant changes in publishing warranties. In the meantime you could supply copies of warranties with products as well as publish them online until new regulations go into effect.
If you have any questions about product warranties, the kind of liability they may add to your company and how to avoid legal issues pertaining to warranties contact our office so we can discuss your products, warranties and how they could impact your business.