If you’re an OEM (original equipment manufacturer) that offers a warranty, then you likely know the struggle of validating claims. Equipment and machinery require inspections and regular maintenance to remain operational. But, how do you confirm whether the end-user maintained the equipment or their OEM warranty claim is due to neglect?
Because you don’t have a solution to validate claims, you end up covering most, if not all, claims. Unfortunately, this includes fraudulent ones. The industry standard for the cost of warranty claims is 2.1% to 2.5% of product sales per year. Some companies estimate their cost to be as high as 3% to 5%. Furthermore, fraudulent claims make up 10% to 15% of all submitted claims.
Now, fraudulent claims don’t mean that your dealers or end-users have intent to take advantage of you or scam you. However, if your warranty terms state that proper equipment maintenance is mandatory and they haven’t done that, then their warranty claim is not valid. With high-value, high-performance assets, claims caused by neglect can add up. Redlist will help you eliminate these issues by acting as your warranty validation tool.
How to Prevent Fraudulent OEM Warranty Claims
Redlist’s warranty validation function does not replace your warranty claim platform. Instead, Redlist is a tool to include in the sale of equipment that makes maintenance easier for the end-user and claim validation easier for you. Simply put, you create the recommended preventive maintenance and inspection programs in Redlist and require their completion and tracking to have a warranty claim processed. Not only does this act as a warranty validation, but also you receive fewer claims. This is due to the clear and easy-to-access maintenance instructions that can be accessed by scanning a QR code and completed using a mobile app on your customer’s phone. Then, when a warranty claim does come in, you can access the customer’s account and pull the auto-populated report to see the inspection and maintenance history for the asset.
Customers who implement Redlist as a warranty validation tool experience an average of 5% to 15% reduction in the total number of claims. In some cases, they see up to a 30% reduction.
Added Benefits of Warranty Claim Validation
Reducing your total number of claims and mitigating fraud or neglect is the number one benefit of warranty validation. However, there are more benefits for you and the dealer or end-user:
- No more time spent searching for missing information or questioning customers about equipment maintenance.
- Empower customers with preventive maintenance plans accessed easily with a QR code scan and a mobile app.
- Recommended maintenance and inspections are completed and tracked via an easy-to-use mobile app that eliminates the need for paper forms, spreadsheets, or inaccessible PDFs.
- Better maintenance decreases equipment downtime and increases equipment life.
- More uptime and longer equipment life make for happier customers.
- Field technicians completing repairs on valid claims can analyze the asset’s history for any signs of the root cause.
- Providing an app-based preventive maintenance plan with equipment is a value add for your product.
- Reducing the total number of claims and their costs has allowed one Redlist user to offer a two-year warranty instead of one, which sets them apart in their industry, creates loyal customers, and builds confidence in their equipment.
Reduce Your OEM Warranty Claims with Redlist
Reducing fraud and neglect reduces your overall cost of warranty management with a relatively low barrier to implementing this solution. You already know the preventive maintenance recommendations for your equipment, and it only has to be configured in Redlist once. When you sell equipment, your maintenance plan loads to the customer’s account based on their purchase. Redlist’s implementation team handles the rest, including if the customer has any issues, questions, or needs help learning the platform. It makes your warranty program stronger while passing the benefits of better-maintained equipment on to your customers.
If you’d like to learn more, you can schedule a demo or read this Redlist case study that shares the impact of OEM warranty validation on IRock, a mining and recycling equipment manufacturer.