2.03 warranty

The Federal Trade Commission has the authority to regulate warranties on any products that sell for more than

$15

True or False: Only express warranties hold up in court.

False: implied warranties are valid

Is an express warranty an oral promise given by the salesperson?

Yes. Whether the promise is limited or full, the seller must fulfill the promise to the customer.

The Magnuson-Moss Warranty Act of 1975 provides that warranties must be

clearly expressed

A customer buys an mp3 player and receives a printed warranty card stating the actions the company will take if the mp3 player does not work properly. This is an example of a(n) __________ warranty.

express

One way in which a business can benefit from warranties and guarantees is

feedback from customers

A warranty that covers the entire product is known as a(n) ___________ warranty.

full

"Your money back if not satisfied" is an example of a

guarantee

A promise made by the seller to the customer that the seller will refund the customer's purchase price if the product does not perform as expected is defined as a

guarantee

In its catalogs, a clothing manufacturer states: "If you are not completely satisfied with any item you buy from us, at any time during your use of it, return it and we will refund your full purchase price." This is an example of a

guarantee on goods

Holiday Inn Express uses the slogan "No excuses, guaranteed" as a money-back promise to guests. This is an example of a

guarantee on service

When customers buy televisions, they expect them to transmit pictures. This is an example of a(n) __________ warranty.

implied

Companies that build a reputation for carrying out the terms of their warranties and guarantees generally have higher sales and more repeat customers, which result in

increased profits

Sam's new car came with a warranty that ended after 12,000 miles or one year. The warranty covered major parts. This is an example of a(n) __________ warranty.

limited

One way in which customers benefit from warranties and guarantees is

reduced anxiety about purchases

Giving customers a list of locations at which they can obtain repair or replacement as part of a warranty or a guarantee provides the customer benefit of

service information

Which of the following is a purpose of warranties and guarantees:

to protect the producer and the seller

Two characteristics of a good guarantee are that it should be

unconditional and understandable

L.L. Bean promises "100% satisfaction in every way" to those who buy its goods. Items can be returned for refund or credit. This is an example of a(n)

unconditional guarantee

A promise made by the seller to the customer that the seller will repair or replace a product that does not perform as expected is defined as a

warranty