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David Perry

Let’s shorten warranties, sell profitable extensions

It’s time to introduce a new business model in the bedding industry. Let’s scrap those absurdly long warranties (20 years and more) and replace them with a much more reasonable and realistic one-year warranty.

Then let’s allow bedding retailers to sell extended warranties, working from that one-year base manufacturer warranty. That will give retailers a chance to add a very profitable new business, one with few risks and great rewards.

If consumers want a warranty longer than one year, they can pay to extend it.

This would be a relatively new model in the bedding industry, but it’s a model that’s already working well in a number of other industries, such as consumer electronics and automobiles.

Barrie Brown, the insightful CEO of retailer Mattress Giant, based in Addison, Texas, pointed the way to a more profitable future for the mattress industry with a thoughtful presentation on the warranty issue at our recent Bedding Conference.

He made a powerful case for shorter warranties, forcefully pointing out that long bedding warranties are out of touch with much shorter warranties on products that cost much more than sleep sets.

While those points are well taken, Brown went a step further. He sketched out a vision for the future. Brown said that Mattress Giant has experimented successfully with extended warranties on floor samples, exchanges and other products not covered by manufacturer warranties.

Those products have extended warranties ranging from one to five years, he said. In the three years since that program began, the retailer has generated an additional $20,000 a month in revenues. Claims have been negligible.

“It is the most profitable thing we sell in our stores,” Brown said.

The more I’ve thought about Brown’s case study, the more I like it. I’m convinced this is what we should be doing throughout the industry.

The long warranties that producers now offer tend to lengthen the replacement cycle, in our opinion. They send precisely the wrong message: that mattresses will last for many, many years. Everyone in our industry benefits if we shorten the replacement cycle. Producers sell more beds. Retailers sell more beds. And consumers sleep on better beds when they get rid of those aging dinosaurs that rob them of the great sleep they need and deserve.

Also, retailers get a profitable new business when they sell extended warranties. That makes them stronger players in the industry, and that’s good for everyone.

There are obstacles to be overcome if we are to move to one-year warranties. But Barrie Brown’s vision of the future is a positive and compelling one. This is a win-win-win scenario. Let’s make it happen.