OFT report highlights extended warranty training gap

Two thirds of customers weren't aware of their cancellation rights.

One third of sales staff gave customers incorrect information regarding their rights.

Some retailers are still failing to deliver correct extended warranty information to customers at point of sale according to an Office of Fair Trading report published on October 3.

The report investigated the impact of the 'Supply of Extended Warranties on Domestic Electrical Goods Order' since it came into force on April 6, 2005.

The Order aimed to make the extended warranty market more competitive for consumers by implementing measures to help them better understand their rights.

The report highlighted that as many as two thirds of customers were not provided a written quotation as required by the order.

An identical number were also not sure of their cancellation rights, a further example of the type of information customers should be receiving.

The mystery shopping exercise also discovered that as many as one third of sales assistants were informing customers incorrectly on their rights, causing the type of customer confusion that the order originally set out to beat.

Steve Burrell, Allianz Schemes, said: "At Allianz we view training as an important factor in the complete service that we provide to our partners and we develop tailored training programmes to assist our partners' employees in understanding the extended warranty product and its regulatory environment." Allianz Schemes advises there are a few key areas retailers can address to enable successful and compliant sales: Get buy-in from staff - communicate the benefits a successful scheme can bring to the business and consequently to them.

Give full training - identify knowledge and skills gaps.

Consider focusing limited training resource on 'insurance specialists' to take referrals from less experienced staff.

Refresher training can tackle any additional training needs that arise Incorporate warranty sales and statistics into your performance management systems to promote the correct understanding and selling of the product.

Consider instigating your own mystery shopper programme to help increase warranty conversions and reduce cancellations.

Mr Burrell added: "Extended warranty providers and retailers have a responsibility to ensure that customers are presented with the right information at the right time.

Retailers can promote trust and transparency by ensuring staff training is a top priority.".

Back to top