Warranty policies for service businesses: what to promise and how to write it down

A warranty is one of the few places where a small service business can make a clear, checkable promise that a customer remembers. "We'll come back and fix it free for a year" is easier to believe than any claim about quality. It is also a real obligation: every warranty call is a truck roll, a technician's time and a day you are not billing someone else.

This guide explains how to write a warranty policy that customers trust and that you can afford, and where federal warranty law comes in. It is general information drawn from the Federal Trade Commission's guidance, not legal advice. Implied warranties and many consumer protection rules are set by the states; ask a local attorney to check your final wording.

The two promises in most service warranties

A service company usually stands behind two different things, and confusing them causes most warranty disputes.

• Your workmanship. The quality of the labor: the installation, the repair, the application. This is your promise, backed by your company.
• The products you install. The water heater, the opener, the fixture, the shingles, the sealant. These usually carry a manufacturer's warranty, which is the manufacturer's promise, with its own terms, registration steps and exclusions.

Write them separately. Your policy should say what your workmanship warranty covers, and then say that products are covered by their manufacturers' warranties, which you will pass along and help the customer use. If you choose to add your own coverage on parts beyond the manufacturer's, say exactly what and for how long.

Service-only businesses (cleaning, lawn care, pressure washing) usually offer a satisfaction guarantee instead: if something was missed, report it within a set number of days and the crew comes back. That is still a warranty in the customer's eyes, so write it down with the same care.

What federal warranty law says

The Magnuson-Moss Warranty Act is the federal law on consumer product warranties. The FTC's Businessperson's Guide to Federal Warranty Law explains the parts that matter to a small business:

• It covers written warranties on consumer products, not services. The FTC says the Act does not apply to warranties on services, only goods. But if your warranty covers both the parts provided for a repair and the workmanship in making it, the Act does apply to you.
• Installed products count. The Act covers tangible property normally used for personal, family or household purposes, and the FTC notes this includes property attached to or installed on real property. A furnace, water heater or garage door opener installed in a home is a consumer product.
• You do not have to offer a written warranty. The Act does not require one. Once you offer one on a consumer product, its rules apply.
• Full or limited. For products costing more than $10, a written warranty must be titled either "full" or "limited." A full warranty meets the federal minimum standards; a limited warranty does not.
• Disclosure and pre-sale availability. For products costing more than $15, the terms must be stated in a single, clear, easy-to-read document, and the warranty must be available to consumers before they buy.
• Implied warranties. State law gives buyers implied warranties, such as merchantability (the product works as intended) and fitness for a particular purpose. If you give a written warranty on a consumer product, you cannot disclaim implied warranties, though a limited warranty may limit their duration to the warranty period.
• No tie-ins. Generally you cannot make warranty coverage conditional on the customer buying a specific brand of parts or service from a particular company, unless you provide it free or the FTC grants a waiver.

If you only warrant your labor on a pure service, the federal Act generally does not apply, but state law and your contract still do. If you install products and warrant them, read the FTC guide in full.

What your warranty policy should include

The FTC guide lists the subjects a written consumer product warranty must address, and they make a good checklist for any warranty, product or not:

1. What is covered. "Workmanship on the installation of the water heater, including connections we made." Specific beats broad.
2. What is not covered. Damage from misuse, accidents, weather events, lack of maintenance, other contractors' work, pre-existing conditions you noted, and normal wear.
3. How long it lasts. State it in time from a clear start date: completion date, invoice date, or installation date.
4. What you will do. Repair, redo or replace your work at no charge for labor, and whether that includes parts or only labor.
5. How to get service. Who to contact, how (phone, text, portal), what information to provide, and how quickly you respond.
6. How state law applies. A short statement that customers may have other rights under state law.

Add what voids the warranty: someone else altering your work, failure to pay the invoice, or skipping required maintenance, if you tie coverage to maintenance. Each condition should be one a reasonable customer would expect.

How long should your warranty be?

Long enough to mean something, short enough that you can stand behind it if you sell the company or a crew leaves. Think about three things:

• When failures show up. Most workmanship problems in many trades show up early: a leak at a connection, a seam that lifts, a spot that was missed. A warranty that covers that window covers most of the real risk.
• What it will cost you. Look at your callbacks over the past year. Count the trips, the hours and the parts. That is what your warranty costs today; a longer term costs more.
• What your competitors in the trade offer. A much shorter warranty than your market expects will cost you jobs. A much longer one may cost you more than it earns.

Some companies use the warranty as a tier in their pricing: a standard workmanship warranty on the basic option and a longer one on the premium option, as described in our guide to good, better, best quotes. If you do, the extra coverage must be real, and the cost of honoring it belongs in the price.

Handling warranty claims

A warranty claim is a complaint with a contract attached. Treat it with the same speed and care as any complaint, which our guide on handling customer complaints covers in detail.

1. Acknowledge it the same day and pull up the job record: date, crew, scope, photos, products installed and serial numbers.
2. Check whether it is covered. Within the term, part of your work, not excluded. If it is a product failure, start the manufacturer claim and tell the customer what to expect.
3. Schedule the visit quickly. A warranty customer should not wait behind new paying work.
4. Fix it and document it. Photos before and after, what failed, what you did, time and parts.
5. Explain clearly when something is not covered, referring to the written policy, and offer to fix it at your normal price.

Track every warranty claim by crew, service and cause. Warranty costs are part of job costing: a service with frequent callbacks may be underpriced, under-trained or both.

Put the warranty where customers can see it

A warranty only builds trust if customers know about it. Put a short summary on the quote, the full policy linked from the quote and the invoice, and a clear page on your website. If you warrant consumer products, the federal pre-sale availability rule means customers must be able to see the terms before they buy, so linking the warranty from the quote they approve is the simple way to meet it.

Keep the warranty attached to each job record with the installation date and product serial numbers. A custom CRM can store that on the customer's account so a claim three years later starts with the facts, not a search through old texts. Our service contract guide covers how the warranty clause fits into the rest of your terms.

Frequently asked questions