Difference Between Warranty and Guarantee

Whenever you buy a product, you have certain expectations of the product. If the expectations are not met, then you as a customer will be very disappointed. To cater to your expectations, many companies provide Warranty or Guarantee with the product. However, consumers get confused with respect to the difference between warranty and guarantee. We will explain it in detail in this article.

What is warranty?

To understand the difference between warranty and guarantee, let us understand Warranty first. To state it simply, Warranty means a commitment from a manufacturer to its customers that if the product breaks or if there is any problem in the product, the manufacturer will provide free repair for the product. But the manufacturer does not commit replacement. He commits only repair.

This basically means that the customer is protected against sudden breakage or sudden problems in the product. If you bought a costly Refrigerator today, and it stops working one month down the line, why would you pay for the repairs? There should be a minimum time frame when the company is responsible for the product to work.

Companies therefore provide warranties with their product as a sign of assurance that the company is invested in the well being of the product. In other sense, if a company does not provide warranty for the product, then the company is not confident about the quality of the product or the liability lies with the consumer.

Example of Products covered under warranty – Your smartphone suddenly starts behaving weird. Some icons are not clicking even though you are pointing at them. As the phone is covered under 6 months warranty and it has been only a month since the purchase, you take the phone to the service center and they repair it for free. No charges applicable.

Example of product not covered by warranty – Continuing the above example, after 2 months, the phone slips from your hand one day and you break the screen. Now this is not covered under warranty so you will have to pay for the screen to be replaced. It is the owner who is liable in such cases.

Companies look at their own products before committing a time frame for warranty to be applicable. If a company which manufactures goods is sure that their product will last at least 1-2 years without need of any service, then they are most likely to give a warranty on that product.

What is Guarantee?

Guarantee is a step ahead of warranty wherein the company is so confident of their product, that they offer repair or replacement of the product. In short, if there is any problem in the product, the company will first try to repair the product and then if not repaired, it will offer free replacement.

When Amazon Kindle was launched, it was a completely new concept in the market and there was a 1 year guarantee on the product. Kindle was known to have a soft screen and its screen breaking was a problem. However, Kindle knew what percentage of their customers will suffer from this problem. Due to the guarantee in place, many customers got direct replacement of their Amazon Kindle therefore motivating more people to adopt the Kindle faster.

Companies like Cross pens or Mont Blanc have lifetime guarantee of their products. They are so confident about their products, that if anything happens to the product which is not resolved by the company, they offer free replacement to the end customer. Off course these companies have to factor in the margins for the replacement so that they are in profit at the end. But the cost of guarantee commitment is a different issue altogether.

To make it simpler, we have made the following table to explain the difference between warranty and guarantee.

Difference between warranty and guarantee

Warranty	Guarantee
Warranty means repair but no commitment on replacement of the product	Guarantee means repair or if repair not possible then replacement
Warranty is generally given for products which are known to have frequent breakdows and are mechanical in nature - Example washing machines	Guarantees are given for products which are sturdy and robust and are unlikely to break down easily. Although guarantees are also given for mechanical product, the mechanical product should be high value or highly engineered. Example of products - Premium Pens, Heavy engineering products.
Refunds are not given in Warranty.	Refunds can be given in guarantee or a replacement is made
Warranty is covered for certain parts but there may be parts out of warranty for which payments need to be made.	Guarantee is completely free of cost. Guarantee may cover only certain parts. Other parts of a product might be under warranty.
After warranty, the warranty can be extended with additional payment.	After guarantee period, additional guarantee cover is very rare. Additional warranty might be given.
It is written and warranty cards are used to confirm date of purchase.	Guarantee is a written document and generally Guarantee cards are used for the contract. Guarantee is valid from the date of purchase to the last date of guarantee
Example - Air conditioners might be under 1 year warranty and hence repair of air conditioners will be done free of cost.	Example - Cross pens are covered by guarantee and if there is ever a problem with the pen, it is either repaired or completely replaced.

As you can see from above, The difference between Warranty and guarantee also stands as differences in legal propositions. While a customer can claim repair of the product for free, he cannot claim the replacement of the product because the company is not legally obligated for a guarantee / replacement.

However, there is an important point to be noted here. Most companies know that it is cheaper to replace a product rather than getting into legal hassles. At the same time, one negative customer can result in a loss of 10 positive customers due to negative word of mouth.

Thus many companies do provide free replacements if the customer is very unhappy with the product or if there is an escalation. At all times, warranties and guarantees have been established to raise the trust level of customers and to provide them with assurance.

If the customer is very unhappy, then a warranty might be converted to a guarantee and a free replacement might be given to satisfy the customer. At the same time, if the customer is misusing the product and not following the terms set by the company, the warranty and guarantee can be termed void.

It is also possible that a complete product might not be covered under warranty or that the warranty differs for different parts of the products. Example – Refrigerators have a 10 year warranty on the compressor but no warranty on plastic parts. Similarly, in case of guarantee, there might be terms and conditions which have to be followed to claim the guarantee without which guarantee cannot be claimed.

Overall, above were the key differences between warranty and guarantee. It is important to read the documentation accompanying the warranty or guarantee to understand what is covered under warranty and what is covered in guarantee.