Skill: leooooooow/warranty-designer (version 1.1.0)

--- name: warranty-designer description: Design product warranty and guarantee programs that increase buyer confidence and conversion rates while managing liability exposure, including policy language, claim workflows, fulfillment costs, and disclosure requirements. Use when launching a new warranty, updating existing terms, calculating reserve costs, or writing customer-facing warranty copy. --- # Warranty Designer A warranty is a marketing instrument with a P&L. Design it so the buyer believes the brand stands behind the product, and the brand can actually afford the claims that result. ## Quick Reference | Decision | Strong | Acceptable | Weak | |---|---|---|---| | Length | Matched to expected product life (apparel: 1 yr, electronics: 2 yr, lifetime gear: lifetime-of-original-buyer) | Industry-default length | Vague "lifetime" with no terms | | Coverage scope | Defects in materials and workmanship, clearly enumerated exclusions | Defects only, exclusions implied | "Covers everything" with no carve-outs | | Remedy | Repair → replace → refund, in that order, brand picks | Replace only | Refund only (most expensive to brand) | | Claim trigger | Photo + order number + ≤3 short questions | Photo + invoice + form | Phone-only, requires shipping in for inspection | | Reserve | 1.5× projected claim rate, reviewed quarterly | 1× projected claim rate | No reserve, claims hit current-month margin | | Disclosure placement | On PDP, in checkout, in shipping confirmation, on insert | On PDP only | Buried in T&C footer | | Transferability | Original buyer only (cleaner reserves) | Transferable for first 6 months | Fully transferable forever (creates resale arbitrage) | ## Problems this skill solves 1. **Marketing promises a "lifetime warranty"** that operations cannot afford to honor at scale. 2. **Claim rates that nobody forecast** so they hit the P&L as a surprise variance. 3. **Warranty language that contradicts the consumer law** of the markets you sell into (UK Consumer Rights Act, EU directive 2019/771, US Magnuson-Moss). 4. **Claim friction designed to deter customers** rather than to filter abuse — produces 1-star reviews about "warranty is a scam." 5. **No reserve account**, so a single bad batch creates a quarterly hit. 6. **Transferable warranties** that create a secondary market the brand can't track or control. 7. **Coverage that overlaps insurance** — you're paying twice and customers don't know which to claim against. ## Workflow ### Step 1 — Define the product failure curve Estimate the rate at which units fail in months 1, 6, 12, 24, 60. Use historical RMA data, vendor MTBF (mean time between failures), or a conservative analog from a similar SKU. The integral of this curve over the warranty length is your expected claim rate. ### Step 2 — Pick the warranty length Length should be just longer than the failure-rate inflection point. If the product fails mostly in month 0–3 (defects) and then has a flat curve, a 1-year warranty is generous. If failures spike in months 12–24 (wear), you need 2+ years to be credible. Don't promise "lifetime" unless you've modeled lifetime claims. ### Step 3 — Choose the remedy hierarchy In order of cost to the brand: repair < replace from B-stock < replace from new < refund. Pick the order, document it, and train support to follow it. Allow customer choice only for low-claim-rate products. ### Step 4 — Enumerate exclusions in plain language Every excluded scenario should be named: "normal wear," "misuse," "damage from use outside intended purpose," "modifications," "consumables (batteries, filters)." If you can't name it, you can't exclude it. Use 6–10 exclusions, not 30. ### Step 5 — Design the claim flow Three steps maximum: photo + order number + reason. Decision in ≤48 hours. No physical return required for items under a threshold (usually 1.5× shipping cost). For higher-value claims, prepaid return label with a window of 14 days. ### Step 6 — Reserve and book it Multiply expected claim rate × average remedy cost × forward 12-month volume. Set this as a balance-sheet reserve and book a small monthly accrual. Review quarterly against actual claims. If you're under-reserving by >20%, the warranty terms are wrong. ### Step 7 — Disclose and surface Warranty link on every PDP, in checkout, in order confirmation email, in shipping notification, and on the insert card. Customers who can't find the warranty assume there isn't one and either don't buy or claim against the wrong party. ## Example 1 — Outdoor brand, daypack Daypack, $120 retail. Vendor MTBF data shows 1.5% defect rate in year 1, dropping to 0.3%/yr after. Materials and stitching can fail; zippers are the most common failure point. Customers expect "lifetime" from this category. - **Length**: Lifetime of original purchaser, against defects in materials and workmanship. - **Coverage**: Stitching, fabric integrity, zipper hardware. - **Exclusions**: Normal wear (fading, abrasion, scuffs), damage from improper use (overloading, sharp tools), modifications, theft, lost packs. - **Remedy hierarchy**: Repair (we mail you a kit or accept the pack at our repair partner) → replace from B-stock if irreparable → replace from new if no B-stock. - **Claim flow**: Photo of damage + order number + 1 sentence on what happened. Decision in 48 hours. Pack mailed in only if repair team requests. - **Reserve**: 2.5% of revenue (conservative), reviewed quarterly. Annual cost roughly $3 per unit on a $120 SKU. - **Disclosure**: Linked on PDP, in checkout copy ("Backed by our lifetime guarantee"), included on insert card with QR to claim form. ## Example 2 — Consumer electronics, $80 wireless earbuds Earbuds, $80 retail. Industry defect rate is ~3% in year 1, ~5% cumulative over 2 years. Customers expect ≥1-year warranty, will accept 2-year. Battery degrades after ~24 months. - **Length**: 1 year on full unit; 6 months on battery (consumable). - **Coverage**: Defects in materials and workmanship, audio quality issues, charging case failure. - **Exclusions**: Water damage beyond IPX rating, physical damage from drops, ear-tip wear, lost earbuds (not theft cover), battery degradation after month 6. - **Remedy hierarchy**: Replace from same-color B-stock → replace from new → refund. - **Claim flow**: Photo + order number + brief description. No return needed for units under 18 months — we destroy-in-place to prevent resale of warrantied units. - **Reserve**: 4% of revenue (year 1 + battery exposure). Adjust if claim rate shifts. - **Disclosure**: PDP, checkout, post-purchase email with one-tap "Start a claim" link if device is registered to the account. ## Common mistakes 1. **Promising lifetime without defining "lifetime."** Lifetime of the product? Of the purchaser? Of the company? Each means a different cost. 2. **No exclusions list.** Without enumerated exclusions, every customer claim is potentially valid, and disputes go to whichever side has more patience. 3. **Forcing physical returns for low-value items.** Shipping is more than the unit cost; just send a replacement and tell the customer to keep or recycle the original. 4. **Hiding the warranty in fine print.** Customers read warranties before buying. Surface = sale; hidden = lost trust. 5. **Conflating warranty with statutory consumer rights.** In the EU, the 2-year statutory guarantee exists regardless of your warranty. Your warranty must be additive, not a replacement. 6. **No reserve, so claims hit margin in real time.** Then management cuts claim approval when revenue is down — the worst time for it. 7. **Transferable warranty on a high-resale-value item.** Resellers price the warranty into the second-hand price; you eat claims you didn't get the original margin on. 8. **Asking the customer to prove "intended use"** before approving a claim. This shifts burden to the buyer and produces brutal reviews. 9. **Different rules in different markets** with no internal documentation. Support agents wing it and create inconsistent precedents. 10. **Treating warranty as legal team work.** It's a marketing/ops/finance instrument. Legal reviews the wording but doesn't design it. ## Resources - `references/output-template.md` — Warranty policy template ready for legal review and customer publication. - `references/claim-rate-model.md` — How to model claim rate, reserves, and unit-economics impact. - `references/legal-baselines.md` — Statutory consumer rights baselines for US, UK, EU, AU. - `references/customer-copy-patterns.md` — Customer-facing warranty copy that builds trust without exposing risk. - `assets/warranty-checklist.md` — Pre-launch quality checklist before publishing a new warranty.

path: assets/warranty-checklist.md
content: # Warranty Pre-Launch Checklist

Go through every item before publishing a new or revised warranty. 40 checks across 7 categories.

## 1. Policy design (7 checks)

- [ ] Warranty length matches product failure curve (not arbitrary)
- [ ] Coverage scope is enumerated (materials/workmanship, named components)
- [ ] Exclusions list has 6–10 plain-language items
- [ ] Remedy hierarchy decided (repair → replace → refund), not customer choice
- [ ] Transferability rule decided (original-buyer-only recommended)
- [ ] Consumable parts separately addressed (batteries, ear-tips, filters)
- [ ] "Lifetime" is defined — of product, of purchaser, or of brand

## 2. Financial (6 checks)

- [ ] Claim rate modeled from historical data or MTBF
- [ ] Average remedy cost calculated (weighted)
- [ ] Annual warranty cost computed and entered into P&L
- [ ] Reserve account funded at 1.5× annual warranty cost
- [ ] Quarterly review process owner assigned
- [ ] Per-unit cost folded into unit economics

## 3. Legal compliance (6 checks)

- [ ] US: Designated "Limited" or "Full" under Magnuson-Moss
- [ ] EU: Additive to Directive 2019/771 2-year statutory guarantee
- [ ] UK: Additive to Consumer Rights Act 2015, first 30 days right-to-reject acknowledged
- [ ] AU: Mandatory consumer guarantee notice displayed
- [ ] Translated into all supported market languages
- [ ] Controlling-language clause included

## 4. Claim operations (6 checks)

- [ ] Claim form has ≤3 required fields (photo, order number, description)
- [ ] 48-hour decision SLA documented and staffed
- [ ] No-return threshold set (usually 1.5× avg shipping cost)
- [ ] Prepaid return label process for above-threshold claims
- [ ] Support team T1/T2 escalation path documented
- [ ] Batch-anomaly trigger defined (e.g., >X claims in one week on one SKU)

## 5. Disclosure surfaces (6 checks)

- [ ] Warranty link on every PDP
- [ ] Warranty reassurance copy in checkout
- [ ] Mention in order confirmation email
- [ ] Mention in shipping notification
- [ ] Reference on insert card with QR to claim form
- [ ] Warranty page indexed (not noindex), clean URL

## 6. Copy and UX (5 checks)

- [ ] 3-line summary at top of policy
- [ ] No "5-star" or "satisfaction guaranteed" conflation with warranty
- [ ] "In addition to" statutory rights language present
- [ ] Claim page titled "Start a claim," not "Dispute"
- [ ] Mobile formatting reviewed (no giant legal paragraphs)

## 7. Operations readiness (4 checks)

- [ ] Refurb / B-stock pipeline capacity confirmed for expected claim volume
- [ ] Logistics partner can accept prepaid returns in all markets
- [ ] Support team trained on new policy (not just emailed)
- [ ] Effective date and version number visible on policy page


Security scan verdicts — ClawScan: clean | static analysis: clean | VirusTotal: clean | SkillSpector: clean (LOW)