Furniture Warranties - Tricks, Traps and Warnings
Furniture warranties have three primary purposes:
- Marketing (Creating the "perception of quality" for a brand or product line.)
- Legal protection (for retailers and manufacturers) against consumer complaints.
- Additional profit for retailers.
This article will first give a basic overview of how warranties are used by retailers and manufacturers to avoid costs and increase profits.
- At the end of the article is an annotated copy of a Wayfair extended warranty.
- A Flexsteel manufacturer's warranty is also analyzed in detail.
My annotated comments at the end of the article highlight specific terminology used in actual warranties to avoid coverage for most warranty claims.
Warranties are a marketing tool.
Customers want to be told that their furniture is well made and will last a long time.
They want to be told that they will be protected if the furniture is defective or arrives damaged.
The large bold print at the top of the warranty tells customers the things they want to hear.
Very few customers read beyond the big bold broad coverage terms to the smaller print, often scattered in multiple places throughout a long document, that disqualifies almost everything they think is being promised.
Warranties are legal documents written to protect manufacturers and retailers.
Furniture is fragile. It can be easily damaged in shipping or can “wear out” in just a few years.
- Wood furniture shipments often arrive at the retailer’s warehouse with minor damage. Often it is uncartoned, inspected and “touched up” before delivery to your home.
- Before picking up cartoned furniture at the retailer’s store or warehouse, have it taken out of the boxes.
- Then inspect it carefully.The receipt you sign may certify that you have picked up the furniture in good condition.
- If the cartons remain sealed and you do not inspect the furniture until you get home, the retailer may disclaim any responsibility. You signed a legal document stating that you took possession of the furniture in good condition.
Upholstered furniture is more likely to have hidden damage if a heavy piece, especially reclining sofas and sleepers, was dropped or mishandled during shipment or delivery.
Inspect the furniture as soon as you can. There is often a time limit for claiming shipping or delivery damage.
If you have even a small suspicion that something might be wrong, notify the retailer. Do not phone.
- Send an email so that you can later show proof of the date when the defect was first discovered.
Aside from damage caused during shipping, most customer complaints and warranty claims concern problems that occur over extended time periods.
Most common types of problems will be excluded from coverage. These include:
- Cushion problems: Worn-out, sagging or uncomfortable cushions are all excluded. This includes cushions that have lost their shape or resilience, even after a very short time period.
- If you read the preceding paragraph and think to yourself, "That doesn't apply to me. My warranty says my cushions are covered for life," keep reading until you get to the detailed analysis of an actual warranty document.
- Fabric problems: Exclusions include peeling, pilling, stains, discoloration, open seams and “normal wear and tear.”
- Frame and foundation problems: Squeaks, sags and wobbly arms that occur over time will not be covered.
- Proving that a frame problem is a manufacturer’s defect can be a long and difficult process.
- Loose joints on wood case pieces: Unless this is noted when the furniture is brand new, it will be attributed to either “normal wear and tear” or “customer abuse.”
Watch out for an incredibly tricky clause that will specify the warranty only covers “accidental” damage. Damage that occurs over extended time periods is excluded.
- Mechanism problems: Defective mechanisms are usually covered if the problem occurs during the limited time period specified in the manufacturer’s warranty.
- Don’t be surprised if the warranty coverage does not include shipping and installation costs.
- For older or discontinued items, replacement mechanisms may no longer be available.
Manufacturers will cover proven defects in materials or workmanship.
- Proving that your furniture has a manufacturing defect can be extremely difficult and frustrating.
- You may have to prove that the defect was present when you first purchased the furniture.
- Manufacturing defects that do not show up (and are reported) within the first year will probably be excluded under the standard “normal wear and tear” exclusion clause.
Repairing or replacing defective furniture or parts is expensive.
From a retailer’s perspective, customer service issues that require sending inspectors, paying for refunds, replacing parts or exchanging entire pieces are a direct cost against profits.
- These costs can be substantial. Retailers do everything possible to avoid them.
Repeated studies have indicated that “price” is by far the most important factor for most people shopping for low and mid-range furniture.
- Competitive pressures to lower costs have dramatically restructured the entire furniture industry over the past 20 years.
- Where there used to be thousands of small independent retailers, there are now only a handful.
The furniture industry is now dominated by a small number of huge national and regional chains.
- According to the May 25, 2020 issue of Furniture Today, the top 100 retailers account for almost 80% of all furniture, bedding and accessory items sold in U.S. furniture stores.
- The top 10 largest furniture retail chains account for more than 40% of total U.S. furniture store sales.
- The top 14 furniture stores all have annual sales exceeding $1 billion.
These mega-retailers have tremendous power to dictate pricing to the limited number of furniture manufacturers large enough to supply them.
- 20 years ago it was possible to buy a basic sofa for $399. It is still possible to buy $399 sofas.
- Costs of lumber, foam, fabric, transportation and labor have all increased over that time period.
The large furniture retailers have created cut-throat competition among the limited number of manufacturers whose production is large enough to supply them.
In order to sell furniture today at the same prices as 20 years ago, certain quality compromises have been made in mass produced furniture, especially upholstered furniture.
Wood furniture does not have as much of a quality problem as upholstered furniture.
- For mass produced wood furniture, advances in automated technology and much larger scale production have increased efficiency for lower priced mass produced products.
- Lower cost wood furniture, in many cases, is superior to the quality made 20 years ago when more of the work was done by hand.
- Higher quality wood furniture, made by expert craftspeople, does cost more now than it did 20 years ago.
Manufacturers and retailers are well aware of the massive costs they could be exposed to because of lower quality furniture products.
On the other hand, retailers are also aware that popularly priced furniture which needs to be replaced every 5 years is more profitable over the long term than furniture that lasts 10 years or more.
- More profitable unless the cost of warranty claims and repairs overwhelms the financial benefits of selling more furniture.
Repairing defective furniture is expensive and disruptive to the normal manufacturing and selling processes.Taking care of warranty claims is neither profitable nor enjoyable for manufacturers and retailers.
- Manufacturers have traditionally reacted by structuring warranties so that there are very few potential problems that are actually covered.
- Retailers used to follow the same logic, but have recently evolved into a far more profitable solution.
Over the past decade, furniture retailers have transformed warranties from a significant negative cost on their income statements and balance sheets into a highly lucrative profit center.
Introducing the extended warranty.
Extended warranties have been available in the furniture industry since the 1980s, but were not fully weaponized until the past decade.
When purchasing furniture over the past few years, it has become almost impossible not to buy an extended warranty.
Whether you are purchasing furniture in a store or online, the pressure to add an extended warranty is almost overwhelming.
The basic pitch is that:
- Without the extended warranty, you have no recourse for any problems that might occur.
- With the extended warranty, you have complete protection for almost anything that can possibly go wrong.
The language of the warranty seems to confirm this - all the way up to the point where most people stop reading the warranty document.
If you read the entire warranty document, and understand the legal and furniture industry terminologies, the sad reality is that it offers very little protection for anything that is likely to go wrong.
From the retailer’s viewpoint, the extended warranty is a “win-win” product. They make substantial profits for doing nothing.
- The retailer does not stand behind the extended warranty.
- Although the retailer receives a substantial portion of the money you paid out, they have no responsibility for servicing claims.
- Even better, it completely eliminates all of the costs the retailer used to incur for servicing warranty claims.
Extended warranties transfer responsibility for servicing customer claims to a 3rd party insurance-type company.
- That 3rd party (which is not a furniture company) is who you contact if you need to make a warranty claim.
This can be confusing to the customer.
Manufacturers' warranties do not apply if you are covered under an extended warranty.
Extended warranties do not apply if the manufacturer’s warranty is in effect.
It is not unusual for consumers to find themselves bounced from one warranty to the other. Determining who is actually responsible for the warranty coverage is not always obvious.
The company responsible for servicing your extended warranty can only make a profit if the cost of servicing customers is less than the amount they receive.
Manufacturers do not receive any of the money you pay for your extended warranty.
- Their warranty costs have to be built in to the low profit margins they make when selling to the retailers.
- As a result, manufacturers are careful to craft warranties so that they have very little exposure to anything that might result in a significant cost.
Manufacturers do take responsibility for repairing (or replacing) products with provable manufacturing defects.
- Proving that a product is "defective" in a way that is covered by the warranty can be quite difficult.
- Customers are often responsible for shipping costs. They may also be responsible for labor costs.
- The cost of shipping and labor is typically far more than the cost of replacing a damaged part.
The cost of cartoning and shipping large pieces of furniture can be prohibitively expensive.
Even the cost of shipping small items can be surprisingly expensive. For example:
- Shipping a set of replacement seat cushions will cost at least $100 and could cost over $200 for individuals without access to special shipping rates.
Retailers earn a sizable profit on your extended warranty.
- According to ConsumerAffairs.com this can be 200% or more.
- About half of this amount will go to the 3rd party actually servicing the warranty.
- The other half is pure profit for the retailer.
- The 3rd party insurance company servicing the warranty needs to make a profit on only 50% of what you paid.
Keep in mind that if the furniture store thought they could make a profit servicing the warranty for the amount they pay the 3rd party, they would have kept the entire amount you paid and serviced the warranty themselves.
Extended furniture warranties are different from extended warranties for cars, appliances or electronics.
- Car companies keep the full amount you pay and do the servicing themselves.
- Electronics and appliances have predictable, fixed costs and a very predictable lifespan.
- Even with these advantages, most experts who study extended warranties do not recommend them.
- From an economic perspective, the cost of an extended warranty for cars, appliances and electronics is rarely worth the cost.
- For furniture it is never worth the cost.
The only way for an insurance company to make a profit on an extended furniture warranty is by:
- Rejecting as many claims as possible.
- Reducing costs as low as possible.
Eliminating potential claims is the most important factor in making profits.
Extended warranty providers are experts at this.
Extended warranties always include clauses that they do not cover anything covered under another warranty.
This can include denied claims under other warranties.
Example 1: You call the extended warranty company to fix a sofa with a broken (non-removable) leg. They will immediately refer you to the manufacturer’s warranty.
The manufacturer agrees to repair the broken leg, but points out under their warranty you are responsible for all shipping and labor costs after the first year. These costs amount to several hundred dollars.
Because the problem was covered under the manufacturer’s warranty, it is ineligible for the extended warranty coverage.
Example 2: The manufacturer rejects your claim for warranty coverage of the broken leg on the grounds that an inspection indicated “customer abuse,” a term that can be applied for many different reasons.
The extended warranty does not apply for the same reason.
Extended warranties exclude coverage for anything that falls under the jurisdiction of the manufacturer’s warranty.
This applies whether or not the manufacturer accepts or denies the claim.
When you purchase an extended warranty your salesperson will tell you all of the things the warranty covers.
They will never tell you about what the warranty does not cover.
Wayfair’s advertises its extended warranty as covering “accidents, common malfunctions, and product failures from normal use.”
This is further defined as “Coverage for accidents (like stains, rips, burns, and chips) and coverage for common malfunctions (like broken hardware and seam separation).”
Wayfair's SquareTrade Protection Plan includes a paragraph stating that its coverage includes:
- where the problem occurs as a result of normal use of the Product, as follows: seam separation; broken hardware and pulls; separation of joints and welds; structural defects to frames, cases, seat or back construction; broken hinges, casters, slides, drawer pull/guides or swivels; and damaged mechanical elements.
Taken together, the coverage listed above sounds pretty comprehensive. But that is before any exceptions have been listed.
Here is a list of exceptions taken from Section 8A of the SquareTrade contract. The title of this section is, WHAT IS NOT COVERED. My annotated notes are underlined.
(A) Except as otherwise provided, normal wear and tear;
The term “normal wear and tear” is used to exclude the most common problems that customers are likely to encounter. It includes worn out cushions, loss of foam resiliency, worn out or peeling fabrics and many other problems that customers think are covered.
(B) Any and all pre-existing conditions that occur prior to the Coverage Start Date of this Protection Plan;
(C) Natural flaws or inherent design or manufacturer’s defects;
For upholstery this can exclude frame or foundation problems, fabrics that fall apart and cushions that collapse. For wood products this can exclude: delamination of wood or plastic surfaces, staples that pull out, fasteners that loosen, warpage and many other problems.
(D) Intentional damage;
(E) Lost, stolen or irretrievable items;
(F) Any Product that is fraudulently described or materially misrepresented;
(G) Secondary or collateral damage;
(H) Except as otherwise provided, maintenance, service, repair or replacement necessitated by loss or damage resulting from any cause other than normal use, storage and operation of the Product in accordance with the manufacturer’s specifications and owner’s manual;
This is a wonderful clause. Paragraph (A) excluded coverage of damages caused by “normal wear and tear.” Here we are excluding “loss or damage resulting from any cause other than normal use.” The extended warranty will not cover any repairs that you have attempted yourself or had done by other professionals. This includes damage or stains that were not removed by professional cleaning services.
(I) Damage caused by exposure to weather conditions, improper electrical/power supply, improper equipment modifications, add-on products or accessories, attachments or installation or assembly, collision with any other object, vandalism, animal or insect infestation, corrosion, battery leakage, act of nature (any accident caused or produced by any physical cause which cannot be foreseen or prevented, such as storms, perils of the sea, tornadoes, hurricanes, floods and earthquakes) or any other force majeure or peril originating from outside the Product;
Many people who purchase extended warranties often think it will protect them in case of hurricanes, floods etc. It does not.
(J) Damage caused by “accumulation,” including, without limitation, damage from any repeated use or gradual buildup of dirt, dust, oils or similar, such as hair and body oils, perspiration or darkened bodily contact areas;
(K) Damage caused by: any improper care, negligence, neglect, intentional acts, misuse or abuse of the Product; any repair, replacement or handling of the Product other than as recommended or authorized by the manufacturer and/or Us; or any failure to comply with the manufacturer’s warranty;
This clause can exclude coverage for many reasons you may not associate with negligence or abuse. A few of these may include: damage related to smoking, using common fabric protection or cleaning products, damage caused by pets or unsupervised children, and more.
(I) Damage caused by cleaning methods, products or materials;
Damage caused by not cleaning or maintaining the product will be excluded elsewhere.
Paragraphs J through L refer to non-furniture products and have been left off this article.
(M) Defects due to the installation, assembly or hookup of Your Product;
(N) Damage caused by transit, delivery, redelivery, removal or reinstallation of the Product, or the Product being moved between different locations or into or out of storage, including damage caused by packing or unpacking of the Product;
A significant percentage of customer complaints relate to damage related to these causes. They are not covered.
(O) Claims made under any improperly or incorrectly purchased Protection Plan;
(P) Except as otherwise provided, “cosmetic damage,” defined as any damages or changes to the physical appearance of a Product that does not impede or hinder its normal operating function as determined by Us, such as scratches, abrasions, peelings, dents, kinks, changes in color, texture, or finish or similar conditions;
This is important. Many salespeople selling extended warranties (and many marketing materials) will specifically tell you that these damages are covered. They are not.
Paragraphs Q through U refer to non-furniture products and have been left out of this article.
(V) Except as otherwise provided, any product used for heavy commercial, educational, rental or industrial use;
(W) Product(s) with removed or altered serial numbers;
(X) Manufacturer defects or equipment failure which is covered by manufacturer’s warranty, manufacturer’s recall or factory bulletins (regardless of whether or not the manufacturer is doing business as an ongoing enterprise);
It is not unusual for furniture manufacturers to be out of business or have the name sold to to a new owner. Extended warranties do not cover you in that case.
Paragraphs Y and Z refer to non-furniture products and have been left out of this article.
(aa) Items sold in a private sale (e.g. flea market, yard sale, estate sale, Craigslist);
(bb) Any Product that is a demonstration/in-store model, or that is sold “as-is”;
(cc) A Product that is no longer in Your possession;
(dd) Any failure, damage, repairs or loss that is covered under any other protection plan, warranty, service plan or insurance.
Anything covered by your manufacturer’s warranty is excluded from this coverage.
Additional exceptions and exclusions are listed in Section 8C of the extended warranty:
(A) Products made of “X” coded fabric, dry cleaning only fabric, non-colorfast fabric or silk fabric;
(B) Natural flaws, inherent design defects or manufacturer’s defects, including, but not limited to, natural inconsistencies in wood grains, fabrics, coloring or leathers; wood stains; delamination of microfiber; manufacturer’s defects of leather or upholstery;
(C) Stains caused by from incontinence, hair and body oils, perspiration, paints, dyes, bleaches, flooding, rust, fire (including cigarette burns), smoke or other caustic materials as determined by Us;
(D) Damage caused the application of topical treatments to the Product;
This includes fabric protection or cleaning products.
(E) Damage to the Product caused by gum, mold or mildew, fading, color loss, non-stain related discoloration, dust corrosion or similar;
Almost all claims related to fabrics will be disqualified.
(F) Odors, pet or animal damage from teeth, beaks or claws;
(G) Splitting, cracking and/or peeling of A&P leather, bonded leather, bycast leather or coated fabrics;
Peeling bonded leather is such a major problem (and so expensive to repair) that it gets its own exclusionary clause. The other terms used here are sometimes used to describe bonded leathers.
(H) Scratches of any type;
Many salespeople and marketing materials will tell you this is covered.
(I) Loss of resiliency;
This is the number one complaint for upholstered furniture owners. Cushions on popularly priced couches typically wear out within 3 - 5 years. For larger individuals (or especially cheap sofas) they may wear out even faster. This is especially significant for reclining furniture or couches with non-removable seats and backs. When the foam loses resiliency, the furniture becomes uncomfortable (and may look worn out.) Most people buy new furniture rather than pay the cost of replacing worn out foam.
(J) Separation of seams along mattress seam lines.
This is the most common complaint about mattresses that have passed the trial period allowed for free returns.
Section 6 of the SquareTrade extended warranty includes still more restrictions:
Depending on the Product and failure circumstances, at Our discretion, We will either:
Repair Your Product (on-site, mail-in or local repair service may be available, in Our discretion);
Replace Your Product with a product of like kind, quality and functionality (replacement products may retail at a lower price than Your original Product); or
Provide a cash settlement or a Gift Card reflecting the replacement cost of a new product of equal features and functionality up to the Coverage Amount.
If We elect to repair Your Product, We will, at Our option,
(1) provide cleaning or repair advice,
(2) mail You a stain removal kit, including products to aid in stain removal,
(3) mail You a parts kit to replace missing or broken parts and/or
(4) arrange for on-site service as described below.
Please note that We cannot guarantee that any such repair or replacement will result in exact matches (such as color matches) with the original Product due to differences in dye lots, natural grains, external conditions or other similar reasons.
Extended warranties have become an important profit center for retailers over the past decade. It has the highest profit margin of any product sold in the store.
Salespeople are instructed to push hard to add these warranties on to every sale. They receive a substantial bonus for each extended warranty sold.
This creates a tremendous incentive for sales personnel to oversell the warranties, exaggerating the benefits and completely ignoring exceptions and exclusions.
Extended warranties are one of the three most common types of complaints cited in furniture reviews. (The other two are worn out cushions and bonded leather.)
Most furniture purchased online or through major retailers are now sold with extended warranties.
In addition to an extended warranty you will also be protected by a manufacturer’s warranty.
The manufacturer’s warranty is designed so that it appears to offer tremendous benefits to furniture purchasers.
An equally important function is to shield the manufacturer from potential service, repair and replacement costs.
Manufacturers have a different perspective than extended warranty companies.
Negative reviews do not affect Extended warranty companies. Complaints are always directed at either the retailer or the manufacturer - never the extended warranty provider.
Manufacturers are more sensitive to negative reviews that can result if their warranty practices appear to be too restrictive.
Although manufacturers also use exceptions and exclusions to limit liability, they also use more subtle strategies.
Here is an example taken from Flexsteel Upholstery:
Upholstered Furniture Limited Warranty Information
Lifetime Limited Warranty
Seat cushion foam
Five-Year Limited Warranty
One-Year Limited Warranty
Pillow fiber filling
Reading through this part of the warranty makes it appear that Flexsteel is standing very strongly behind its products.
There’s even a lifetime warranty on important parts, including cushions.
Cushions are a major source of complaints for mid-priced upholstered furniture.
Many customers specifically look for long lasting cushions before purchasing.
Very few people read beyond this part of the warranty. The next part is headed:
The first paragraph states:
“Flexsteel products are not warranted against wear and tear or damage resulting from neglect, abuse, misuse, rental or commercial use, pets, extreme temperatures, exposure to sunlight, chemical treatments, excessive soiling, accidents, or improper storage, care, or cleaning."
The furniture is not warranted against “wear and tear.” This is usually interpreted by the manufacturer as meaning that any condition resulting from “normal use” is not covered.
This includes the most common complaint for sofa owners - Cushions that look or feel worn out after only a few years.
Cushion replacements are also excluded from warranty coverage by another clause:
“Slight softening and flattening of seat cushion foam and fibers as a result of normal use and aging is not covered under warranty.”
If that is not sufficient, there is another exclusion which states:
“Under normal use and conditions, cushions may lose up to one inch of the original height standard of the cushion foam core within the first year of use.”
If you call with a complaint that the foam core has lost more than one inch, you will run into another obstacle:
The foam is not the only thing inside the cushion. There is also a layer of fiber above and below the foam.
Proving that the loss of height was in the foam core and not caused by compression of the fiber is difficult and not worth the trouble.
Going back up to the top of the document - “seat foam” is listed under the heading of “lifetime warranty.”
This intentionally gives customers the impression that the cushions are so good they will last forever.
On the other hand, when the cushions wear out (a process that is indicated by “softening and flattening”) in the usual 3 - 5 years after “normal use.” they will not be covered.
Flexsteel’s list of exceptions and exclusions is nowhere near as comprehensive as the SquareTrade extended warranty discussed above.
Although Flexsteel takes great care to exclude cushion and foam replacement, it appears that many other important parts do have excellent warranty coverage including frames, springs, recliner mechanisms, etc.
But there is a catch!
- Hidden at the end of a paragraph relating to how a claim should be reported there is a small clause.
- After the first year of the warranty period, the purchaser is responsible for labor and shipping costs associated with returns and repairs.
Major parts such as frames, springs, mechanisms, etc. are unlikely to break down within the first year, unless they are damaged during the shipping or delivery process.
If the damage occurs during shipping or delivery, Flexsteel is off the hook. Either the shipping company or the retailer will be liable for repair or replacement costs.
If the damage occurs after one year, Flexsteel is also off the hook (mostly.)
The cost to you of shipping large upholstered pieces to and from a manufacturer’s factory, combined with the cost of labor, will be far more than Flexsteel's cost of replacing the damaged part(s).
At this point, you may turn to your extended warranty, which your salesperson told you “covers everything.” Unfortunately “everything” does not include issues covered under the manufacturer’s warranty.
Since you have the option of shipping your furniture off to the factory, it is still covered under that warranty.
The extended warranty does not apply.