DW's Blog

Product and Service Guarantees

by webmaster — August 7, 2019

A guarantee is a company’s commitment to the well-being of its customers.

There’s no guarantee of keeping a customer for life. Though having an unconditional product and service guarantee can go a long way in keeping your base of loyal primary shoppers. A guarantee is a promise or assurance that a company will stand behind the quality of products it sells or services it performs. Guarantees build trust and loyalty with consumers. In a sense, a guarantee is a company’s commitment to the well-being of its customers.

5 Reasons Why A Guarantee Works

First, it pushes the entire company to focus on customers’ definition of good products/service, not an executive’s assumption. Second, it sets clear performance standards, which boost employee’s performance and morale. Third, it generates reliable data (through payouts) when performance is poor. Fourth, it forces an organization to examine its entire service-delivery system for possible failure points. Last, it builds customer loyalty, sales and market share.

What is a good guarantee? It is (1) unconditional, (2) easy to understand and communicate, (3) meaningful, (4) easy and painless to invoke, and (5) easy and quick to collect on.

Cheating. Fear of customers cheating is a big hurdle for some when considering offering guarantees. Sure, there will be cheats—the handful of customers who take advantage of a guarantee to get something for nothing. What they cost the company amounts to very little compared to the benefits derived from a strong guarantee. Too often management worries about the 1% of people who might cheat the company instead of the 99% who don’t.

The cost of providing an unconditional product and service guarantee is far less than the cost of replacing a dissatisfied unhappy customer. Perspective.

Read More – What’s your guarantee?

Filed Under: DW's Blog

2 responses to “Product and Service Guarantees”

  1. Mary says:

    I really like this idea. We pretty much do this, although we haven’t ever posted it.
    Here’s my question: are you recommending this just for things the store has control over, such as perishables, deli items, etc? Or are you also recommending covering things like a bar of soap or a can of beans, etc? Thanks for clarifying!

    • Adam Zack says:

      Hi Mary. Sorry for the delay in getting back to you. I strongly believe in 100% satisfaction guarantee for everything they buy. I liken it to the Nordstrom philosophy on returns. They pretty much take back anything no questions and it reinforces their customer service commitment. I think it also allows them to operate at a higher profit margin. Of course, you will have some people who unscrupulously take abuse the policy, but if you have good controls – return form with their name and phone number that are reviewed by the store manager regularly – you can keep it as a very positive point of differentiation from your competition.

      If you have questions or want to discuss further, you can email me at or call me anytime at 760-831-9644.



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