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Extended Warranties Can Extend Profits
Stretching service life proves to be a lifesaver for customers.


Oleg Cherepahin, a technician in Mack's repair department.

A customer rides home from the specialty photo store with a new DSLR. She places it on her lap gingerly--like a little girl who just unwrapped a porcelain doll for her birthday. As she gets out of her car, the camera tumbles off her lap, rolls into oncoming traffic, and is flattened by a big Mack truck.

Yikes.

If it's within the first year of the date of purchase, she probably has the standard one-year DSLR manufacturer's warranty for parts and labor. But what if this happened on day 366?

That's why an extended warranty can be a lifesaver. Enter Mack Camera and Video Service of New Jersey. Established in 1938, the company has grown into one of the largest independently owned and operated repair centers offering extended warranties in the U.S. They're one of the first authorized warranty repair services for such companies as Polaroid, Kodak, Sony, Canon, and Nikon.

Retailers can become an Extended Contract Dealer by filling out the online application (www.Mackcam.com/servicecontracts/become-an-authorized-dealer.htm). Mack emails the dealer a price list and further instructions. There are no complicated contracts. The dealer's word, or as Mack's CEO MEL KEVOE puts it, "a Jersey handshake," is good enough.

Kevoe believes the lack of a contract between Mack and participating dealers is better. "It keeps us on our toes to deliver the very best work to our dealers," adds Kevoe.

But he also knows Mack's value to them. "The uniqueness of our warranty: Most others are through administrators where they send out the items," says Kevoe. A customer in that case won't know where his item is going.

Mack has an in-house customer service and repair division with 16 technicians. "Customers can talk to the service department over the phone to see if the problem is as simple as formatting a memory card or changing batteries," says JENNIFER MONASTERIO, Mack's president. "This saves time and money."

Mack's extended warranties are sold nationally and internationally, and customers can register online. When it's time for repair, customers can then refer to the website to send their item and watch repair status. "We try to make the process easy," says Monasterio.

A customer can also buy an extended warranty at a different location from where the item was bought if it's within 30 days of purchase and there's a valid proof of purchase.

Still, warranties are usually bought at purchase time. They begin the day after the manufacturer's warranty ends, are offered for three or five years, and don't limit the number of repairs. Kevoe says the contracts are becoming more popular with customers and offer the dealers a great option for added revenue.

"Cameras are expensive," he says. "People are willing to spend more today than in past years. You can make more of a profit from this than from selling a camera."

The popular new Diamond warranty is well-suited to DSLR buyers, including two cleanings during the three-year contract and covering accidental damage. "DSLRs are known for dusty LCD screens, so those customers like it best," says Kevoe.

Warranty prices average to a little less than 8 percent of the value of the camera. Cheaper cameras drive this number up. "Dealers get a pretty decent markup," says Kevoe. "We have a formula based on averages that looks at cost of repairs and price per unit."

Mack doesn't just cover DSLRs. The contracts can cover audio/video equipment, computers, lamps, televisions, GPS units, 35mm cameras, digital accessories, used equipment, and medium-/large-format cameras by manufacturers like Hasselblad, Mamiya, and Leaf.

It isn't as difficult as it seems for a repair company to keep up with dynamic technology. "A lot of the adjustments we have to make are color adjustments--CCD, color balance, brightness, density--those types of things," says Kevoe. "It's like tuning TVs. Once you do it, it's pretty much the same for each model." Mack Camera will be making its first appearance at photokina this September.

Another N.J.–based repair center offering extended warranties is RepairTech of Iselin. Consumers can inventory their photography equipment at the online warranty registration center (www.repairtechinc.com). RepairTech offers two free cleanings and a 21-point diagnostic check for digital cameras, camcorders, lenses, and SLRs with an extended warranty. The company also offers coverage for most products for up to five years.

The company doesn't do repairs in-house (it has service repair centers around the country, with most repairs completed in three to five days, as well as a service-provider program). Authorized dealers are invited to become members of its reseller program to offer its warranties. They can sign up for the Participating Dealer Agreement online.

The Platinum Plan is the company's flagship service--customers can service product at any of several thousand repair centers nationwide. It also features a free loaner program while the item is under repair. Its PRP plan provides replacement of any defective electronic product and has no service center involvement.


   







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