The Warranty Dilemma: Marketing vs. Long-Term Liability

Let’s start by saying this isn’t a lecture—it’s a conversation. At Shark Grip Coatings, we’ve been proudly serving the refinishing industry since 1980. Presently, we are working with over 3,500 refinishing companies to provide top-quality products, training, and support.

Our goal is simple: to share what works and help businesses thrive in a competitive industry. Today, we’re talking about warranties—a key part of many refinishing businesses that, if mismanaged, can create long-term liabilities that threaten financial stability. But first, let’s address an often-unspoken reality.

The Elephant in the Room: The “Best Finish” Conversation

Let’s address a conversation that can make even veteran refinishers squirm: the fact that a fired-in-the-oven finish is inherently the best finish a bathtub will ever have. Yes, it’s true—and no, acknowledging this doesn’t diminish the value of refinishing.

Here’s the reality:

• Fired finishes, whether vitreous porcelain or lower-cost alternatives, are engineered to withstand decades of use. They’re baked in a kiln at high temperatures to create a bonded, durable surface.
• Even the most meticulous refinishing job, no matter how skilled the applicator or advanced the products, is a repair or refinish process—not a factory finish.

Refinishing: A Fantastic Alternative, Not a Replacement

Refinishing is about providing a high-value, cost-effective solution that extends the life of a bathtub by 10–15 years or more for 70% less than the cost of replacement. It solves real problems for homeowners and businesses alike.

Here’s how to frame refinishing:

• Set Realistic Expectations: Explain that refinishing is not a factory process but a transformative, long-lasting repair solution.
• Emphasize the Value: Highlight the cost savings and convenience refinishing offers compared to replacement.
• Educate on Proper Care: Provide clear instructions on maintenance to maximize the lifespan of the refinished surface.

“Think of it like this: even the finest repaint job on a classic car doesn’t make it ‘new’—but it still makes it look and feel incredible. Refinishing a tub is the same idea. It’s not a factory finish, but it’s a whole lot better than staring at chips and stains every day!”

Warranties and the Balance Sheet

Warranties aren’t just customer promises—they’re financial liabilities. For every warranty you offer, there must be an offsetting entry on the balance sheet to account for potential future costs of fulfilling that warranty.

For example:

• A $500 refinishing job with a 5-year warranty generates immediate revenue, which is recorded on the income statement.
• However, the warranty liability must also be recorded on the balance sheet, reducing equity until the warranty expires.

To safeguard your finances, consider creating a “warranty reserve fund”—setting aside a small percentage of revenue from each job to cover potential claims. This proactive measure ensures that unexpected expenses don’t disrupt your cash flow and protects the long-term stability of your business.

Balancing Customer Satisfaction with Business Sustainability

Refinishing businesses must strike a balance between providing peace of mind to their customers and managing long-term risks. Here’s how:

1. Set Realistic Expectations: A refinished bathtub can provide 10–15 years of great service, but it’s not invincible. Clear communication about proper care and maintenance goes a long way toward ensuring customer satisfaction and reducing warranty claims.
2. Align Warranties with Industry Standards: A 1–2-year warranty is more than reasonable, particularly when baked-in finishes on new tubs fail within five years.
3. Educate Customers: Offering care instructions, maintenance tips, and clear guidelines on warranty coverage helps set realistic expectations and reduces the risk of misunderstandings.
4. Track Warranties as Liabilities: Every warranty represents a long-term obligation that needs to be recorded on your balance sheet. This ensures you’re prepared for potential claims and helps maintain the financial health of your business.

In Closing: A Positive Message for Refinishers

By managing warranties wisely, setting realistic expectations, and delivering exceptional service, you can build a thriving business that virtually guarantees continual success and growth, while also enhancing the public’s perception of professionalism across the entire refinishing industry.

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Gary A. Goel