What’s the State of the G. Loomis Flyrod Warranty?

[brian dunigan]

I haven’t been around to this site much in a while, but a couple years ago, Zach had done some of the best research out there on the state of the flyrod industry’s warranty programs.  Thus, I thought this site would be the place to ask where G. Loomis stands with its warranties now.

The Internet has been abuzz with a supposed change that G. Loomis is instituting – I’m not 100% sure, but it sounds to me like G. Loomis may be reneging on its promised warranty for its rods:

1.  They’ve increased the price for replacing a broken rod from $50 to $100 (that in itself is not a big deal – costs go up over time);

2.  They have decided not to honor the warranty any more for rods that are out of production; (this IS a big deal, since it seems to be coinciding with changes in the models they’ll have in production) and

3.  Xpeditor replacement is now a one-time deal rather than unlimited.

It’s unclear whether G. Loomis will still honor its warranty under the old pre-Xpeditor terms.  I know for a while they were saying they were going to fold their warranty replacement service into the Xpeditor system entirely, but I don’t know if that’s where we stand now.

So:  If you bought an older G. Loomis rod under the understanding that they would honor a lifetime warranty, have they now given you the finger?

It reminds me of Darth Vader to Lando in The Empire Strikes Back:  “I am altering the deal.  Pray I don’t alter it any further!”

Now, my question isn’t about THE WISDOM of lifetime replacement warranties like G. Loomis used to (?) offer.  It’s about a company making a promise of such a warranty, on a very expensive product, and then breaking the promise.

So is the talk I’m hearing correct that G. Loomis isn’t honoring its warranty any more under the original understanding?  If so, well – I love their rods, and I own four of them, but I’ll never, ever buy another one.  I wouldn’t feel like I could trust them any more to stick by their word about their products.

bd

[Zach Matthews]

Brian –

I highly doubt it.

[steve yates]

I bought an IMX G Loomis signature series from them years ago. When the company changed hands and the rod went out of production I pretty much thought I was toast on any warranty issues. The rods they make today are not a big favorite of mine anyway. I’m gonna ride it until till it blows up, not sure I would give them a $100 to replace it even if they would. ;D

[Zach Matthews]

Guys –

I have talked to Loomis.

[Mike Anderson]

I wonder how they plan to handle “guide rods”. Any idea how many of them get broken by careless clients…

This is going to be bad news for the high end rod.

[jarrod white]

Wow, that is bad news. I take good care of my equipment and infact have 3 orvis 5 wts that are 12 years old and have never been repaired. I also bought a pile of T3 and Helios last year and had some repaired over and over before giving up on them and switching to Sage. I have had clients snap a brand new rod (on a fish) the very first time out of the tube, but I can assure the manufacturers of one thing, if the warranty program gets sketchy, I will never put premium gear in the hands of a client again. I also will say that lots of times clients like the gear they use with us and in turn they go out and buy that same product. I guess the prices will be dripping also since you have no insurance so to speak ::)

[Corey Kruitbosch]

I guess the prices will be dripping also since you have no insurance so to speak ::)

You would think, but dont bet on it … I will be voting with my wallet and the best warranty will always weigh heavily into my purchase. I agree with Zach to a point… People should be careful with their gear, and not take advantage of the system.

I do have to say .. I really like the fact that you can order a new rod tip on the st croix website.

[trigg]

I believe they have also upped the price on their Xpeditor service and now exclude out-of-production rods. They aren’t specific, but your NRX Wild Card probably goes by the wayside when the NRX goes out of production also.

All in all, I think it a good thing for manufacturers to get better control of these programs.  Too many used rods “with warranty card” floating around the internet. Too many rods replaced with no questions asked outside the terms of the warranty. That ups the price for everyone. (But don’t hold your breath for a price decrease.)

I think a one-time replacement is a fair deal. But if they expect you to spend $700 for a rod, then the built-in insurance (which is really what it is) is a factor. Even if the rod goes out of production the next year. And with the copays (aka handling fees) getting to be $60 – $100  anyway, I can’t think it cost them much more to replace a tip section which is bound to be the majority of repairs.

Trigg (White)

[Zach Matthews]

The long and short of it is that we have all been getting a free ride.  If you actually read the warranty card that comes with every rod, it says “warranted against manufacturer defects” except in a very few no-questions-asked policies (like with TFO).  Frankly, a lot of the no-questions-asked policies are reflective of the original cost of the rod to the rod maker; it’s a lot easier to just hand over a new rod when you don’t have that much in one.

[jarrod white]

atleast wages are going up at that rate also 🙁

[Corey Kruitbosch]

Zach .. It seems pretty on-topic and I would be very interested to hear what the development costs of a high-end rod are. Is there any public information available, or do you happen to know, about what the cost of research, development, and production of a “typical” high-end rod? What is the profit % right out of the gate, if any?

[trigg]

The long and short of it is that we have all been getting a free ride.  If you actually read the warranty card that comes with every rod, it says “warranted against manufacturer defects” except in a very few no-questions-asked policies (like with TFO).  
Zach

Zach…

You seem to be suggesting that the manufacturers never intended to replace rods that were accidentally broken and that consumers have somehow been exploiting a loophole in fly rod warranties.

In fact, since Orvis’ “25 year Guarantee to repair or replace no matter the reason” (from their current catalog) which started before 1990, the manufacturers have offered and promoted “no fault” warranties. Winston’s web site says their rods are covered by their original owner “Unconditional Lifetime Guarantee against breakage or manufacturer’s defects.”  TFO, as you noted, describes their warranty as “no fault.” Sage is not quite so ebulient, but they list specific conditions that are excluded from their warranty–fire, theft, loss intentional breakage, etc. Accidental breakage is not excluded. Scott specifically says their warranty protects you if you “accidentally break a rod.”

My personal observation is that this built-in insurance (which is really what it is) enabled them to escalate rod prices above the $300 – $350 range where they were in 1990 to what they are today by taking some of the pain out of accidentally breaking a $500 – $600 – now approaching $800, somewhat fragile item.

And there are some features of most of these warranties that are decidedly consumer unfriendly. For example, they typically charge the consumer the same service fee (copay) to repair/replace a $150 rod as they do for a $700 rod. And they charge the same fee for repair of “defects in materials and workmanship” as for accidental breakage. The worst warranty I’m currently aware of is Fly Logic. They cover their rods only for “defects in materials or workmanship” (fair enough), but then they charge $75 to fix the fault in their own product.

There have no doubt been abuses by consumers. Rods are routinely repaired/replaced for other than the original owner, but primarily because manufacturers have not put in place the business controls needed to properly enforce this provision. We tend to applaud that as “outstanding customer service,” but it’s actually a disservice to all their customers.

In every other industry, extended warranties are a money maker–even when they are optional and sold separately rather than bundled in. If fly rod manufacturers are losing money on them, it indicates to me that they simply lack the business acumen to design and administer a profitable extended warranty program that covers their costs, minimizes abuse and provides for profit.

I do see some value in the changes Loomis is making.  It’s reasonable to replace a rod only one time–especially if they replace it for free rather than a $60 – $100 fee. And it makes sense not to cover a rod for the purchaser’s lifetime.  (Although limiting to rods currently in production leaves the purchaser holding the bag when the manufacturer discontinues the rod.) A warranty under those terms probably reduces purchase objections for an expensive rod enough to get the sale without taking on an open-ended liability, which is where the manufacturers have put themselves.

Sorry for the long post, but I believe your sympathy for the manufacturers is misplaced. They designed, promoted and sold these programs. If they haven’t been a business benefit for them, it’s because they did it poorly.

Trigg (White)

[Zach Matthews]

Corey –

I can give you a good estimate but no, I cannot tell you what the costs are.  But if you’ve ever worked in a shop of any kind, you know that typical margin in a retail environment is about 40-60% depending on the product.

Let’s assume a $600 high end fly rod.  The cost to the dealer of that rod would be between $240 (60% margin) and $360 (40% margin).

Since the dealer is really a middleman, what you’re seeing reflected in those original prices are the “wholesale” costs of the product, which represent the manufacturer’s expenses plus its profits.

This is where I don’t know the answer, because manufacturers don’t typically release their profit margins and all we can do is guess.  If the manufacturer makes the same profit margin as a dealer (i.e. 40-60%), then their original (i.e. manufacturing) cost on that $240 to $360 product would be $96 (60% margin on smaller figure) to $216 (40% margin on the higher figure).

However, that number isn’t nearly as fixed as the dealer margin; manufacturers have to pay for warranties (obviously), and also marketing, R&D, employee overhead, etc.

[Mike Anderson]

I think they’re going to be surprised at how many of their once happy customers won’t be returning unless they cut the built in lifetime warranty cost off the sticker price.

Loomis all but drove the nails in the coffin of a friend of mine’s well established Custom rod building business when they stopped selling blanks last year. He had been in business since 1975. Now this… This kind of stuff hurts lots of folks who have supported the company for many years.

[trigg]

This is where I don’t know the answer, because manufacturers don’t typically release their profit margins and all we can do is guess.  If the manufacturer makes the same profit margin as a dealer (i.e. 40-60%), then their original (i.e. manufacturing) cost on that $240 to $360 product would be $96 (60% margin on smaller figure) to $216 (40% margin on the higher figure).

That’s probably in the ball park.  Fly rod manufacturers don’t tend to be public companies, so their financials are not publicly available. But if you look at the financial reports for typical manufacturing companies, the “cost of sales”–which represents the direct labor and materials cost to manufacture the product–tends to run about 50% of revenue.

Trigg (White)

[jarrod white]

I also understand that it is a business decision , but also know that there are 2 kinds of decisions, good ones, and bad ones and this falls to the latter as far as I am concerned. I would say that if Sage or any one company will keep the same policy as always, they will take over the market. I think that would be a smart choice !!!!

[Zach Matthews]

Jarrod –

I think it’s a lot more likely that you will see no-fault warranties fall away in light of current economic conditions.

As for the prices of the rods, I suspect that we’re actually already benefiting from most companies operating their warranty departments at a loss.

[John S.]

That said, the companies have actually tracked these things and they tell me they’ve discovered some interesting facts about warranty use.  Most of us still do not use the warranty on a new rod.  However, the likelihood is that once a person uses a warranty once, they will often do so again and again.  Basically, a small number of anglers are breaking a large number of rods sold and their clumsiness is resulting in higher costs across the board.  Careful anglers are paying for careless anglers’ repairs via inflated prices.

Thanks for this info as I suspected most warranty repairs resulted from a select few repeating offenders.

[Zach Matthews]

Essentially the $145 serves the same purpose as a deductible on an insurance policy.

Correct: http://www.midcurrent.com/articles/gear/matthews_rod_warranties.aspx

Zach

[John S.]

Essentially the $145 serves the same purpose as a deductible on an insurance policy.

Correct: http://www.midcurrent.com/articles/gear/matthews_rod_warranties.aspx

Zach

Good article!

[Author]

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