ATM Components & Technology enters into extended warranty fray

July 31, 2011

This story is excerpted from “The ROI for a Better Warranty on ATM Components,” a white paper available for free download after registration.

Recently, ATM Components & Technology Inc., headquartered in Springboro, Ohio, announced its new 120-day warranty on remanufactured and reworked parts for third-party service companies for its line of parts for NCR and Diebold ATMs.

According to Mike Weikert, director of sales and engineering for ATM Components & Technology (ACT), a longer warranty provides a greater return on investment for third-party ATM service companies.

“A better warranty equals a better part,” Weikert said.

Ideally, of course, using the warranty would not be necessary, as the component would give many years of reliable service.

Jason Walker, ATM division director for Salt Lake City-based Hunt Enterprises, looks for a warranty to provide a comfort level when selecting parts. Hunt Enterprises provides consulting and maintenance services for security and ATM products and supports approximately 300 ATMs.

“The peace of mind that’s behind the warranty, that’s the main thing we look for,” Walker said. “Hopefully you don’t have to use it but inevitably you’re going to.”

Sourcing parts from a vendor that offers a long warranty, and is responsive when a warranty problem does arise, is vital to third-party ATM service providers. Providers may support machines hundreds of miles away from the nearest field service technician.

“Our customers aren’t right next door to each other. They’re spread out across three states,” said Eric Jensen, purchasing manager for Madison, Ala.-based Southern Technical Solutions, a third-party service provider. “If a technician drives a couple of hours to a machine and then doesn’t have a working part, he’ll have to come back or overnight it. These soft costs can kill your business.”

On refurbished parts, a typical warranty periods run from 30 to 90 days. With some service contracts, the maintenance provider pays the customer when the ATM is out of service.

“I’m tempted to spend the extra money because of the warranty issue,” Jensen said. “Offering lower cost refurbished parts with a longer warranty certainly positions us to secure more new customer business, more new contracts and keeps our existing customer base satisfied.”

Quality control

Jensen said he learned the high cost of cheap parts when he bought a dozen ATM cassettes from eBay. He said only about half of them worked properly, which caused problems for the service techs. A tech had to make a return trip to a site and the ATM was out of order for a day longer.

Brian Lucyk, vice president of central operations of Denver, Colo.-based Pendum LLC, a third-party provider of cash automation and ATM services that supports 27,000 ATMs, looks for a robust quality control program from a parts vendor.

In evaluating a parts source, Lucyk suggests looking for a company that does a root-cause analysis on every part failure and then does a corrective action on its process for that part.

“That way, you know you’re dealing with a quality part that is going to have the lowest probability of failure, not only at installation, but 18 months down the road,” Lucyk said.

ATM Components & Technology offers a longer warranty because they remanufacture parts versus relying on “tested working.” According to Weikert, that means each part has work instructions in place which instruct the tech how to disassemble the part, lists the parts that are automatically replaced and how the part is tested after the work is complete.

“When we get a part back, we don’t typically take it out of the box and inspect or test it,” Walker said. “We put it on the shelf, assuming it’s been refurbished, and we won’t worry about it. Then when we finally use the part, it’s nice to have a longer warranty for the time between getting the part and reusing it.”

Warranty period and fulfillment

When third-party service companies receive a part, the warranty clock starts ticking even though the item may sit on a shelf or in a service truck for weeks before it’s used.

“The average service company is lucky to get one inventory turn per year, so the average 90-day warranty doesn’t cover your float time,” Lucyk said. “With a 120-day warranty, there is a good probability you will use that part within the warranty period.”

For more information on this topic, visit out refurbished/used ATMs research center.


Topics: Components , Refurbished / Used ATMs , ROI , Service / Parts

Companies: ATM Components & Technology (ACT) , Pendum

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