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Printer manufacturers are keen to encourage printer sales by any means necessary and – is Lexmark breaking the law in the process?

Issue #0908/1 – Over the past few weeks the desperation of printer manufacturers to keep volumes of new printers flowing has become increasing clear. Almost every day, new emails arrive from resellers containing details of discounts and special offers on a variety of models. Manufacturers are also offering a range of benefits directly, almost all of which are currently scheduled to expire at the end of March.

Brother 3yr WarrantyBrother 3yr Warranty
Konica Minolta 3yr WarrantyKonica Minolta 3yr Warranty

While these measures are short-term, a number of them have long-term implications for both customer and manufacturer (promotions vary by country and region).

Canon 3yr WarrantyCanon 3yr Warranty

For instance, Brother, Canon and Konica Minolta are all offering an extended three-year warranty on selected models (Konica Minolta – all colour printers and MFPs. This is great for users, meaning that if the device does fail it is covered for the typical minimum period of ownership. However, for the manufacturer, this means a long-term commitment that they may not wish to continue to honour once this period of economic uncertainty has passed. They will, of course, have to honour the commitments made but, for each of these manufacturers, that should not be an issue – all are reputable manufacturers with quality hardware in their stable.

Lexmark 5yr WarrantyLexmark
5yr Warranty

Going one step further, into dangerous ground, is Lexmark. This manufacturer has opted to offer a five-year warranty on its Professional Series inkjet AiOs. This is dangerous because Lexmark has an appalling reputation for hardware quality, reliability and durability – especially on its inkjet products.

On more occasions than I could count, printer users have said to me that they will never [again] buy a Lexmark inkjet device. When questioned, this is always either because of bad experiences or because of the hardware’s poor reputation. Although the new generation of hardware from Lexmark is quite clearly more robust than its predecessors, for it to be 5-year’s-worth more reliable is highly dubious and potential customers cannot be blamed for being very wary and steering clear of Lexmark hardware!

Customers must accept that buying a Lexmark now, even with its 5-year warranty, could land them in an unprotected position. Right now, Lexmark is looking very vulnerable, with the strong possibility that it could be the subject of a takeover. For customers, this would probably be the best possible outcome as existing warranties would have to be honoured but the new owner would be in a position to remove the blighted Lexmark name and improve the quality of the hardware for the future. It is highly unlikely that any buyer of Lexmark would continue with this extended warranty offer but it would provide an ideal opportunity to offer existing owners the opportunity to turn in old Lexmark branded hardware for new hardware under the new brand.

If, on the other hand, Lexmark actually failed altogether, customers could be left high and dry with no warranty cover and having to rely only on third party supplies to keep their existing products running (perhaps not such a bad thing – it would, after all, reduce their Total Cost of Printing from Lexmark’s high levels).

Lexmark also has another offer running in parts of Europe that is designed specifically to take old hardware off desks and replace it with new hardware. The benefit to Lexmark here is that it keeps newly manufactured hardware moving and avoids a build-up of unsold inventory while reducing the demand for old supplies, which could, hopefully, be discontinued, thus reducing manufacturing and administrative costs.

Lexmark Trade-In promotionLexmark Trade-In promotion

This offer is available to end users only and is based on the cashback principle, offering anywhere between £45 (C54x colour laser printer range) and £500 (X658 and X646 MFPs), tax inclusive, in the UK depending on the model purchased. In Germany, the cashback values are much, much bigger – between €129 and €1,200.

End users could claim the cashback on up to 10 units of each eligible product, potentially meaning that, with 24 eligible products in the list, a large company could take advantage of the offer on a significant number of devices.

While an effective discount of between 14% and 29% off the hardware purchase price in the UK sounds like a reasonably attractive deal in the UK, and anything up to 46.5% in Germany is exceptionally attractive in Germany, is there actually a rather nasty sting in the tail?

Lexmark notes that “The Trade-In Allowance is a cashback which you can use however you want for your business or you can use it to recycle your old printer”. The real sting is that, while this is a trade-in deal, Lexmark takes absolutely no responsibility for the hardware being traded in!

The Terms and Conditions of the Lexmark Trade-In Allowance Promotion state:
“The participant will be responsible for contacting the original equipment manufacturer or TechProtect and any costs associated with the recycling of their old printer will be the responsibility of the participant.”

Furthermore, “To the fullest extent permitted by law Lexmark shall have no liability whatsoever to any participant in this promotion in respect of this promotion.”

Therefore, this is not a trade-in deal at all. It is merely a cashback deal – but the implication of calling it a trade-in is that the customer is not allowed to retain and continue using the old hardware, because it is the subject of a trade-in, but is obliged not only to recycle it but also to pay for it to be recycled.

This obligation would appear to be directly in contravention of the European WEEE directive. The guidelines for manufacturers of electrical equipment clearly state (taken from the UK’s Environment Agency web site):

  • “If your product uses electricity for its main purpose, then it’s likely to be covered by the WEEE Regulations and you’ll need to comply.”
  • “If you need to comply and you aren’t currently a member of a compliance scheme, you are breaking the law.”
  • “You need to finance the cost of treating and recovering the types of products you import, rebrand or manufacture.”

So, firstly, in the UK at least, it looks as if Lexmark is breaking the law by not being a member of an approved compliance scheme for WEEE – no reference to membership can be found.

Secondly, Lexmark is responsible for the funding of any product directly replaced by a new piece of hardware (under a trade-in scheme) – not the customer.

Assuming that the equipment involved is several years old – prior to 13th August 2005 (termed ‘Historical WEEE’) – the WEEE guidelines state:

  • “If historic WEEE from businesses is being replaced by new equivalent products, the EEE producer is responsible for financing the collection, treatment, recovery and disposal when supplying the new products.”

As this promotion is a ‘trade-in’ promotion, there can be no arguing that the new hardware is not an ‘equivalent’ product! It may be an MFP instead of a printer but it must still count as equivalent because it is being traded in.

Now, perhaps Lexmark is relying on the trade-in factor meaning that customers will replace relatively new equipment of other brands only with new Lexmark equipment – thus placing the responsibility for collection and recycling onto the other manufacturers. However, Lexmark specifically states that “… any costs associated with the recycling of their old printer will be the responsibility of the participant”

Either way, Lexmark appears to be refusing to take any responsibility for collecting or recycling any old equipment, its own or from other manufacturers, regardless of the age of that equipment.

Just to underline its complete denial of responsibility, Lexmark’s Terms and Conditions state, “To the fullest extent permitted by law Lexmark shall have no liability whatsoever to any participant in this promotion in respect of this promotion.”

Clearly Lexmark’s only objective here is to push as many hardware units into the market as possible so that it can claim higher shipments for the quarter in the hope of persuading investors and Wall Street that it is not in financial trouble.

Perhaps this information regarding Lexmark’s handing of its responsibilities is incorrect? But, from the user’s perspective, the guidance is clear:

  • “If you bought equipment before 13 August 2005, and are replacing it with new equipment fulfilling the same function, then the producer of the new equipment is responsible for the collection, treatment and recycling of the old equipment, regardless of whether they were the original manufacturer.”
  • “If you bought the equipment before 13 August 2005 and do not replace it, then you are responsible for financing and arranging treatment in accordance with the WEEE Regulations and existing waste management legislation, including the Duty of Care and the Hazardous Waste Regulations.”
  • “If you bought electrical equipment after 13 August 2005, then the producer of that equipment is responsible for its collection, treatment and recycling when you dispose of it.”

Thus, it is only when a business user disposes of equipment bought before 13th August 2005, WITHOUT REPLACING IT, that the user is personally responsible for the cost of disposing of that hardware. ESPECIALLY when Lexmark uses ‘trade-in’ as the terminology for the promotion, there is no escaping the fact that Lexmark as a company will be responsible for the collection and cost of recycling the old hardware and I, as a user, would expect a trade-in deal to include the supplier removing and dealing with the old equipment.

Interestingly, Konica Minolta is also offering a cash back deal on all of its colour printer and MFP models. Again, offers are only accessible to end users, are country-restrictive and also restricted to purchases through participating dealerships.

Konica Minolta CrunchBustersKonica Minolta CrunchBusters cashback offers

In the UK, for instance, these involve £100 cash back on the magicolor 5650 / 5670 / 4690 mf, £150 on the magicolor 4695MF and £200 on the magicolor 8650 / 7450 – amounting to discounts in the order of 9.5% to 17%, depending on the model. The Terms and Conditions of this offer are not at all onerous and there is no Trade-In involved at all.

In Germany, on the other hand, trade-in is a specific condition of the Konica Minolta cashback offer and the range of products included is much wider – ranging from the magicolor 1600W (€30) right up to the magicolor 7450II GA (€250), with several PagePro black and white printers and colour MFPs in the middle.

Konica Minolta Trade-In promotionKonica Minolta Trade-In promotion

Customers are able to trade in old printers and multifunction devices, which they have legally owned for at least six months and including inkjet devices, for a new Konica Minolta device.

Konica Minolta however, unlike Lexmark, not only takes responsibility for the hardware it is replacing but insists that the customer returns the old hardware by DHL using the returns sticker supplied when registering the new hardware online for the cashback promotion. Interestingly, Konica Minolta requires that all subsidiary materials are returned with the old device, if available – meaning CDs and manuals. This suggests that Konica Minolta may well plan to recondition the devices and sell them into developing markets and third world countries. This suggestion is reinforced by the fact that the company also insists that the product is in working order and capable of printing a test sheet when it is returned – non-functioning equipment will be refused.

At a different level, Brother is offering a 50-sheet pack of glossy photo paper free when customers buy either a colour ink multi-pack or a black ink twin-pack of LC970 cartridges.

From Dell, we find the typical discounts on offer – currently 30% off selected printers. Dell regularly offers significant discounts, so this instance is not unusual.

And finally, Oki in the UK has decided to extend its Tools for Schools ‘Born Free’ photo competition till the end of March. Currently, almost all of these special offers and promotions are valid till the end of March.

There will be other promotions available to customers around the world, so this is just a cross-section to give a flavour of the approaches being adopted as manufacturers fight for printer and MFP shipments. No doubt, there will be more offers and promotions as we move from March in to April.

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