Your Product Warranty Is a Federal Case: Full vs. Limited, Implied Warranties, and As-Is Sales Under Magnuson-Moss

Fourteen months ago, you sold a customer a $1,800 piece of equipment with a one-line promise on the invoice: "1-year limited warranty." Now she is emailing you demanding a full refund, quoting phrases like "implied warranty of merchantability" that she definitely did not learn from you. You are confident the warranty expired two months ago and the word "limited" protects you.

Are you sure? A federal law from 1975 has opinions about your invoice — about the word "limited," about what you promised without writing anything down, and about whether "as-is" means what you think it means. This guide walks through what the Magnuson-Moss Warranty Act actually requires of small businesses that sell consumer products, the mistakes that turn a $200 repair into a legal bill, and a practical checklist to get your warranty language right.

The Federal Law Behind Every Consumer Warranty​

The Magnuson-Moss Warranty Act is the federal law governing written warranties on consumer products — tangible goods normally used for personal, family, or household purposes. It has applied since 1975, and the Federal Trade Commission enforces it.

Here is the part most small sellers misunderstand first: the Act does not require you to offer a written warranty at all. You can sell a consumer product with no written warranty whatsoever, and Magnuson-Moss has nothing to say about that choice. But the moment you do offer one — a warranty card in the box, a "2-year warranty" badge on your product page, even a written promise on an invoice — the Act switches on and dictates how that warranty must be labeled, what it must disclose, and what you are forbidden from putting in it. State law covers oral promises; only written warranties on consumer products fall under the federal Act.

Two dollar thresholds decide which duties apply:

• More than $10: the warranty must be titled either "full" or "limited."
• More than $15: the warranty must also meet the federal disclosure requirements and be made available to shoppers before the sale.

Below those amounts the Act largely leaves you alone, but state implied-warranty law still applies — more on that below.

"Full" vs. "Limited": The Label That Chooses Your Obligations​

Every written warranty on a consumer product costing more than $10 must carry one of two titles, prominently — not buried in fine print. The label is not marketing. It selects a legal regime.

What "full" actually requires​

A warranty can only be called "full" if it meets the Act's federal minimum standards. In plain terms, a full warranty means:

• You fix defects without charge and within a reasonable time, and you cannot impose unreasonable conditions (like shipping a 90-pound product to another state at the buyer's expense) as a precondition.
• If you cannot fix the product after a reasonable number of attempts, the consumer gets to elect a refund or replacement.
• You may not limit the duration of implied warranties — the background state-law protections described below run their normal course regardless of what your warranty says.

That is a demanding package, which is why full warranties are rare in practice. Almost every warranty you have ever read — "3-year limited warranty," "lifetime limited warranty" — is limited. Extra words like "lifetime" or "bumper-to-bumper" are fine as long as the title contains the word "limited" (or "full," if you truly meet the standard).

Why your warranty is almost certainly "limited" — and what that lets you do​

A limited warranty does not have to meet the federal minimum standards, but it must clearly disclose its limits. The one big thing a limited warranty buys you: you may restrict the duration of implied warranties to the duration of your written warranty — for example, pairing a two-year limited warranty with a clause limiting implied warranties to two years. A full warranty can never do that. Whether your state honors such a restriction is a separate question (several states do not), but only a limited warranty can even try.

The practical takeaway: never call your warranty "full" as a selling point unless you have verified, term by term, that it meets every federal minimum standard. Calling an ordinary warranty "full" is itself a violation.

The Warranties You Give Even When You Write Nothing​

Even if you offer no written warranty at all, state law injects two invisible promises into every sale by a merchant. These are implied warranties, and your customers hold them whether or not you mention them:

• Implied warranty of merchantability. The basic promise that goods you are in business to sell will do what they are supposed to do and have nothing significantly wrong with them. An oven must bake at controllable temperatures; a space heater must heat without endangering the house. The law reads this promise into every sale automatically.
• Implied warranty of fitness for a particular purpose. The promise you make when a customer relies on your advice for a specific job. If a shopper asks for a pump that can drain a flooded basement and you recommend a model, you have warranted that model for that purpose — even if it works perfectly well for lighter duty.

Three things about implied warranties surprise sellers most. First, there is generally no fixed duration — instead, buyers typically have up to four years from purchase under state statutes of limitations to discover a defect present at sale and seek a remedy. That does not mean the product must last four years; it means it must have been of normal durability for its nature and price when sold. Second, used goods carry implied warranties too, calibrated to the product's type and price — a $400 used mower is promised to mow like a $400 used mower, not a new one — but only when the seller is a merchant dealing in such goods, not a private individual. Third, and most important for what follows: once you offer any written warranty, federal law forbids you from disclaiming implied warranties entirely. The same bar applies if you sell a service contract on the product.

Why "As-Is" Probably Doesn't Do What You Think​

"Sold as-is" feels like a universal shield. It is not. Start with the federal rule: if you offer a written warranty on a product, you cannot disclaim its implied warranties — stamping "as-is" on the same transaction does not override that. The written warranty and the implied warranties coexist, period.

What "as-is" can do is governed by state law, and states are strict:

• Some states do not allow consumer "as-is" sales at all. In those states, implied warranty obligations attach no matter what your paperwork says.
• Where "as-is" is allowed, the procedure is formal. Typically you need a conspicuous writing, in simple and concise language, delivered before the sale, that plainly tells the buyer the goods come with no implied warranty — mentioning merchantability by name in many states.
• A fine-print "as-is" line on the back of an invoice, shown after payment, generally fails everywhere.

If your business model depends on selling refurbished or open-box goods without warranty exposure, do not improvise this language. The disclaimer rules vary enough by state that a clause valid in one state is void in another, and several states effectively force merchants to stand behind used consumer goods at least minimally.

The "Use Our Parts or Void Your Warranty" Trap​

Few warranty mistakes are as common — or as clearly illegal — as the tie-in. A tie-in sales provision is any warranty term stating or implying that the buyer must purchase parts or services from a particular company to keep coverage. Examples: "use only our brand of filters," "service must be performed by an authorized dealer," or the famous "warranty void if removed" sticker over a screw hole.

With narrow exceptions, these provisions are prohibited. Unless you provide the specified parts or services for free or hold a waiver from the FTC, you cannot condition warranty coverage on brand loyalty. The FTC has warned major sellers of automobiles, cell phones, and gaming systems over exactly this language, calling out "warranty void if removed" stickers as illegal. The underlying principle is simple and worth internalizing:

• Merely using an aftermarket or third-party part does not void the warranty. If your customer installs a third-party battery and the screen later fails for an unrelated reason, the screen is still covered.
• But causation still matters. If that third-party part was defective or badly installed and caused the damage being claimed, you may deny coverage for the resulting damage and charge for the repair.

So audit your warranty cards, manuals, and packaging for phrases like "only," "authorized," "genuine parts required," or "void if." Replace them with causation-based language: damage caused by non-authorized parts or service is not covered, but using them does not terminate the warranty. That one edit removes most of your tie-in exposure.

Show the Warranty Before the Sale — Including Online​

For products costing more than $15, the FTC's Pre-Sale Availability Rule requires the full warranty text to be available to shoppers before they buy. Brick-and-mortar retailers traditionally comply with a binder or file of manufacturers' warranties at the counter. Online, the rule follows the transaction to the product page: the point of sale for an online purchase is where the customer clicks buy, so the terms must be reachable there — not hidden behind a post-checkout email.

Congress modernized this in the E-Warranty Act of 2015. You may now satisfy pre-sale availability by posting the warranty on the manufacturer's website, provided you also tell buyers on the product, packaging, or manual exactly where to find it and give them a non-internet way to obtain a copy (an address or phone number for a free mailed copy). Retailers may then supply the terms electronically at the point of sale. Note the asymmetry the FTC has emphasized: an online posting lets online sellers comply, but a physical store cannot comply merely by pointing at a URL — the terms must actually be available where the sale happens.

The related disclosure rule requires the warranty itself to be a single, clear document stating the essentials: who the warrantor is and how to reach them, which products and parts are covered and excluded, what you will and will not do, how long coverage lasts, any conditions, how the customer obtains service, and any informal dispute process. One complete document beats five scattered web pages.

Watch what your ads and salespeople promise​

An express warranty is not just the formal certificate. Advertising claims and oral statements by your staff can create express warranties under state law — and deceptive warranty advertising independently violates the FTC Act. "Never breaks down," "covers everything, no questions asked," or a salesperson's "oh yeah, that includes the battery" can all bind you. Train anyone who talks to customers to describe coverage in the warranty's own terms, and review your product pages for adjectives your warranty document would not defend.

Disputes: Why Small Warranty Fights Get Expensive​

The Act encourages informal dispute settlement — mediation-style mechanisms that resolve claims without court. You may even require consumers to use your informal process first, but only if you establish one that meets the FTC's standards and disclose it in the warranty. Done well, a fair, fast process (think: 40-day decisions, free to the consumer) defuses most disputes before lawyers appear.

Here is the incentive that makes compliance cheaper than defiance: a consumer who prevails in a Magnuson-Moss action can generally recover reasonable attorney's fees and court costs on top of the remedy. That fee-shifting turns a $300 part into a five-figure loss if you stonewall a valid claim. The rational strategy is to make valid claims easy to win and invalid claims easy to document — which starts with clear warranty terms and a paper trail for every decision.

A Warranty Checklist for Your Business​

Work through this list once, then revisit it whenever you launch a product or rewrite your terms:

1. Decide whether to offer a written warranty at all. Remember that "none" is legal — but implied warranties still apply, and the marketplace may punish silence.
2. Title it "limited" unless you have verified every federal minimum standard. If the word "full" appears anywhere in the title, every standard must be met.
3. Put the whole warranty in one clear document covering warrantor identity, covered and excluded parts, duration, conditions, how to get service, and any dispute process.
4. If it is limited, decide whether to limit implied-warranty duration to match — and confirm your states honor that limitation.
5. Strip out tie-in language. No "genuine parts only," no "authorized service required," no "warranty void if removed." Use causation-based exclusions instead.
6. Make the text available before the sale: binder or file in-store, linked terms on every online product page, plus the website-plus-offline-access combination the E-Warranty Act allows.
7. Fix "as-is" papertrail where you sell used or refurbished goods: conspicuous, plain-language, pre-sale — and never alongside a written warranty on the same product.
8. Train sales staff and audit ad copy so nobody promises coverage the document does not contain.
9. Set up a simple informal dispute process and actually follow its timelines.
10. Track every claim in your books. Log warranty repairs and replacements under their own expense accounts rather than burying them in general repairs or cost of goods sold. Over a year, that ledger tells you your true claim rate per product — the number you need to price future warranties, negotiate with suppliers over defective batches, and set aside a realistic reserve for claims still to come. Watching those costs accumulate in one place, for instance on a Fava dashboard, is often the first warning that a "reliable" product is quietly eating your margin.

That last habit is the bridge between legal compliance and financial control. Warranty work is a real cost of selling goods, and businesses that track it separately make better decisions about pricing, suppliers, and how generous the next warranty generation can afford to be. If you are setting up those accounts for the first time, the documentation walks through organizing a plain-text ledger so warranty expenses stay visible instead of dissolving into miscellaneous.

Keep Your Warranty Costs — and Your Books — Under Control​

Getting your warranty language right is half legal hygiene and half financial discipline: clear terms keep disputes small, and clean records keep warranty costs visible. Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data — no black boxes, no vendor lock-in. Get started for free and see why developers and finance professionals are switching to plain-text accounting.