Lifetime Guarantees and FTC

In the mid-1920s, the major US pen manufacturers began offering competitive and comprehensive warrantees on their top-line models. The warranties or guarantees are reflected in model names such as Lifetime (Sheaffer), Endura (Conklin), and Eternal (Mabie Todd). While some manufacturers created special symbols denoting their guarantees like Sheaffer’s White Dot, Parker’s Blue Diamond, and Wahl-Eversharp’s Gold Seal.

Sheaffer

Walter Sheaffer was known to personally inspect every pen and place a small white dot on each that passed his quality inspection. In 1924, Sheaffer launched its Lifetime Warranty, symbolized by the white dot guaranteeing quality. The Lifetime Pen, launched in 1920, retailed at three times the price of competitor pens, yet Lifetime guarantee repairs were 4% of sales.

By the early 1940s, Sheaffer, Parker, and Waterman were suffering the effects of their lifetime guarantee. Having found that honoring the lifetime guarantee without a mitigating service charge was eating away at their profits, thus they began repair service fees. Naturally, their customers filed complaints with the government.

Federal Trade Commission

It is commonly believed that in the later 1940s the FTC outlawed “lifetime guarantees” – this it did not do.

The FTC’s 1945 ruling forbade “unconditional” warranties if there is an associated fee (shipping, insurance, etc). Waterman and Parker challenged the ruling, with Waterman withdrawing its challenge a year later. Parker didn’t win nor did they lose. In 1948, the courts agreed to allow such warranties but only if the fee was conspicuously detailed in writing within the warranty statement itself – so much for the “fine print.”

FTC stated that pen manufacturers could offer long-term guarantees if they did not say they were “unconditional” when a service (shipping, insurance, etc) fee applied. If the guarantee included a service charge, the charge had to be more prominently displayed in advertising.

Cross offered a lifetime guarantee then and still does today. Sheaffer has returned to offering lifetime guarantees, though not on all pens and, were offered, with qualifications.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION FOR THE FISCAL YEAR ENDED JUNE 30 1945

(pg 41) C. UNFAIR PRACTICES OTHER THAN MISREPRESENTATION OF DRUGS, DEVICES, AND COSMETICS

Fountain pen manufacturers.–W. A Sheaffer Pen Co., Fort Madison, Iowa (4337); The Parker Pen Co., Janesville, Wis. (4338); Eversharp, Inc., Chicago (4590), and L.E. Waterman Co., New York (4617), were ordered to cease making unqualified representations that their fountain pens are unconditionally guaranteed for the life of the user or for any other designated period, when a service charge, usually 35 cents, is made for repairs or adjustments. The respondents were ordered to discontinue using such terms as “Lifetime,” “Guaranteed for Life,” “Life Contract Guarantee,” “Guaranteed Forever,” or “Guaranteed for a Century” to describe or refer to their pens, and representing that the pens are unconditionally guaranteed for any designated period of time, unless the respondents, without expense to the user, make repairs or replacement of parts which may be necessitated during the designated period by any cause other than willful damage or abuse. The orders did not prohibit the respondents from (pg 42) representing truthfully that the service on their pens (as distinguished from the pens themselves) is guaranteed for life or other designated period, even though a charge is imposed in connection With such servicing, providing the terms of the guarantee, including the amount of the charge, are clearly and conspicuously disclosed in immediate conjunction with such representations.