12/22/2025

Stopping Warranty Fraud in the Aftermarket

Source: Counterman

No other American industry faces a higher rate of product returns than the aftermarket. Nearly a quarter of all parts sold are returned. While not every return is fraudulent, a growing number of them are. From misdiagnosed problems to outright scams, warranty fraud is draining the automotive parts industry of hundreds of millions of dollars each year.

Here’s the good news: counter professionals can help stop it — often by doing something as simple as opening the box. Before we look at the steps to reduce warranty abuse, let’s take a closer look at the issue.

Understanding the Scale of Warranty Fraud

According to manufacturers, about 22 percent of returns are fully functional. Nothing is wrong with these parts. Many were never even installed. A recent study also found that more than half of warranty returns were either brand new or didn’t belong to the manufacturer — they were OE or competitor products.

Warranty fraud happens in many ways. A customer might bring back the wrong part after misdiagnosing a problem. Others act deliberately: a failed OE component swapped into an aftermarket box, or worse — a turbocharger box stuffed with used brake pads or unrelated junk. These scenarios aren’t just frustrating; they’re expensive.

The Industry Impact of Warranty Abuse

The financial impact touches every level of the supply chain. Warranty credits from manufacturers don’t cover the losses. Stores, WDs and manufacturers all take a hit. It hurts top-line sales, reduces margins and increases reverse logistics costs.

As auto parts become more complex and more expensive, even more is at stake. Warranty fraud can threaten profitability and reduce trust across the industry.

The ‘Check the Part’ Initiative

To end this fraud, a group of industry leaders created an initiative called “Check the Part.” It encourages counter professionals to take an active role in stopping warranty abuse. The message is simple: open the box, check the part and verify the return.

The “Check the Part” program empowers counter professionals to identify red flags at the point of return — before the part gets sent up the chain as a warranty claim.

Common-Sense Steps to Prevent Fraud

Most fraudulent returns can be spotted and stopped by following a few key steps:

• Always open the box. Many issues are obvious the moment you look inside.
• Check that the part inside matches the label and the brand on the box. Be alert for swapped parts or OE components.
• Inspect for signs of installation or damage. Even light tool marks can show a part isn’t new.
• Verify the receipt and purchase date. Old, rusty parts with a receipt from yesterday should raise a red flag.

If the part is brand new and uninstalled, don’t process it as a warranty. This helps keep warranty data clean and accurate, and gets new parts back into inventory where they can be sold.

Protecting Profitability and Trust

Every part that slips through as a bad warranty return chips away at profits, productivity and trust across the industry. But, by following the simple “Check the Part” process, you can protect your store and help build a stronger aftermarket.

To learn more about this initiative and how you can help, visit CheckThePart.com.