What to Do When You Pick a Lemon

Chirag Karia couldn't have been more excited when he bought his first home computer in February 1997. The Palo Alto, California, attorney scoped out his needs, researched the options, and settled on an $1800 PC from Quantex Microsystems, a mail-order vendor based in Somerset, New Jersey.

But Karia's delight soon turned to frustration. His CD-ROM drive stopped working, his computer began emitting a high-pitched whine, and he kept getting error messages that required him to reboot his system. Despite three motherboard replacements, new RAM, and a new processor, his PC continued to behave erratically.

Karia demanded that Quantex fix the PC. When the company tried and failed, he asked for a refund. But after many attempts to get reimbursed, he asked his credit card company to intercede. He now has his refund and is beginning a new hunt for a new home PC. Though he's glad to be rid of his faulty machine, he feels cheated by the experience. "What really upset me was not that they gave me a lemon," he says, "but their attitude after it happened--I called so many times [and sent back the PC], and it came back with the same problems."

According to Nat Terrizzi, service and support manager for Quantex, Karia's experience was unusual. Terrizzi says Quantex was willing to replace Karia's PC "and restore his faith in the company." An order for a replacement was in the works, in fact, when Quantex learned that Karia's credit card company had charged back the price of the original unit. Asked why Quantex didn't refund Karia's money on its own, Terrizzi said, "We don't want to lose customers. We consider refunds the last resort."

The Unlucky Few

Though Karia's experience is not normal, PC World gets letters every month from consumers who've been to hell and back trying to get problems fixed in their new PCs. In the first few months of this year, we received letters from owners of "lemon" PCs from Compaq, Hewlett-Packard, and IBM, among others.

Consumers who discover their misfortune within 30 days of buying PCs usually can return them for a refund. But what if you don't realize there's a problem before the first 30 days have passed? Are you stuck getting repair after repair? Or does your warranty provide other options?

To answer these questions, I took a crash course in warranty law from experts and buyers' advocates. Once I got past the legal mumbo-jumbo, I found that consumers have more options than companies typically let on--whether or not the warranty spells them out.

Warranty Law 101

All consumer goods are covered under federal warranty law. Some states have enacted additional laws to afford consumers even greater protection. And various product-specific statutes--known popularly as lemon laws--govern cars, boats, wheelchairs, and a few other types of goods. Though their details differ, lemon laws' most important functions are to define just what constitutes a lemon and to spell out the steps that consumers must follow to exercise their rights.

The warranty that covers your PC is an express warranty. It tells you how long the product is covered, whom to contact when a problem arises, and typically, how to get an item repaired or replaced. But your protections extend far beyond the written warranty. Under the Uniform Commercial Code, consumer goods also carry an implied warranty, certifying that if a product still malfunctions after a "reasonable number" of repairs, the consumer is entitled to a replacement or refund. In most cases, the implied warranty is limited to the duration of the express warranty.

Some PC makers (including, ironically, Quantex) discuss this option in their warranty. But the right is yours "whether or not it's stated in the warranty," says Richard Alexander, author of The Consumer Law Page and founder of the Alexander Law Firm in San Jose, California. But as Chirag Karia's experience illustrates, being entitled to a refund is one thing, while obtaining one can be quite another.

Getting Your Due

When your PC fails while under warranty, call the vendor and follow its rules for fixing the problem. Failing to go through proper channels can diminish your rights. In most cases, the company's first attempt to repair the machine will resolve the problem. But what if the repair doesn't work? Can you request a refund or replacement?

Though the courts have never defined what a "reasonable number" of repair attempts is, it's safe to say reasonable means more than one. Compaq, Dell, and IBM all said they handle these "exceptions" case by case. Only Quantex would quantify the term. The company generally considers replacing a PC when the same component breaks down more than twice or when a single PC undergoes more than two repairs for different components.

Attorneys I spoke with said that after three or four failed repair attempts (or three or more discrete problems within the warranty period), buyers should be entitled to a refund or replacement.

But PC companies rarely volunteer this solution. You'll have to demand it. Send the company a detailed report of the problems you've had and the steps you've taken. Say whether you want a refund or a replacement. And note that you're making the request pursuant to the product's implied warranty.

Companies would rather replace a PC than lose a customer. If such an offer is made, cut your losses and accept the new PC--even if what you really want is a refund. If a company refuses your request, take the case to small-claims court. Most consumers avoid this option, but Alexander and other consumer-affairs lawyers say it's not as complicated as you might think. If you do choose this route, read Everybody's Guide to Small Claims Court, from Nolo Press.

If you follow the proper PC repair procedures, you stand a good chance of winning, says Evan Johnson, an attorney in the Montgomery County, Maryland, Division of Consumer Affairs. Though the court is not responsible for collecting the judgment, Johnson says most companies don't want judgments against them outstanding. If the company won't pay, file forms with the court to have a marshal serve it with papers.

Making Lemonade

Consumers can't control whether the PC they purchase proves to be a lemon or keeps working properly long after the warranty has expired. But what happens after you get a lemon is up to you.