Payment Terminal & Retail Hardware worked example

Warranty Reserve at 2.88% projected warranty claim rate: a worked example in payment terminal & retail hardware

Suppose projected warranty claim rate falls to 2.88%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimates the warranty reserve to accrue for a payment terminal program from units sold, per-claim repair cost, and projected claim rate.

The inputs for this scenario

  • Terminals sold under warranty: 25,000 units (held at the documented default)
  • Expected repair or replace cost per claim: 58 $/unit (held at the documented default)
  • Projected warranty claim rate: 2.88 % (the input this scenario stresses; the baseline uses 4)
  • Fixed reserve administration cost: 6,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Warranty reserve = units sold x repair cost per unit x projected claim rate% + administration cost.
  • Total warranty reserve cost works out to 47,760 $ at these inputs, and this is the headline figure for the scenario.
  • Warranty reserve cost per unit works out to 1.91 $ / piece at these inputs.
  • Variable warranty reserve cost works out to 41,760 $ at these inputs.
  • Fixed warranty reserve adder works out to 6,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where projected warranty claim rate sits at 4% and the headline result is 64,000 $, this scenario comes in 25.37% below the baseline at 47,760 $.
  • It computes total warranty reserve as units sold times repair cost per claim times projected claim rate, plus fixed administration cost, and the reserve per terminal sold. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Total warranty reserve cost: 47,760 $ (headline result)
  • Warranty reserve cost per unit: 1.91 $ / piece
  • Variable warranty reserve cost: 41,760 $
  • Fixed warranty reserve adder: 6,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Warranty Reserve calculator, set projected warranty claim rate to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.