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some products may be returned due to defects, and that will cost more then just making sure that your product is top notch at the very beginning.
I'd like to think that's right but history suggests that it isn't always true. In the 1970's Ford made the Pinto, a car with a gas tank prominently located just behind the rear bumper. It was later proven that Pintos were prone to fires and explosions when struck in the rear near the gas tank. During the litigation in the class action suit brought by the families of people who suffered horrific deaths from fire and by the disfigured survivors, a Ford high level (executive) memorandum was found during the legal process known as "discovery". The memo was a straightforward comparison of the costs of fixing the known defect in the Pinto gas tank design versus the expected costs of losing a certain number of lawsuits and settling a certain other number of lawsuits. The memo concluded that it was cheaper for Ford to allow the few dozen expected deaths and disfigurements to occur and deal with the possibility of paying (in the future) lawsuit damages and settlements versus the certainty of paying (up front) to fix the gas tank problem. There was no consideration of the moral or ethical values implicit in Ford's executive analysis. It was an ice cold financial cost versus benefit comparison.
We know that headphone failures do not rise to the level of horrific death or disfigurement by fire (maybe for some it is equivalent but not for me). The fact that the moral and ethical considerations involved are much less weighty than life and death suggests to me that at least some companies making headphones (any products, really) will prefer to put out defective products and deal with a certain number of persistent warranty claims rather than make their products better in the first instance. Moreover, making warranty processes excessively difficult, lengthy, costly, unpleasant, etc., will discourage a certain number of people from even bothering to pursue warranty claims and encourage others to drop their claims after an initial effort. One poster in this thread even said that from his own knowledge of Grado customer service, he will not take his warranted Grados to them for repair, choosing instead to pay out of pocket for repairs that Grado should pay for under the terms of its warranty. This is the behavior on which such companies count.
I believe that some companies reach a point (or may have started from the premise) that such reprehensible behavior pays off financially for them. They know they walk a thin line that is sometimes crossed (see, e.g., General Motors), where the quality of the product and follow-on customer service decline to the point that large numbers of former and potential customers abandon the company's products. Most such companies, however, manage to putter along this thin line for a long time (see, e.g., the "telephone company"), and have either a natural monopoly or a dedicated customer base against whom virtually no offense is sufficient to drive away that core business.
The question I think we should be asking when purchasing, among other audio products, $1,000+ headphones is, "Where should the manufacturers of our favorite products draw these lines?". I believe Audeze is an example of a company that is currently getting it about right and Grado is an example of a company that isn't. I have no idea what motivates Grado to treat customers the way it treated me. But it is well established, and evidenced by at least one posting in this thread, that bad warranty service discourages future warranty claims. A related question is whether bad warranty service discourages future sales. Also, keep in mind that my Grado flagship product, the PS1000 ($1,700), was virtually DOA, having failed after just a few hours of use and was actually (not virtually) DOA upon return from Grado warranty service. With the relative behaviors of Audeze and Grado continuing at these companies, it would be my personal choice to consider another Audeze product while I would not consider another Grado product.