Right to repair will not save households over $300 a year

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You may have heard that so-called “right to repair” laws will provide big savings to consumers. Last week, Forbes published an article claiming that New York’s right to repair law “will save New Yorkers over $300 a year.” The White House hosted a right to repair event back in October of last year where the administration claimed that right to repair “can save families $400 a year on average.” And in Oregon, advocates for right to repair legislation claim that repair “would save the average Oregon household $380 per year.”

Put simply, these claims are false.

ProductClaimed household savings per yearActual household savings per yearOverestimation
Major Appliances$100.22$17.08486.82%
Small Appliances$30.67$0.744063.85%
Consumer Electronics$250.84$37.93561.38%

The claimed savings come from a report published by the US Public Interest Research Group (PIRG). From the get-go, the report misconstrues data from the Bureau of Labor Statistics (BLS). It claims that American households spend $142 dollars a year on small appliances. But it includes miscellaneous housewares in its baseline calculations, which accounts for $83 of that figure. Miscellaneous housewares include things like plates, glass cups, and silverware, none of which would be covered under right to repair laws. That’s an overestimation of 140 percent.

The PIRG report also makes several assumptions that are not true. It assumes that all products break to the point of no longer being usable. It assumes that zero repairs are covered under warranty or insurance. It assumes that zero products are successfully repaired. And it assumes, without support, that repair would add 50 percent to the lifespan of all products.

Using a nationally representative survey from Consumer Reports, which also supports right to repair, one can better account for these factors that are absent in the US PIRG report.

ProductPercent BrokenRepair not covered under warranty or insuranceTried to repair, but replaced
Major Appliance81%81%26%
Small Appliance84%86%8%
Consumer Electronics75%164%232%3
1. The PIRG report only uses smartphones and laptops for their cost saving calculations for consumer electronics, and the Consumer Reports survey does not include data on laptops. But a survey conducted by Secure Data Recovery shows that Americans are more likely to break their smartphone than their laptop, so this figure is still an overestimation. 2. Secure Data Recovery found that only 37 percent of Americans pay for laptop damage out of pocket, so this figure likewise represents an overestimation. 3. Secure Data Recovery found that 38 percent of Americans have had to replace a laptop due to breaking it in their lifetime. Consumer Reports found that 25 percent of respondents reported trying to get their smartphone repaired, but ended up replacing it.

After considering how often products break, whether or not a repair is covered under warranty or insurance, and how often consumers try to repair but end up replacing, the actual forecasted savings per household is $55.74 per household ($22.30 per person) a year.

This is in stark contrast from the $381 figure being used by supporters of the legislation. Due to other problems with the PIRG report, $55 is still likely an overestimation.

Lawmakers should weigh this nominal benefit with the negative consequences that are likely to result from right to repair laws. Such proposals could fuel a black market for spare parts that put consumers at higher risk of theft, according to Juan Londoño, senior policy analyst at the Taxpayers Protection Alliance. Right to repair laws likely violate federal copyright law, could harm the rights of digital creators, and open the floodgates to piracy, according to Devlin Hartline, legal fellow for the Hudson Institute. Consumer data is also at risk. “Many brands cultivate trust by keeping customer data safe and away from prying eyes,” according to Dr. Eric Fruits, senior scholar at International Center for Law & Economics.

Even worse, an economics paper in the journal of Management Science found that right to repair laws could lead to a “lose-lose-lose” scenario that “compromises manufacturer profit, reduces consumer surplus, and exacerbates the environmental impact despite repair being made easier and more affordable.”

These unintended consequences far outweigh the potential benefit of saving the average American, at best, $22 a year.

Free market solutions already exist to return value to consumers for their old devices. For example, mobile trade-in programs returned $4.3 billion to US consumers last year, according to an industry report published by Assurant. That’s about $33 per household for just smartphones.