Are rechargeable batteries proprietary?
 

The batteries for my Craftsman tools seem to be losing their power and not holding a charge. Do I need to buy new Craftsman brand batteries or is there a cheaper generic that I can use?

Its the nature of the beast for certain types of rechargeable battery technology. There is no generic replacement i have ever seen.

Your options...
1) Replace with new craftsman batteries (if you can get them still)
2) Rebuild the batteries (Here is one company http://www.primecell.com/ )
3) Replace the tool (The newest technology in rechargeable is LithiumIon. These will last a lot longer)

Even though Li-ion has advantages in size and weight. it is more sensitive to abuse- heavy loads, hot recharge, and the like. so it may not be the best choice for tools. even though Ni-Cd is old tech it is more robust in a tool application.
I vote for sending them out for a rebuild, most places that do it put in top quality cells that hold more juice and perform better.

Rebuilding can be a good option, I have had it done myself. But I need to take exception with the statement "it may not be the best choice for tools" regarding LiIon. I have owned and used very heavily battery tools since about 1990. Ni-cd, NMh and LIon. Li-ion is by far the best performer.

As for "hot recharge" - The chargers have a thermostat built in and also a cooling fan so to prevent charging while hot. And as far as "heavy load" - I have no idea about that - my newest LiIon tools are the heavyist duty cordless I have ever owned and outperform any other battery tool, under heavy load, I have ever owned.

That said - The battery tools do not compare performance wise to a similar corded tool. The proved the case in several tests I did with drills and reciprocating saws (comparing cordless with corded).

Have a nice day.