WHAT TO WATCH OUT FOR ON MAINTENANCE AGREEMENTS

I’ve noticed some things lately that you should be aware of.  First of all, I’ve noticed that some copier companies are asking customers to commit to an overly long contract period.  If the service agreement is not included in the lease there is no reason to do that.    That just means you can’t shop around it you’re unhappy with the service.  That’s the reason we do ours on a month to month basis with an option for quarterly billing.

Putting the service agreement in the lease is a smart idea because it locks in your rate.  Most copier companies like to bump the rates up 10% per year and it’s harder to do that when it’s in the lease.  However, I have seen a hybrid type lease that allows them to do so.  Make sure you ask a about that when you sign the lease.

Another smart idea is to include a lower amount of copies in the lease or service agreement than you are currently doing.  It’s better to pay excess copy charges than pay for copies you didn’t make.  For example, if you tell the sales rep you make seven to ten thousand pages per month they may put 10,000 in the lease payment each month.  Well, if you don’t make 10,000 you bought them anyway.  Better to put the 7,000 in and pay the excess copies each month or at the end of the lease.

Which brings me to another point.  It’s better to have the expected usage put in the lease as a lump sum which you can use up at your leisure.  For example, let’s say your page volume fluctuates.  Well, on the months you’re under the minimum you pay the higher amount anyway and on the months where you copy/print a lot you pay the excess fees.  Why not take the expected usage over the life of the lease and let you use it up without paying excess fees and getting trapped by the monthly minimums.

One of the tricks I’ve seen is to quote a low service rate to get the sale and then set the minimums high.  If you do the math you will see you are paying a higher rate per copy on the months where your actual usage is under the monthly minimum billing.  We like to do it as a lump sum which is more customer oriented.  We also use the same rate for excess pages that we use as the base amount.  That way there’s nothing sneaky about the math.

My last point is to avoid cancellation penalties.  Again, a lot of copier vendors put those in there to keep you from shopping around should the service response get too slow.  It seems to me the copier vendor should earn the customer’s business on an ongoing basis so there’s no need to put cancellation penalties in there.  We certainly don’t.