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Should You Include Copier Maintenance Plan Costs into Your Copier Lease? Updated

copier : young worker using a copy machine

Back in March of 2014 I wrote a post titled, Should You Include Copier Maintenance Plan Costs in Your Copier Lease?.

At the time I was very against including copier maintenance plan costs (also referred to as a copier service plan) into the lease of the copier.

I noted that in many cases the reason the copier buyer does this is for the convenience of having to write only one check while some copier companies may be motivated by the fact that they can get interest and fees on the maintenance plan costs whereas if the maintenance plan is billed separately they don’t.

Please note that I said “some” copier companies may be motivated by interest and fees on the service plan. I don’t want to paint the whole industry with a broad brush. That really wouldn’t be fair.

While I still feel that it’s generally a bad idea to add the service cost to the lease I have discovered a new way to go about this.

A way that you can combine the lease and the service agreement together without paying ANY interest or fees of any kind on the service. The best of both worlds.

It’s called a pass-through. The reason it’s called a pass-through is that the leasing company will accept their monthly payment from the business who leased the copier and then  pass the copier service/copier maintenance agreement portion of the payment back to the local copier company who sold the machine and performs the service/maintenance on the machine.

This is done without you the customer paying any fees whatsoever to the leasing company for passing the payment to the local copier company.

This can be a little confusing so I’ll sum up the whole process for you.

When you lease your new copier you purchase a service agreement on the copier.

A copier service agreement covers toner, repairs (including parts and labor) and preventative maintenance. All you have to do is buy paper. Everything else is covered.

When is comes to billing some copier companies will add the service/maintenance costs to the lease. The problem with this is that you are paying interest and fees on the service plan.

It doesn’t have to happen this way because the copier company who sold you the copier and will service the copier can bill you separately for the copier service agreement.

In other words you pay the leasing company their payment for the copier and write a separate check to the local copier company for the service plan on the copier because they will be performing the service on your copier.

Many copier buyers love the convenience of making only one payment but don’t want to pay interest and fees on the service plan if they don’t have to.

This is where the pass-through comes in.

The leasing company sends the customer one monthly bill which includes the copier and the service agreement and then passes the service plan portion of the payment back to the local copier company.

The copier buyer is happy because they only had to cut one check.

It’s a great service that provides the best of both worlds for the copier buyer.

I now offer this single payment service to my customers here at my copier company in Baltimore so if you are in Maryland, DC, Northern Virginia or Delaware and would like a competitive quote from a copier salesperson who will tell you the truth (even when it hurts), please fill out the quick easy form below and I would be glad to help.

If you are anywhere else in the United States and would like my recommendation for honest copier companies in your local area fill out the form below and I’ll get back to you with the names of some trusted companies.

As always feel free to ask me any copier buying question and I’ll do my best to give you a solid answer.

Thanks for stopping by. Have fun.

Ed Worthington

 

 

 

 

 

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How to Avoid Unexpected Copier Service Plan Fees

January 23, 2015 Leave a comment

With business expenses going up every day it’s hard to create and keep a consistent budget in today’s world.

Most businesses are  paying for a copier lease and maintenance costs and the last thing you need is to have unexpected charges from your copier vendor.

But for many companies that’s exactly what’s happening.

I recently received an email from a blog reader located here in Baltimore, Maryland asking for my advice.

She leased a new copier several months ago and recently an alert message popped up on the copier screen letting her know that one of her toner cartridges needed to be replaced.

Imagine her surprise when she called her copier company and was told that she had to pay for the toner cartridge which was a few hundred dollars.

This shocked and angered her because she was already paying for a service plan on the copier which supposedly included the toner. So why was she being asked to pay for this toner?

When she asked why she was told that she was using too much toner. This seemed very confusing. If she has a service plan which includes 5,000 prints/copies per month how can she be using too much toner when you make those 5,000 prints/copies.

Here’s how it works.

When a copier manufacturer makes a toner cartridge they fill it with an amount of toner that is enough to cover a specific amount of prints or copies.

That number of pages, sometimes called a yield, is based on a specific percentage of page coverage.

For example you may see toner sold online saying “32,000 yield at 5%”.

What their saying is that this cartridge will produce (or yield) 32,000 pages when each page is 5% covered with toner from that cartridge.

When a user makes copies/prints that average more than a 5% coverage on the page they will get less than 32,000 pages from that cartridge.

When they run out of toner they call their copier company and are told they have to pay for more toner because they are using more than 5% toner coverage per page.

Although the contract states you will get x amount of copies/prints included with the service plan, that x amount of copies is based on a 5% page coverage.

If your average page coverage happens to be more than 5% you’re  going to be asked to pay for more toner.

This is a tricky situation because in order for the copier/toner manufacturer to say a toner gets X amount of pages they must base that on a certain % of page coverage.

Otherwise they have no way to state how many pages you’ll get from a toner cartridge.

If they were to base the yield on 100% page coverage you would only get 1,600 pages on what is otherwise called a 32,000 page yield cartridge at 5%.

32,000 pages at 5% coverage or 1,600 pages at 100% coverage. Same cartridge with the same amount of toner. The only difference is what the page coverage percentage is.

If you want to avoid this happening you can adjust the toner density on the copier. There should be a setting on your copier called “quality/density” or something similar.

It basically just tells the copier or printer to lay down less color toner when printing or copying a color image.

At my company we don’t make the customers buy extra toner unless they are really going crazy with color usage.

If this does happen to you ask to speak to a manager at the copier company and ask them if they can make an exception just this one time since you weren’t aware how this worked.

This scenario should never happen to an average business. It usually only happens when a business is printing a lot of pages with heavy color and graphics like brochures and marketing material.

If you don’t print with a lot of color usage and your still being asked by the copier company to pay for more toner you should be suspicious.

If you happen to be in a type of business where you do a lot of heavy color printing the bottom line is that your options probably come down to laying less color down on your pages or paying for the extra toner.

I hope this is helpful. Thanks for stopping by today and remember to have fun.

If you are thinking about purchasing a new copier, printer, scanner, fax machine, postage meter, stuffing/folding machine or binding equipment feel free to give me a call for a competitive quote.

I also offer many different software packages, including custom developed solutions, to assist you with your document management needs.

My company is located in Baltimore, Maryland however I offer sales and service to the entire USA.

You’ll get no sales games or tricks with me. Just an honest opinion on your needs and a very competitive quote.

Feel free to call me or fill out the simple form below. My number is 443-570-0414. Thanks!

Copier Service Response Time: What’s Reasonable and What’s Way Too Long

Last week I received a call  from the office manager of a company here in Baltimore, Maryland looking to lease a new copier.

As I usually do when I receive a call like this I began asking this office manager a few questions about their current copier situation and why they might be looking to leave their current vendor.

She gave me a few of the usual answers like the copier is jamming a lot, the copier is regularly down going altogether and they’re not at all happy with the service from their existing copier company.

From there I scheduled an appointment to meet with the office manager and general manager of the compan.

If you’ve visited this blog before you’ll know that often when I meet with prospective customers and begin asking these types of detailed questions I’m stunned by the answers. I guess I shouldn’t be stunned  any more but it’s kind of hard not to be when you find out how badly people are being taken advantage of by morally challenged (shady) copier companies.

When I arrived at the company and was waiting for the office manager and General Manager to meet with me I observed they had an old Lanier copier right there in the front office. When I say an old Lanier, I mean OLD. At least 12 years old.

After asking my more detailed questions I found out 2 things that really did shock and amaze me.

1) They have been paying a lease payment for their old copier for at least the past 8 YEARS. Yes I said AT LEAST 8 YEARS!

They even suspect that 8 years ago when the copier was first delivered that it was already used. Judging from the make and model of the copier I think they’re probably right.

The issue of paying a lease payment for the same copier for years and years perpetually is one I’ve seen many times before. It’s called “ever-greening”. What it means is that the lease will continue to self-renew until the customer says stop with written notice.

I think it’s called ever-greening because the copier companies bank accounts are becoming greener by ripping off people who are too busy running their businesses to pay attention to whats happening to them.

This practice is very common so I decided to dedicate a whole post to it in the next few months.

Now lets move on to shocking discovery number 2.

2) The existing copier company regularly takes up to 4 business days to service the copier.

No I’m not joking. I wish I was. On more than one occasion this company has been without a copier for 4 days and even at their best this company would take 2 days to get there.

So you have something to compare to my company offers all of our customers a 4 hour service guarantee. From the time you pick up the phone and call us we have 4 hours to get to your location to service the copier. If we don’t get there within 4 hours we will credit our customers $100.00 toward their next service plan invoice.

We rarely have to pay. We’re dedicated to providing top notch service.

While a 4 hour service guarantee may be a bit on the ambitious side I think same day or next day service are totally reasonable expectations. If your copier company is taking longer than that on a regular basis you may want to consider having a polite conversation with them about the issue.

If that doesn’t work it may be time to consider looking into other companies who can service your brand of copier.

I hope this information helps. As always feel free to email or call me with any questions about buying or leasing copiers.

If your business is located in Maryland, Washington DC, or Northern Virginia and you would like a competitive quote from a copier salesperson who will tell you the truth (even when it hurts), please fill out the quick easy form below and I would be glad to help.

If you are anywhere else in the United States and would like my recommendation for copier companies in your local area fill out the form below and I’ll get back to you asap.

As always you can also ask me any copier buying question you like and I’ll do my best to give you a solid answer.

Thanks for stopping by. Have fun.

Ed Worthington

 

 

 

Should You Include Maintenance Plan Costs In Your Copier Lease?

Business saving money Stock Image

 

Recently I met with a prospective copier lease customer located here in Baltimore, Maryland.

The company is what I would consider a mid-sized manufacturing business with 200 employees.

They have 3 copiers and 3 large commercial color printers at their facility.

During our initial meeting I asked the CFO of the company how his billing was set up with his current copier vendor and he informed me that everything was included in his lease.

By everything he meant that the copiers, the printers and the maintenance agreement for all of them were all rolled into one lease.

Just to be clear, when I say maintenance agreement/plan I’m speaking of an agreement that covers toner, all service and repairs as well as preventative maintenance. Basically everything except paper and staples for the copiers and printers.

When I asked the CFO if he’d ever considered having the maintenance agreement billed separately from the lease he looked puzzled.

I explained to him that he was paying interest/leasing fees on the maintenance agreement and that he really didn’t have to do that.

I further explained that all copier companies will bill you separately for your maintenance agreement and that keeps you from paying leasing fees on your copier maintenance plan.

I told him that many copier companies don’t actually hold your lease in-house but instead send it to an outside company. In these cases the leasing company sends you the lease invoice each month for the lease and the copier company will send you the bill for the maintenance plan because they are the ones providing the maintenance.

Then what the CFO said next had me puzzled. He said he likes to keep the copiers, printers and maintenance together in the same lease so he doesn’t have to write 2 checks every month. Huh?

This business does a fairly significant amount of printing and copying so they are paying A LOT of money unnecessarily.

Unlike this CFO many businesses who have the cost of maintenance rolled into their copier lease don’t understand that they’re paying leasing fees on the copier maintenance agreement.

I’ve even had prospective customers tell me that the sales rep of their current vendor told them that there are no fees whatsoever associated with putting maintenance into the lease.

That sounds like a bunch of poo poo to me. There could be many reasons a copier salesperson is encouraging you to do this but my bet is that it benefits the salesperson to do so.

One possibility is that the copier company actually holds the lease in-house and by rolling maintenance plan costs into the lease they make increased profits on that maintenance. Therefore the copier company may be giving the sales rep an increased commission for putting the maintenance costs into the lease.

If the leasing company (whether in-house or not)  is allowing you to have maintenance costs rolled into your copier lease they are charging you for the privilege one way or another.

They are leasing companies, not charities. They didn’t get to be the incredibly profitable entities they are by lending money to businesses for free.

It seemed to me that this CFO was costing his company a boatload of money for the convenience of writing one check per month instead of two. Heck, most copier companies will bill you quarterly or even annually for maintenance so you really don’t even have to write a maintenance check every month.

My advice is to have your maintenance agreement billed separately to avoid unnecessary costs to your business.

If your business is located in Maryland, Washington DC, or Northern Virginia and you would like a competitive quote from a copier salesperson who will tell you the truth (even when it hurts), please fill out the quick easy form below and I would be glad to help.

If you are anywhere else in the United States and would like my recommendation for copier companies in your local area fill out the form below and I’ll get back to you asap.

As always you can also ask me any copier buying question you like and I’ll do my best to give you a solid answer.

Thanks for stopping by. Have fun.

Ed Worthington.     edworthington@outlook.com.                           443-570-0414

 

 

 

 

Copier Service Contracts- Are They Really Necessary?

February 19, 2013 Leave a comment

If you already own a copier or are getting ready to buy one you no doubt have been offered a copier service agreement. These agreements go by many names. The most popular are: copier service agreement, copier service contract, copier maintenance agreement, copier maintenance contract.

Whatever your vendor or potential vendor calls them copier manintenace agreements can strike fear in the heart of copier buyers. No I’m not kidding. People really do get afraid and conflicted. Why? Simple. They don’t want to get ripped off. I don’t blame them. My industry is full of shady characters.

I’m really not sure if the copier industry has more shady characters than any other industry but it sure does seem so.

Recently I wrote a two part series called Copier Service Contracts- What You Really Need to Know. If you didn’t get a chance to read them I would take a moment now and give them a read. Here are the links:

Part 1-  http://wp.me/p23icE-2S

Part 2- http://wp.me/p23icE-6b

The series received a lot of attention but there was one question that kept coming back up in the feedback I recieved. It went something like this: thanks Ed for educating me on how not to get ripped off when I purchase a copier service contract, but do I really need one in the first place?

My answer to that is YES. Let me explain.

First of all I am NOT the kind of person who buys service agreements or extended warranty’s. I was at Best Buy a few weeks ago and bought a monitor for my computer and the guy ringing me up asked if I wanted an extended warranty. It was about an additional 15% more for the warranty. I turned it down. I always do and here’s why.

If you look at these extended warranty’s from a long term view, you as the consumer almost always lose. Why? Because odds are you’ll never need the warranty. They are highly profitable for the company. That’s why the salespeople always push them so hard.

But a copier is an exception to the rule. First let me say that although I sell copiers I make no compensation whatsoever on service agreements. I have no reason to care one way or the other except that I want my clients to be exceedingly happy with their purchase and for me that means that they get a service agreement.

Here are 5 reasons why you need a copier service agreement.

1) For what you get, they are very reasonably priced. As I stated in my previous posts a copier service agreement usually covers everything except your paper and staples. Toner, preventative maintenance, and all repairs including parts and labor.

At my company we don’t charge minimums, we just charge by the number of copies/prints used per month, quarter, or year. Depending on the model of the machine and the number of copies/prints used we charge anywhere from .005 (half a penny) per page on the low end to .008 on the higher end for black prints. Many companies are more expensive than we are but even if you’re paying a penny or a penny and a half in my opinion you are coming out ahead.

Remember this includes everything except paper and staples. Of course copier companies are making a profit even at these low numbers but we are all in business to make a profit right? As you can see with these numbers there can’t possibly be a lot of money made here. The money is made in the volume of pages copied and printed.

2) Preventative maintenance is scheduled and taken care and you don’t have to do a thing. In my opinion this is a really big deal. We are all very busy in our business lives and it’s too much to ask our customers remember at what intervals their copier needs preventative maintenance.

When you have a service agreement your copier company knows when you need a PM (preventative maintenance) call and they will do it automatically. You don’t have to remember anything. This is important because copiers are machines and just like other machines they need to be maintained.

If you think about all the things a modern copier does it’s amazing they don’t have more problems and break downs. One of the reasons they don’t is because many copier companies do a great job of maintaining the machines. It’s actually in their best interest to do so because if they don’t and the machine has a major issue due to wear and tear it will cost the copier company a lot more money than what they would’ve paid for a preventative maintenance. appointment.

3) It locks in your toner, maintenance and repair costs, with a reasonable increase, for the life of the contract. If you don’t have a service agreement the copier manufacturer or dealer can increase the cost of toner, preventative maintenance and repairs any time, and as much as they want.

Furthermore if your copier goes down and you don’t have an agreement the cost of a service call is around $150.00 per hour PLUS parts. If the copier has one serious issue the agreement can pay for itself very quickly.

4) If your copier is down, you are a high priority and should have a guaranteed response time built into your service agreement. This comes in handy because as we all know when the copier goes down a lot of work just can’t get done.

A guaranteed emergency response time may not written in the standard service agreement with all copier companies but you should request it. Read the fine print of the service agreement and if you don’t see anything about it request a guaranteed response time IN WRITING. Also, don’t forget to ask what the penalty is for the copier company if they don’t meet that response time.

For example at my copier company, Action Business Systems-Toshiba here in Baltimore, Maryland we have a guaranteed emergency response time of 4 hours. If we’re not there on time we will credit the customers next service invoice $100.00. It’s a strong guarantee and we stick to it. So should your copier company.

5) Finally, if the copier has a major issue and is down for more than a few business days as part of your service agreement you should get a free loaner, you just pay for the toner used.

Here at my company our guarantee is that if the copier is down for more than two business days we’ll bring in a loaner. You may be thinking there’s not way you could live without your copier for two days but let me reassure you, this pretty much never happens. Most copier break downs can be resolved in a matter of minutes or a few hours at the max.

If you don’t have a service agreement no copier company is going to give you a loaner for free. They may rent you a copier but it’s going to cost you because you’ll pay a rental fee plus a fee for how much toner you have used. Again the free loaner may not be written into the standard service agreement from your copier company but you should negotiate to have it added.

All of the reasons I have listed above and many more add up to three words, PEACE OF MIND. When you purchase a service agreement everything is taken care of and for a very reasonable price. That;s why I think they’re a good idea.

I hope this was helpful. If you have any questions feel free to shoot me an email, give me a call or fill out the easy form below. 443-570-0414 If you’re in the Baltimore Maryland, Washington DC or Northern Virginia area I would be happy to give you a competitive quote on your next copier, printer, scanner, commercial document shredder as well as all types of document management software. Thanks for stopping by and I hope you have a fun day!

 

Copier Service Contracts- What You Really Need to Know- Part 2

January 15, 2013 Leave a comment

Hey it’s Ed Worthington from Action Business Systems-Toshiba Copiers. We are a copier company in Maryland serving the Maryland, Washington DC and Northern Virginia area but this blog is relevant to anyone in the world who buys copiers.

In today’s installment of my Copier Service Contracts series I’d like to talk with you about another thing you really need to know about copier service/maintenance contracts: Automatic Increases.

When I say automatic increases what I mean is that ALL copier service agreements contain in the terms and conditions the ability for the company to increase the cost of the service in specific time increments.

For example the agreement may state that the service fee can go up as much as 5% per year each year. Some people may think that’s too much and some may think that’s reasonable.

My main purpose of this post is to make you aware of the fact that these increases exist in the fine print and to let you know that YOU NEED TO READ THAT FINE PRINT SO YOU DON’T GET RIPPED OFF.

This is particularly relevant to me right now because there is a company I am working with right now whose current copier vendor has a 10% per quarter increase built in. Yes I said 10% per quarter. OUTRAGEOUS!!

This company also just received a check in the tens of thousands of dollars from their current copier company because I exposed that fact that they were being ripped off.

The current vendor not only charged them the 10% per quarter but much more. Can you say SHADY!

You may ask yourself how a copier company can get away with overcharging a small business so badly.

Well I’ll tell you how and it happens all the time. It is because the business Owner/Controller/CFO doesn’t pay attention to the service bill from the copier company and they increase it slowly. They don’t increase it by 30% all at once. But maybe by 5-6% every quarter.

It really starts to add up!

So the first ACTION POINT here is before you sign a copier maintenance agreement read the fine print and if you don’t like what you see, negotiate.

The second action point is to read your copier service bill carefully and watch for increases.

This advice could save you a lot of money in the long run.

If you have any questions about copier service agreements or anything else copier/document management related feel free to call me or fill out the form below and I’ll get right back to you. 443-570-0414 Thanks for stopping by.