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#180679 - 09/05/08 08:14 PM Flat rate problems  
Jim M  Offline
Joined: Aug 2001
Posts: 457
Chestertown, MD, USA
I read this in the paper the other day and am posting it here just to start a discussion.

Beware of price-gouging local plumbers.

Evidently price gouging by many local plumbers is so common that it has become an accepted practice.

As I relate my experience to friends and associates, most of them top my story with one of their own.

I was astounded recently when I had to pay $303 for a pressure switch for my water pump. I have it on good professional authority the the switch cost about $45 wholesale.

The $303 was on top of the $79 service cahrge just for showing up. Actually I thought the service charge was somewhat reasonable, especially since my call to the plumber was after normal business hours. We had no water at all.

But the next charge really caught me off guard. The plumber said, if he checked to make sure the switch was the cause of the problem and I decided I didn't want to pay the inflated price, I would be charged a $100 diagnostic fee.

So, there I was at 8 pm Friday, with no water in a house and out of town guests about to arrive for thr weekend.

So what do you do? Politely tell the pleasent plumbe to get lost and pay $179 for doing nothing? Feeling trapped, I signed the papers and let him go ahead and install what must have been a gold palted switch. Bottom line: After paying $382 ransom. we finally had water.

As I said there are many other stories similar to this one, some much worse.

We are all victims and feel a bit helpless to do anything about it. I have expressed my concerns in writing to the plumbing company and filed a complaint to the BBB in hopes of curtailing such unethical, immoral and possibly illegal business practices in the future.

Business, Office, Estimating, Legal:

#180681 - 09/05/08 08:50 PM Re: Flat rate problems [Re: Jim M]  
twh  Offline
Joined: Mar 2004
Posts: 922
Regina, Sask.
It isn't just plumbers.

One of my customers told me about a carpenter who doubled his quoted price because "the job turned out really well."

A refrigeration mechanic on a maintenance contract told a customer that her air conditioner was about to fail and she needed a new one. It even quit working right after he left. She was suspicious and had it checked and another refrigeration mechanic and an electrician. We turned the switch back on.

My ex took her new car back to the dealer because it occasionally stalled on the highway. They told her that it was supposed to do that. A different dealer replaced the fuel pump.

Electricians do it too. Dishonesty isn't limited to certain trades.

Maybe we need a feedback system like ebay.

#180682 - 09/05/08 09:11 PM Re: Flat rate problems [Re: twh]  
sparkyinak  Offline
Joined: Jul 2007
Posts: 1,328
Originally Posted by twh
Maybe we need a feedback system like ebay.
There are several websites out there. I heard one on public radio but I can not think of it. I do not know personally any reputable sites though.

"Live Awesome!" - Kevin Carosa

#180683 - 09/05/08 11:16 PM Re: Flat rate problems [Re: sparkyinak]  
renosteinke  Offline
Cat Servant
Joined: Jan 2005
Posts: 5,316
Blue Collar Country
I can't really say that I can find anything 'wrong' with someone charging higher rates than another.

"Flat rate" isn't about a price being high or low; all a 'flat rate' means is that the job will be accomplished for the same price, no matter what. That is, you'll charge a set price, without regard for how long, what parts, or what complications you encounter. It's the end result that counts ... job done, a set amount is due.

Customer service is another animal completely. The customer has to pay for a lot of invisible things ... like the hours you're not working, and the support you need to be able to operate outside 'normal' hours. The customer has also sacrificed the main leverage he might have: steady, repeat business, with a proven prompt payment record.

One thing most often overlooked by the customer is that those truly good at what they do make it look easy.

So you come out at the most inconvenient time, quickly find the problem, fix it promptly because you have the necessary parts on the truck ... all on the chance that you'll actually get paid when you're done.

That the customer sees you on site, actually working for 30 minutes, then leads to this line of thought on the customers' part: "Let's see, he worked 1/2 hour, I get paid $20/ hr, the parts cost $5 at Home Depot .... so the bill should be $15."

It just isn't right for such competence to be punished. Yet, somehow the customer thinks that the guy who spent three hours chasing false trails is somehow worthy of six times the pay. After all, the dolt was there six times as long!

Now, the matters of charging for unnecessary work, or work that is not performed, are something entirely different.

Different 'flat rate guides' are nothing more than attempts to distribute your expenses over the customers who use certain services. For example, a higher rate when using the scaffold than when using a ladder may seem silly - except that scaffolds cost money, and the job gets done a lot faster.

If I have any problem with these schedules at all, it is that the customer has NO need to know how you arrived at your price. The last thing you need is for him to start dissecting your methodology. The focus should be on the end result alone.

#180684 - 09/06/08 12:58 AM Re: Flat rate problems [Re: Jim M]  
Trumpy  Offline

Joined: Jul 2002
Posts: 8,223
SI,New Zealand
This isn't about Flat rate or about price gouging.

There are Forums full of people that have called tradesmen after hours and then later whine about how they think they have been wronged, why this is I'm not sure.

Fine, if you think you can do better, be my guest, I'd like my evenings to myself as well as my weekends.
Actually, I think that price was far too low, given the customer.

If they knew the pressure switch cost that much, why did they not go out and buy one and fit it, oh sorry I forgot, they lack manual skills.

Tradesmen are hired for (get this)their expertise not their time, when idiots that hire them realise this, the better off we will all be.

I like the "8pm Friday night and we had guests coming" bit, well maybe the plumber did as well.

#180687 - 09/06/08 08:29 AM Re: Flat rate problems [Re: Trumpy]  
twh  Offline
Joined: Mar 2004
Posts: 922
Regina, Sask.
Actually, I think that price was far too low, given the customer.

#180689 - 09/06/08 11:11 AM Re: Flat rate problems [Re: twh]  
Zapped  Offline
Joined: Oct 2002
Posts: 482
Huntington Beach, CA, USA
I once had a lawyer complain about my $150 bill for coming out at 10pm and finding and correcting a short in a light fixture that was knocking down half the lighting in his house. He couldn't wait until the next morning, and I told him up front what the minimum charge would be, which was $150.

This same idiot charges people $350 an hour, even if the phone call he just billed at 1 hour only took him 5 minutes.

I don't like the idea of getting hosed by a tradesman (or lawyer) any more than the next guy, but I've gotta agree with Trumpy on this one - expecting someone to be on call 24/7 and run out to your house like a paramedic when a problem arises, then griping about the price, is a very selfish and narrow view of the world and the value of other peoples time.

I'm sure that guy would much rather be at home or out having a life than running around for your benefit only.

#180690 - 09/06/08 11:33 AM Re: Flat rate problems [Re: twh]  
LK  Offline
Joined: Jan 2003
Posts: 1,429
New Jersey
Yes, that price was low for the service he received, customers, do not understand the real costs of doing business, they usually compare their hourly pay to other services, missing the largest part of the expensives, the service overhead and operating costs, that guy was lucky if he made $15 out of that $300.

#180691 - 09/06/08 12:31 PM Re: Flat rate problems [Re: LK]  
electure  Offline

Joined: Dec 2000
Posts: 4,262
Fullerton, CA USA
For off hours 24/7 service the last service company I worked for had as their policy:

1) Established customers only.
2) 4 hour minimum charge.
3) 1-1/2 times regular rate.

This resulted in a minimum labor charge only for $540

I think he charged low

#180692 - 09/06/08 12:50 PM Re: Flat rate problems [Re: electure]  
LK  Offline
Joined: Jan 2003
Posts: 1,429
New Jersey
After he paid his overtime labor burden, and after hours operating expenses, he most likely lost money, and din't realize it.

A local high rise complex maint super was telling me just about all the service contractors charge a min $300 just to look at the problem, then get $200 to 300 an hour per man, he said the electrical contractors are just about the only group they can play with and jerk around, they will jump every hoop just to secure a crumb of work.

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