A recent thread spoke of contractors who, it was claimed, wildly overcharged for an after-hours service call. Why, if the work was declined, then the customer got billed for diagnosing the problem!

I think we've all experienced the customer who loves us ... right up to the moment the bill is presented. What can then follow is often a nightmare of hurt feelings, hard feelings, complaints to the Contractors' board, etc.

So ... How do you prevent this lose/lose drama from happening?

I am honest with people when they call. I do service calls on time and material with a minimum of 2 hours being charged. For me it is better than going out doing the job and then hearing the customer upset when you tell them how much at the end. The trick is to keep the customer updated on what you are finding when you are there and how long it might take to fix the problem once you have found it. Unfortunately you cant please everyone though.

Which, of course, inspires the very first complaint: "You can't even get him to show up for less than $200." Then your two hour charge seems unfair, since you were just there for 20 minutes ....

Some people are bound to complain whatever you charge, even if it's only 5$

You could tell them it's only $20 for the "hammer", ......and $180 for knowing where to hit it.

This is what I believe happened in the thread you mention.

The customer was quoted a $79 after hours dispatch fee. This is a fee just to come out look the job over and quote a price nothing more. Some customers I believe think this is for comming out and diagnosing the problem. I would try to make sure the customer understands that this fee is just a dispatch fee and after arriving at the job we will quote a price for the diagnosis and the repair before we start.

I believe in this situation, after the plumber arrived and looked the situation over he was fairly confident that the valve was bad but would not know for sure unless he diagnosed it.

The plumber then gave the customer a total price for diagnosing and replacing the valve of $303 plus the $79 dispatch fee. At that point the customer had the option of just paying the $79 for the dispatch fee and the price quote from the plumber.

If the plumber went ahead with the diagostics and determined the valve was in fact bad but she declined to have him replace it she would be charged the $100 for the diagnostics.

So in other words I believe the plumber told the customer that he suspected the valve was bad but would need to diagnose it to verify that was the case and that it would be $100 for the diagnostics and $203 for the repair. If the customer gave the approval to proceed then after the plumber completed the diagnosis and determined the valve was in fact bad the customer had the option of declining to have the valve replaced for the $203 and just paying for the diagnosis of $100 plus the $79 dispatch fee. The customer could go out and buy the valve and replace it themselves if they wanted to.

I believe the customer had the option to opt out at any time.

At the time of the initial call the customer could have declined to pay the dispatch fee and have the plumber come out.

At the time the price was quoted the customer could have declined the $100 for the diagnosis and just payed the dispatch fee.

After the diagnosis was completed the customer could have declined to have the repair done and just payed the dispatch fee and diagnostic fee.

I think you're on the right track.

The customer needs to be told, up front, on the phone, your fee to respond. That fee ought to cover a minimal amount of time; say, one hour of troubleshooting / diagnosing.

As soon as you have a diagnosis, or you have looked at the proposed job, it's time to present them with a written specification of what you propose to do, and for how much. Have them sign it. Or not. Pressure tactics (Lady, your house is going to catch fire!) ought to be avoided- period.
If they defer - for whatever reason - treat them graciously, with respect .... the attitude you wish to convey is 'of course you want to act responsibly, and I'll be here when you want me.'
After all, you've been paid for the first part - the service call. Be like Sears, and get that credit card # before leaving your shop.

Once you have their approval, agree on the work schedule. Does it need to be done NOW ... or can a patch be made, with a return trip after the parts houses are open? Are other trades needed?

In any event, your appearance, demeanor, attitude, ... everything ... ought to convey the message that you're happy to be there, that of course you're worth your fees, etc. Duct tape and baling wire just won't cut it with a $1000 job!

If you present things properly, "negotiation" won't enter the picture. If it does, it should be on your terms ... as, say, a deduction if they remove the bushes that are in the way. Otherwise ... here's your price, period. No more. No less. And payment is on completion .... meaning NOW ... not next week, or when the property sells, etc.

Keep it simple, keep it pleasant. Never surprise the customer with a whopper of a bill after the work is done. Never argue, lose your temper, or respond in kind ... even if the guy openly asserts you're a crook, and don't know how to run a business, if changing that fan belt costs $160.

It can get hard if he asks, at the outset, "why so much?" Avoid this minefield. He's not interested in a breakdown of your expenses, your overhead, or your investment. He's trying to open Pandora's box. Just say "this is my proposal ... I will do this job for $X .... I can come back later, if you want some time to consider my offer."

It may sound callous, but remember: just because it's an emergency for them does not make it an emergency for you. Let them sell themselves on the job.

Chances are, the 'difficult' customers have already asked several of your competitors over, and have applied the same tactics to them. They're trying to play one against the other. They may be concealing information, such as prior problems or work, from you. If they have time to do that, then it isn't a real emergency for them, either.

Since getting my own license, many have asked me - as soon as we meet, without ANY discussion of what work is involved - what my hourly rate is. There is NOTHING good that can come from answering that question. So far, I have responded by telling them to show me a specific job, and I'll give them a specific price. None of these 'tycoons' have accepted my offer of this free estimate/ quote. That suggests that their motives are not pure.
But I digress ...

The problem with that is, there are different levels of trouble shooting, that is why you can.t include the dispatch fee with the trouble shoot, we tried that years ago and always lost out, some trouble shoots like an outlet not working, can be an easy single room one outlet or the mullti room multi outlets, a big difference in the time requires to trouble shoot.

For me service call is $75 and $.60 per mile. The service call fee covers the first hours labor, after that it is time and materials, unless an emergency patch can be made and the job done at a more convienent time, if this is the case I will quote by the job.

LK, what was your solution for the different levels of troubleshooting?

Currently, we're at a $55 trip charge with $65 troubleshoot, and then a flat rate charge for the repair(s). We generally make out alright mostly because the homes we work on are less than 20 years old.

No 'free' quotes. That gets rid of a lot of tire kickers. The trip charge will cover the cost to provide the customer with a quote, if they wish.

For clarification, what defines a service call? Is it fter hours, during hours but emergency service, any scheduled visit?

I installed a whole house generator on a new home I wired. I don't service them only install them and do a start up which I may cease. This generator would not start. The service tech is comming out tomorrow to look at it. $89 service call fee, $79 for first hour. Should there be a service call fee for a scheduled, nonemergency?

Just wondering? Should all be under warranty anyway.

I use a similar system.

The Service Charge is to get the truck w/tech in the driveway.

The Troubleshoot Charge varies with the problem. There's a different rate for a single device, or a circuit, or a multiple circuit. I just simplify it into Level 1, 2, 3, etc.

Then there's the Repair Charge after you know the problem.

BTW if I'm troubleshooting a circuit and find the problem in the first device I usually discount to level 1. If a multiple circuit problem is the utility I discount it to a level 1 or 2. The idea is if you spend 3 hours digging in attic insulation to find multiple buried HO splices, you're covered & not going on a $50-100 service charge with troubleshoot included.

Also, if you didn't charge enough on the troubleshoot charge you can always add it to the repair charge. Working at a loss isn't a good option.

Dave you got it, that is the way to do it in steps, good for the customer and good for you. I sure beats the dart board or T&M method.

Why is the account being presented before you leave?
Is this a standard thing, in the US?
Sure, I realise that credit can catch you out in resi jobs.
Over here in NZ, you are sent an invoice to be paid by the 20th of the next month, that has fallen flat on it's backside in some bad payers, but the majority of customers DO pay on time.
Don't get me wrong, anyone here that asks for money before leaving the place would be looked upon as pretty dodgy.

In reply to that original plumbers thread, most of the "Call-out" charge these days is Fuel! and time spent driving, being stuck behind trucks and other such vehicles.
You are never close to the place you are called out to 80% of the time.
People seem to think that our vehicles run on fresh-air and that we wait around with our vehicles running in the driveway waiting for them to call.
Umm, No.

The bill is typically presented when the work is complete, and is due when presented.

Naturally, the specific job circumstances matter. Companies that do residential service certainly present the bill promptly, and may even want the credit card before work starts.

In commercial work, it is more common to present a bill on completion, but payment usually takes a few days .... the paperwork needs time to churn.
When are things complete? While there is some differences between contractors, this decision usually isn't made until everyone is happy that everything is working properly. For example, lights installed today will not be considered 'complete' until I come by tonight, to make sure they are working properly.

Naturally, there are some who take advantage of billing arrangements, and deliberately sit on the invoice for 30, 60, even 90 days. That's why this topic has come up so often in these forums.

During construction, the customer may be presented with bills during the course of the job. For example, to cover materials ordered and work already done. Again, the contractor often simply can't afford to be 'strung along' for months after the job is completed, and is breaking his risk into smaller pieces.