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Green Office Blog

Overcharge: What No One Is Talking About

Posted by Melliza Giliomee on Sep 11, 2019, 12:00:00 PM
Melliza Giliomee

The expectation to deliver on an effective and efficient print environment for customers is becoming more and more important, whether it is a big corporate business with almost 3 000 assets to keep track of, or a small church down the road relying on one device to do the job. No matter your business size, you will most likely need to invest in a reliable partner to manage your devices and office automation space.

By investing in a partnership, you trust that the prices and terms presented to you are market-related and that the solution offering is a bargain because that is what the sales representative has told you…. right?

The sad reality is, more often than you’d like to know, most people are being taken for a ride and are unknowingly paying more than they should. No matter how big or small your business, if you are not an industry expert, it is crucial to get another set of eyes to review the “deal” you’re about to sign off.

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We would like to share a horror story with you of how a church was being overcharged by another Office Automation company - and they didn’t even know it.

During our first engagement, the customer told us that their contracts with their incumbent vendor were coming to an end, and they were just interested in benchmarking their print solution with other vendors to  compare market prices. We provided them with a benchmark and some advice to assist them in choosing something that will be best suited to their needs.

Keep in mind – the church had one Multi-Functional device, with a simple finisher attached to the machine in order for them to print and bind booklets for services on Sundays. It was a colour device printing on average 20 000 pages per month. This was not a big job by any stretch of the imagination.

As we unravelled the church’s current contract with their vendor, we discovered how dire the situation really was. The client was being overcharged by a ridiculous amount. Every contractual clause you can think of that could negatively affect the customer was included in this contract.

Our assessment revealed that the device should have a rental amount of +/- R3 900 per month.  The church was charged in excess of R20 000 per month, thus resulting in an overcharge of more than R16 000 per month on their rental alone! Crazy right? It doesn’t stop there. Their rentals were escalated on an annual basis when it in fact should be fixed for the contract term, as per the industry standard.

Their cost per copy (CPC) rate seemed in line with market pricing at first (8c per mono page and 50c per colour page) but with further investigation, we have found that this rate was only valid for the first 1 000 pages. This was below the actual volume that the device was printing, and all pages printed over and above that immediately escalated by more than 20%.

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It was clear that this church was being ripped off. Upon exposing their vendor, the client decided to rather cancel their contracts and move over to a trustworthy company who they can rely on and build a long-lasting, sustainable partnership with.

If you want your contracts vetted…. just to be sure, please contact us for a quick analysis.

Request a Call from Green Office

Topics: Service Level Agreement, Managed Print Services, Managed Print Environments, CPC, Vendor Management, Managed Print Expectations, Office Automation and MPS, Green Office, Office Printing