Not too long ago, a church called us furious at Bigg Elevator for an invoice totalling over $1100 for changing a light bulb. It was the tiny light bulb behind the position indicator (floor number) in the car. Why in the world would this cost $1100?
For starters, they had an exam & lube contract with Bigg Elevator. It specified the rate they paid for a quarterly maintenance visit, but just said that any work performed beyond the quarterly maintenance would be paid at time and materials at the rates currently in effect.
How did this federal-government-sized bill come about? The church had their annual inspection, and the inspector noted that the PI bulb was burnt out. Not an emergency by any stretch of the imagination. Rather than think economically and have the mechanic take care of it on his next visit, Bigg Elevator scheduled a special service call. The mechanic they sent came from their home office, about an hour away. He drove for an hour, spent 5 minutes changing the bulb, and drove an hour back home. Since Bigg Elevator’s policy was minimum one-hour charge while on-site, they billed for 3 hours, plus some mileage. At $375 per hour.
$375 per hour is a retail price, and quite honestly, it’s way above market in our warren of small towns we call “downstate” Illinois. You typically need to be on one of the coasts to see hourly rates that high. But because there were no rates specified in the contract, Bigg Elevator could charge whatever they wanted.
What is the point of having a contract if you don’t get a benefit in return? In this case, Bigg Elevator got all the benefit: the customer promised to use them for all their repair needs, and pay them whatever they charged. Yikes!
Lessons for you:
- When you sign a contract, specify the rates you’ll pay for anything not included in the monthly/quarterly fee. And don’t agree to let them automatically go up without your consent.
- Require advance estimates or quotes before any work is done. Some things, like changing a PI bulb, are easy to quote. Other things, like troubleshooting why a button isn’t working or a door isn’t closing are unknown, but they can tell you a price per hour and an expected range. This will help you avoid sticker shock.
- Require that they schedule any service visits in advance. That gives you the opportunity to ask questions about what it will cost and suggest alternatives like “have the mechanic do it next time he’s here.”