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Photocopier Leasing Pitfalls – What Every Customer Should Know

 

Along with telecoms, the photocopiers industry has been one of the most frequently complained about by consumers in recent years. Sometimes it’s the high-pressure manner of photocopiers sales staff but frequently it’s the confusing way that photocopier lease deals are packaged, so that part-way into a lease agreement, consumers often find themselves feeling short-changed, misled or even conned. Here at Falcon, we’ve collated a list of what we think are some of the worst tricks of the trade, so anyone looking to lease a new photocopier or multifunction printer (MFP) will know exactly what to look out for…and importantly, who to avoid.

Free Photocopiers

Consumers should always remember that whichever the photocopiers company they deal with, photocopier leases are always structured in such a way that photocopiers will usually be fully paid off by the end of a lease term. Consumers should therefore beware of photocopier leases where they are not required to pay off at least something approaching the value of the copier over the duration of the lease through the monthly lease payments. Where brand new photocopiers are offered for free – that’s without any upfront payment for the copier and without any monthly rental charges – the only way the customer can be paying for it is through the per page copy/print charges. In the current economic climate, where barriers to credit are affecting the ability of many businesses to pay up-front for hardware, fixtures and fittings, free photocopiers, where the bulk of the cost is transferred into high per page copy charges, may actually be quite an attractive option. But users prepared to fork-out the higher per page costs should, where possible, only agree to short, ideally one year photocopier lease terms (and not be tempted into a ‘rollover’ lease). This way, as a good level of value remains in the copier after the one year lease duration, the photocopier leasing company cannot reasonably expect to recover its full value within the first year and can go on to lease it to other companies.

High Minimum Monthly Charges

Which leads naturally onto what is sadly another common feature of many photocopier leasing agreements… In the circumstances outlined above, one way for the photocopiers supplier to ensure it can recover a guaranteed and large proportion of the costs of a copier is to impose high monthly minimum charges. If monthly rental costs are low and customers have paid little or nothing up-front for a device, the photocopier leasing company will likely be making its money on the cost per page. For many customers whose main priority is to have a device available and spend a minimum amount on monthly rental charges and who aren’t looking to print/copy in particularly high volumes, this sort of package can make a great deal of sense. But when high monthly minimum charges are imposed, these effectively mitigate against the benefits the customers may have hoped to enjoy. Either customers will use photocopiers much more than they may have needed and at the higher per page copy prices or the monthly minimum spend isn’t reached and effectively becomes a rental charge. The safest way for customers to avoid this predicament is to calculate their likely usage requirements and not agree to any minimum monthly spends which seem to require much heavier usage than they’ll ever need.

Long Photocopier Leases

The very basic point here is that a photocopiers lease which would look appealing for 2/3 years should not, if the same terms were applied over 5/6 years.

As noted, usually photocopier leasing companies will expect to recover the full value of a device over the lease term. If the lease term is much longer, it’s much easier for the photocopier leasing company to recover the full value of a device and often to make quite a pretty penny over-and-above. Because the value of the lease and the photocopier leasing company’s profit-margins can be spread out, these deals may appear as attractive to the consumer as they are to the photocopier leasing company. Overall however, the leasing company will stand to profit gratuitously from these longer photocopier lease agreements and the consumer pay significantly over-the-odds. Furthermore, as new technologies are bringing improvements to copying, printing, scanning and faxing capabilities all the time, what seems good value now, will probably not appear so a certain time into the copier lease. Obviously, the longer the lease term you’re committed to, the longer you stand to be overpaying for old technologies if improvements in technology occur and costs for your existing technology become much more competitive. As a rule of thumb, for new photocopiers, customers should usually commit to a lease of 3 years and no more than five. For used devices users should not commit to lease terms of any longer than three years.

Rollover Photocopier Leases

Equally inadvisable is the rollover lease. As photocopiers are usually fully paid for by the end of a typical lease-term, rollover leases aren’t usually in the best interests of the customer. With many companies struggling to keep business afloat in these testing economic times, the temptation is certainly there to rollover on their photocopier leases, especially if the original lease was agreed on reasonably favourable terms. But rolling-over a photocopier lease from a typical term in most cases results in a customer making contributions to the supplier for the cost of a device which has already been paid-off. If a customer still requires servicing and included parts from a photocopier leasing company, he/she should negotiate an agreement for those services alone – and most reputable copier suppliers will offer the title to the device for no more than a few hundred pounds.

Commission Selling

Perhaps accounting for the insistent and sometimes aggressive approach of many photocopiers sales staff, it will come as no surprise for many with first-hand experience with the industry to learn that around 80-90% is paid by commission. In many cases, this leads to photocopiers sales people, over-zealous to increase their pay-packets, doing their utmost to persuade and sometimes even pressure potential customers into signing-up to photocopier leasing agreements which might not necessarily be in the best interests of the organizations they work for. It is in such weighted circumstances, more-often-than-not that many of the generally undesirable options outlined above will be offered. When committing an organization to instalments for three years or more, it pays to give all proposals proper consideration and not to make any hasty or hurried decisions. By choosing to deal with companies who are in the minority which are not commission paid, you also choose a much lower pressure sales environment where decisions can be made on the basis of what is right for your organisation and not what is easiest or most profitable for the copier sales person.

It is clear that the world of photocopier leasing is not always as transparent as it could be. Falcon hopes this short guide will provide organizations looking at photocopier leasing with several areas they should look out for. The best single piece of advice that can be given is for organizations to choose photocopier leasing companies whose sales staff are not paid by commission, which is often the motivation for many of the least desirable industry practices.

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