Returning a Copier (And the Drama That Awaits You)
Your lease is finally over. At last, you can return your old copier to your leasing company and trade it out for one that isn’t falling apart.
In that moment of happiness, you get the bad news: You will be responsible for packaging the copier AND paying to ship it to some random warehouse. If there are any damages to the machine in transit, they will hold you responsible for those as well.
When you call your copier leasing company about this freight situation, they tell you it will cost $500 to pack it, and another $300 to ship it.
You explain to them that you don’t want to do that.
At this point, they tell you that they can waive both of these fees under one condition: You sign up for another five-year lease for your next copier.
Why This Deal Is A Bigger Scam Than Most People Realize
What happened here is that the lease company wanted another contract, and the lease contract wanted another sale. They know that the copier has to get sent back, so they hold you hostage by skyrocketing the packing and shipping fees.
This tactic robs you of your ability to shop around and find a better copier lease deal. These companies know that you don’t want to deal with the headache of packing and shipping the copier, and you’re willing to pay an inflated price on your next contract to avoid dealing with the shipping headache.
For the leasing company to pack the copier for you, it would cost them a total of $40 for labor and a wildly reduced rate to ship it to an asset disposal company to get rid of it once and for all.
How to Reduce Your Financial Exposure to This Scheme
You can do these three things to protect yourself from paying sky-high rates and hidden fees for getting rid of your old copier:
Make sure you send a written letter to your leasing company 45-90 days in advance to let them know you intend to end your lease at the end of the leasing period.
Remove all the consumables and package them separately. Take pictures of everything at every angle you can think of. These pictures prove you took every precaution possible to ensure the copier and all of its parts make it safely to their destination.
As you put out the new copper to get a quote, let the dealers know you have (or will have) a packaged copier on site. Tell them you need to send it back and ask them what they can do to help with the freight costs.
You can return a copier if you don’t follow these steps, but you want to take every precaution possible to avoid getting conned by these companies looking to fleece you for every dollar they can get.
Is a “Free Color Upgrade” the Right Move for Your Business?
Copier companies are always inventing ways to extract more money from your wallet. One method they cooked up is to start selling you a black and white copier, then try to switch you over to a color copier at “no extra charge.”
Why Are The Copier Reps Making You This Offer?
With a color copier, with far more components than a black and white copier, is being sold to you at no extra charge, you need to ask why they’re offering you this tremendous sounding deal.
The copier reps are offering this deal to you for one primary reason: they want to own your color prints. To a copier company, color prints are where they make the real money from you.
Are there any reasons Why You Would Want to Take This “Free Color Upgrade” Deal?
With the aforementioned in mind, there may be some reasons why you might still want to consider taking the free color upgrade. Here are a few examples of why taking such an offer might benefit you.
You need a color printer anyhow, and this deal would save you money.
Your company would only use color in particular instances.
You know the difference between “black ink only” gray and composite gray
You are using a high-priced color printer to help with marketing
When Is Taking The Free Upgrade Offer a Bad Idea?
You will also encounter some instances where a free color upgrade would be a terrible idea across the board. Here are some of those instances:
When employees abuse the amount of color they use when they make prints
When you are running a color printer which costs $0.07 per copy or less
When you need a more reliable copier – Black and white copiers have three or four replaceable parts, where the average color copier has between ten to fifteen. Because of their more complex designs, color copiers will break down more often.
When you don’t need color printing in the first place
Only Take The Free Color Upgrade When You Know You’ll Need It.
Keep the costs in mind when you decide on getting a color copier. If you print 500 color pages a month (or 20 or so pages per day) that you’re not expecting, you will lose an extra $2,500 on a four-year copier lease.
You have to do what’s best for your company. Consider the long term impact of taking a “free color upgrade.”
How to Protect Yourself from Common Miscellaneous Copier Fees
One of the most typical complaints that customers have when leasing a copier: they thought they were signing up for one deal, and then that deal changed on them, or the vendors added additional fees.
Because of these added fees, their customers are motivated to change the vendor they want to work with because they feel that they got cheated.
Having a copier vendor hit you with miscellaneous fees can irreparably damage the trust a customer once had in them. Here are some of the most common way that you might get hit with extra copier costs:
You may find a provision in your contract stating that “Contract rates are raised throughout the contract.”
Having the rates adjust for inflation would be fair. However, vendors can use this to raise their prices by 12 percent because that number is in the contract.
Here is How to Protect Yourself Against Skyrocketing Annual Rates
Protect yourself from this by having the “this contract can be raised by x% per year” provision removed entirely from the contract.
If complete removal of this clause isn’t possible, negotiate down to a fairer rate.
Any company that can get away with raising rates on its customers will raise them. You would be smart to negotiate a lower annual percentage hike to mitigate the potential damage to the company account.
You can also get nickeled and dimed through “consumable fees.”
Another common way vendors nickel and dime you is through a charge called “consumable install fees.”
Here Is the Simplest Way to Avoid Paying This Consumable Install Fee
The best way to not pay this ridiculous fee is to learn how to install these consumables into your copier yourself. Taking five minutes to learn how to install them will save you around $300 to $500 every year.
Thankfully, most consumables are easy to replace, and there is no real need to involve your copier company in any way. When you know how to change your own consumables, there are no consumable install charges to pass on to you.
Keep Your Eyes Open for Other Hidden Fees
There are a lot of hidden fees you need to watch out for. It’s up to you to reduce as many liabilities as possible so you can have a fair copier contract.
The Ugly Truth About Automatic Copier Lease Rollovers
You are coming up on the end of your five-year copier lease. You are looking forward to sending back this copier that has caused nothing but grief for the last few months.
However, something happens that stops your celebration dead in its tracks. You open an envelope from your leasing company and get a bill from your leasing company for three more months. You try to talk with the agent to overturn the bill, but it was all for nothing. You’re now stuck with this copier for an additional three months.
How Did This Extra Charge Happen?
In almost every copier lease agreement, the leasing company will insert a provision that allows them to bill you continually unless you give the company a written notice that you intend to return the copier when you finish your lease term.
This simple mistake costs you between $600 and $1,000, and you get to deal with three more months with a copier on life support.
How Do You Stop This From Happening Again (or the first time)?
Look at your lease contract and find the date your lease expires. You need to give the leasing company your written notice between 45 and 90 days before it expires. No sooner, and no later.
To make sure you remember to write and send that all-important written notice, put a reminder in your calendar in between that window of opportunity. Compose the letter ahead of time, and send it out the very second you reach that 90-days-left mark.
Once the leasing company receives your letter, they’ll give you instructions on what you need to do with the copier.
Follow this One Simple Step to Save Hundreds of Dollars on Your Copier Lease.
This stipulation catches many people by surprise, and that’s how the copier leasing companies like it. By keeping track of your lease’s expiration date and sending your letter out between 45-90 days out, you will save yourself money and grief.
We can start with the basics. And then we can go from there into some of how to save money and other things like that.
How to Acquire a Copier
So the first thing is a corporate lease is a way to acquire a copier. You can also purchase a copier. Lastly, you can also rent a copier, or you can lease a copier.
And then on top of the leasing plan, you’ll have a supply and service plan, which will take care of the following:
Ink
Service
Parts
Labor
Delivery
and more.
So what we’re talking about here is the getting of the physical equipment into your office.
So getting, let’s say, for example, this Xerox CAD 30, and you want it in your office. This lease is a way to get that in there without putting $6,000 or $7,000 down, plus having a monthly payment of $130 to $150 a month.
How to Calculate Your Copier Lease Rate
The first thing to know is there are tables. When we’re making a copier sale, we’re looking at a table kind of like this:
Q2 Leasing Rates
A Fair Market Value lease means that at the end of the contract, the copier gets returned to a warehouse, and then you’ll be responsible for the shipment of the copier to that warehouse. You’ll complete your lease at the end of the term.
We also have a $1 Purchase option, which means at the end of the lease, you pay a dollar, and the copier now belongs to you.
You have different rates basically because, on the Fair Market Value lease, they’re giving the copier back, and there’ll be a value to that. The $1 Purchase Option lease lets you keep the copier, which is gets factored into the numbers on the table.
What you end up doing is you will take the amount that you’re financing. So let’s say it’s $7,000, and you are going to do a five-year lease. You would be in the $3k to $10k band right here. And so you multiply by 0.0195, And you would end up with about $136.50 on a fair market value lease.
On a dollar out lease, you would do the same thing. You go to the 60-month term, and you see “0.0208.” So you would go $7,000 x 0.0208, and that’s $145.60. So about $9 per month difference. And then $9 x 60 is $540, which is about what it costs to ship it back at the end, anyway.
So, I would tend to do the $1 Purchase Option because then I have an option to run it further afterward. If it’s still running great, I could sell it on Craigslist or use it as a backup.
Other people want to have the payment as low as possible. And they’re going to depend on the copier company to take care of that shipping fee, which will get rolled into the next lease, at the end of the contract.
So that’s two different ways to do a copier lease. And as you can see, there’s these different stairsteps. And so between $1 and $3,000 has a different lease rate factor than between $3,000 and $10,000.
So technically speaking, if we go $2,999 x 0.0235, and that would be $70.47. But if you go $3,000, so you just raise it $1, then that’s $58.50, so it’s $11.50 a month and almost $700 total. So that $1 difference in price makes a $700 total payment difference.
We try to focus on how we make sure that you’re in the right part of the stairsteps so that you can get the best rates possible.
Technically, it may mean adding a hundred dollars to your cost to ensure that your price goes down based on the lease rate factor.
Automatic Renewals
And the next you’d want to know is usually on any of these leases, towards the end of the lease, they have a clause that will do an automatic renewal. And so it’s always good to mark that into your calendar system that will let you know 60 or 90 days before the end of the lease.
You don’t want to automatically renew the year-long copier lease because you’ve already paid for the copier, and now you’re just basically giving the bank extra money.
So it’s pretty much always a bad deal to renew. If you do it a month or two, it’s not the end of the world. If you start doing it for a year, that’s just wasted $1,400 – $1,500.
So I like to have a reminder put into the calendar that lets me know on month 56 that we’re coming to the end of that lease. Ensure that you give the appropriate notifications because there’ll be a clause that says that if you don’t renew within a specific timeframe, you’ll have to keep it for maybe another three to twelve months depending on how it’s written.
Automatic Escalation Fees
One of the other things I try to look for within a lease is automatic escalations.
What an automatic escalation is, is it’s going to take the number like where we had here, $60 a month for that $3,000 copier, and it’s going to say, every year we have the right to raise the lease rate a particular percentage The standard percentage is somewhere around 10%.
So the $60 a month will go to $66, and then it’ll go $72, then $78, then $84. So by the time we hit $84 a month when the rep comes back around, it’s easier to say, “Hey, we can get you into another copier for just $60 a month, basically where you were though at the beginning.”
If you didn’t have that escalator, it would be harder to roll the next copier in because that escalation makes your lease payment higher each year. So I always would avoid escalation fees.
It’s easy for most copier companies to take that out of their contracts. We’d always recommend that when you lease a copier that you make sure you don’t have an escalation fee.
And be sure to mark down when the lease is supposed to expire.
Coverage Limitations
The next thing I would pay attention to is the idea of coverage limitations. That’s on the supplies and service agreement.
So, each copier is rated to do a certain number of pages per toner cartridge.
So if you think of it like each toner cartridges is like a gallon of milk. Each page comes out and expecting that you’re going to get so many cups of milk out of each gallon because a cup holds so much fluid, and you can multiply that out and determine how many cups of milk you’re going to get. They use the same kind of logic for pages.
So you have a toner cartridge, which has a bunch of toner in it. And each page that you print is going to utilize a certain amount of that toner. And it’s based on a recovery trait, and usually, that’s 5% per color. So the color is 20% because there’s four colors, cyan, magenta, yellow, and black. The black and whites 5% coverage is a typical industry average because it’s only black. There’s no cyan, magenta, or yellow to take into account.
What happens on some leases or some service plans is that if you exceed 5% or above 20% color coverage, then there can be a multiplier added to compensate for the toner usage. So if it turns out that you’re averaging 30% or 40% coverage, instead of 20%, your color rate can rise by 1.5 to 2 times. Check to see if there’s a penalty if you exceed a particular percentage within your coverage.
And so that’s something else that we look at and try to make sure that, you know, if you’re going to lease a copier that you’re paying attention to your coverage, or getting ideally a lease contract that does not have a penalty on color coverage.
What to Look For in Overage Charges
You also want to see what your overages are. Overages technically should be lower in price, not higher, if you exceed the base.
What will happen on a base is that you’ll get a certain number of prints.
So we can use an example of 10,000 prints. Let’s say they’re all black and white just to make it simple. And they’re a penny apiece, so it’s a hundred dollars a month, and you get 10,000 prints. And then once you exceed 10,000, you get billed per print for any that you do over 10,000. So if you do 11,000 prints, then the last thousand would be charged at the overage rate.
Often, I’ve seen that people will make the overage rate higher than the base rate, which doesn’t make sense because most of the service should be contained in the first part. And the overage should be cheaper because the service is already included in the base. And because the copier company is going to want to make sure that their service department is whole. So they’re going to make sure that the service is in there, no matter what. And then, once you exceed that base, the service part has been handled, more or less.
Of course, the more prints to do, you will have more service calls. So there is more service expectation. So you would expect more service calls, but the cost is going to be lower because you don’t tend to find a one for one ratio there. And so if you’re at a penny per page for 10,000, we would expect that once you exceed 10,000, it should be nine-tenths of a penny or something like that. It shouldn’t be 1.2 cents after you hit the 10,000.
Keeping an eye on your base rate, then comparing it to the overage and making sure the overage is lower than your base is a good idea.
How Does a Zero Base Contract Save You Money?
I’ve noticed that a lot of customers are concerned about having zero base. Zero base would be ideal if I were buying a copier because then you’re just paying for what you’re using. You’re not paying for 10,000 prints and then only doing 5,000, and therefore your effective cost per print doubles. So I would always personally get a zero base contract unless I got a massive discount for the inclusions.
So if I went from $0.015 down to $0.01 and I was pretty sure that I was going to use 10,000 and it saved me half a penny per page, then, of course, that makes sense because I prefer to keep the $50 per month. If I wasn’t sure if I was going to do 10,000, there’s no way I would sign up for 10,000 pages because it’s like, they’ll do 3,000 in 1 month or 7,000. And in those months, I’m going to lose 7,000 pages that I purchased.
So I would always say whatever you think your minimum month is that you should do roughly 80% of that rather than signing up for your average because your average is going to fluctuate.
You’ll have some months that are higher than your average and some lower months. So, I would take my lowest month, and then multiply that by 80%. And I would use that as my base.
This way, I knew whatever I was doing, for example, if there’s a pandemic, like what we’re going through currently, and nobody’s working at the office, I’m not stuck paying for 10,000 pages a month while everybody’s gone.
So the idea is to pay for what you use, don’t pay for what you’re not using. And so that’s an essential thing also within your service contract.
Why Higher Copier Speed Isn’t Always Faster
One of the things that we see from some people is if they are looking at different products, what they’ll end up doing is getting, for example, a Xerox Altalink C8070 for $219 a month and 70 pages per minute because of speed.
And so one thing to be aware of is that sometimes these high-speed copiers, like the C8070, go 70 pages a minute when it’s fully warmed up, but it may take longer to warm up.
So, people will take a fast one because they want to go fast like this instead of a slower one. After all, they’re thinking 70 pages per minute is twice as fast as 35.
The one thing to be aware of is that many of these copiers producing 70 pages per minute, anything over 50, can often take longer to warm up. And then if it’s a small job, you’d go faster by having the smaller, more compact copier.
So it’s not always that the higher rated speed is the faster copier. One thing you need to look at is the warmup time because if you don’t factor in the warmup time, it could take 30 seconds to warm up in eight seconds for the other.
So you have 22 seconds of it being able to print, and most of your print jobs will be just a few pages. And so you could find that your day to day printing is slower by going with the faster copier.
It sounds kind of strange, but one thing to keep in mind is the more small jobs you have, the less that speed matters. The more long jobs you have, the more speed matters. If you’re doing 2,000 pages, you know, reports or 1,000-page reports, or even 200 page reports suddenly going 70 pages per minute, it starts making more sense because it takes three minutes to do that job instead of six on a 30 page per minute copier.
That’s something to keep in mind: the longer your jobs are, the more essential speed is. The shorter your jobs are, the less important speed becomes.
Duty Cycle Considerations
There are also duty cycle considerations. If it’s 10,000, 20,000 pages per month, you’re still probably going to want to go to a higher-end model just because of the print volume, not because of the speed requirements. So that’s another thing to consider.
I hope this was useful to you because you know that’s our goal here at Copy Lease Center is to provide great information to our clients. And so if you have any questions or concerns, please feel free to give us a call. We always work to get you a fair copier lease, and we’d love to chat with you. Thank you so much.
Are you looking to lease a Xerox copier? We have all of the Xerox copiers for lease for your business, both color and Black and White copiers – Letter/Legal and 11×17 copiers too.
Some of the common models we lease are: (For Basic Offices)
And for the high end offices, we also have the Xerox Primelink C9065 and the Xerox Primelink C9070.
One of the things we work for, is to “right size” the copier for your office that makes the most sense for you.
With the Versalink series, these seem to be more for the smaller office with the lower print volumes. The Altalink series is more for a higher volume office. If you are thinking, “what is a higher volume office?” – I would say the Altalink series starts to make more sense when doing more than 1 box of paper per month.
If you are looking to lease a Xerox copier, we can help anywhere in the USA. We are able to walk through your options.
