Adjustment Fees, Triage Fees, Greed or Survival?

 

When was the last time you rented a car? Facility fees, and recoup fee, local tax, city tax, state tax. Want to prepay your gas? Bring if back on fumes if you want the real value. If you forget to gas it up, $4 something for the gas plus a  fee for filling it up. Next we will pay for vacuuming the car out, although to be fair some people destroy the inside of their rental car.

Now on to the hotel. A local tax, city tax, state tax, and then a resort fee of X dollars on top of a fee for Internet, coffee in the room and a nominal charge of $2.00 a day for the news paper unless you opt out.

Then there’s the repair shop invoice, plus microscopic line item billings,with a percentage for miscellaneous charges, waste disposal fee, oil disposal fee, EPA fee, environmental fee, nuts and bolts fees, rags, pictures, the new “triage fee” of $200, plus battery and tire disposal fees.  All real costs associated with a shop
Now check some of your own bills at home -- fees, fees, and more fees. Cable company comes out and checks your signal to see if it’s weak. Now there is a fee, hidden in the conversation when you called them, deep in the bill.
 
I often wonder are these charges needed because we want keep the basic rates for vehicle repairs low, or is it just greed?

Mad Yet?

So what does this mean? Well a few weeks ago I went on a NRT tire scrap analysis inspection, something I tell everyone they should do each month. Check each and every tire. As we were going throughout each tire, looking at damage, abuse, side wall cut and bruises, I was happy to see credits that came from the tire company for capping and casing failures. Boy was I feeling good after looking at all of the damaged tires costs that go into our CPMs. Some credits that I could show the beanies, beating up the vendor as the industry likes to brag about. I call it paying me for what we already paid for!

As I had a few brand new tires and a few new fresh recaps, I was curious about the formula on the credit adjustments works. So I asked, “Explain how do we do this? How does it work?  

Well, it is prorated.

Oh OK, how does that work?

Well on the new tires, it’s based on 32nds.

Oh good.  What credit do I get on this new tire?

The answer was 16/32nds.

OK, what about this recap?

The answer was the same!

I asked how does that math work? The new tire is actually 23/32nds and the recap is 22/32nds. What is a 32nd worth?

Well silence, and as a good salesperson would say, ask the question and the first one to speak loses. His answer? We keep a few 32nds on each credit for the administration and processing fees for the credit transaction.

There are those fees again.

So I said, here are my credit fees, tire mounting fee, tire dismounting fee, tire remounting fee, plus truck mileage, air compressor fee, clean air fee, oh and miscellaneous charge per tire. I forgot environmental fees.

Summary, you might want to check to see what you are getting for credit adjustments after fees hidden or otherwise. you might just want to run out the tire on a trailer. It may have more value running than credit value. Check! Is it fair or another case of P&L greed?

For more information, visit www.darrystuart.com.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish