Service Contracts - Part I, Copiers

Welcome to our three part series on service contracts. Service contracts can vary for copiers, fax machines and laser printers, so in this series I will cover them individually in three separate articles. Just for clarification the type of machines that I am covering in these articles are the commercial types. Inkjet copiers, inkjet fax machines and inkjet printers are not covered in this article. The need for contracts on equipment such as these may not be cost effective. The equipment that I believe you should cover on a service contract are high volume copy machines that are designed to make thousands of copies, prints or faxes per month.

Service contracts are similar to an insurance policy. They may or may not save you money. Your costs are fixed so you will know how much per year you will spend instead of hoping that it won’t break down too much or have a serious or expensive repair during the year. There are many ways of paying for a service contract. Most service companies will bill you monthly, quarterly or annually.

If you choose to be billed monthly, your service company will call at the end of each month and gather your meter reading. Then they will multiply the amount of copies by your cost per copy. Some copiers can also be equipped with a device that can send in the meter reading automatically each month and eliminate this part of the procedure. If you don’t make many copies I would choose an annual or a quarterly billing. This is because most service companies charge a monthly billing minimum and you might end up paying more. Another reason to choose quarterly or annually would be the job of having to write a check each month and deal with getting the meter readings. On an annual contract make sure that you keep an eye on how many copies you produce or you will be paying for copies that you don’t use or you may have to renew too soon.

Cost per copy

Cost per copy is the most common way of determining the price for service contracts. Each time you make a copy the meter clicks just like the odometer on your car. Many shoppers buy their machine according to the price of the cost per copy, since the service contract costs can often exceed the price of the copier. An average cost per copy is around 1.5 cents per copy. This could be lower or higher depending upon some variables. •How many copies you make per month. •What type and age of machine that is being covered. •Environment plays a part because if it is in a dirty environment it will need twice as much service than a machine that is in a clean environment.

Figuring copies per month or per year

Determining the amount of copies per month is the most important information you will need when shopping for a service contract. If you have an existing copier that has been on a contract for awhile then this will be easy. Just look at your history. You need to also take in account for any slow downs or increases in copying that your company is experiencing. If you do not have a history there is a way of estimating. If you know how many reams of paper that you use per month you can multiply by 500 because there are 500 sheets of paper in a ream of paper. This will get you in the ball park.

Coverage

Understanding what is covered and what is not covered is very important to find out before you purchase a service contract. Many service contracts do not cover Staples, Paper and document feeder belts and there may be some others so check with your service provider. Does the contract include supplies? Some supply items are toner, developer, heat rollers and drums. Find out what the hours they are available and days of the week that they operate. Which holidays do they take off? What is the response time? Is their four hour response time more expensive than their next day service? Most service contracts do not cover abuse or neglect. So be cautious with those paper clips and staples as they can cause an expensive repair and it probably won’t be covered. Get all of this in writing then there will not be any surprises.

Accessories

Some companies charge extra for each individual accessory. Such as, an automatic document feeder, finisher, and large capacity cassettes. Some may still be charging a flat rate for each unit but I don’t see this too often.

Scanning

We live in a new age and with digital copiers you can now scan to your computers. Using the scanner puts wear and tear on the automatic document feeder but the parts in the copier are not being used. Digital copier machines can count scan only images so there may be an additional cost for this. I know that service companies in our industry are kind of scratching their heads on this one because it may be hard to charge for this type of service.

Color Copiers

Service contracts for full color copiers and MFP’s are essentially the same as black and white service contracts except that you will be paying for a color copy or a black and white copy. Some average pricing will be around 1.5cents per copy for black and white and 10 cents per copy for color. If you have ever purchased toner for a color unit you know that color toner is always more expensive.

Connectivity

Most service companies will set up your newly installed copier to your network free of charge. You should always have your IT person on-site at the time of installation so they can answer questions about your particular network. Installing drivers and connecting equipment to your network is fairly easy depending on your system. Existing network problems or additions will most likely not be covered on the copier service contract unless you make an agreement with your service company ahead of time. Most network issues can be handled with your Computer specialist anyway.

You will have to decide for yourself or your company if you will purchase a service contract for your copy machine. Many companies do pretty well without one. They always have the machine serviced and parts and supplies replaced as needed. The only problem is when you have a circuit board or a time consuming problem to repair. This can sometimes cost you a hefty amount of money and a service contract can really pay off. Remember a service contract is like an insurance policy. It can create peace of mind and you will know in advance what your costs will be.

Look for my next article in this series. “Service Contracts - Part II, Fax Machines.”