Fax Machine

How To Spot The Pitfalls Of Managed Print Services

Managed Print Services are arrangements offered by print providers to manage your printing devices, including scanners, faxes and copiers. They are sold to organisations to help improve efficiency, productivity, and information security through arrangements ‘tailored’ to each individual business, according to need; at least that is what the providers marketing departments will have you believe.

The features of managed print services will differ from supplier to supplier. While on the surface, they appear to offer time and cost savings, improved efficiency and cash flow benefits, in reality, many of these agreements leave businesses paying out far more than is necessary and over a much longer period than is expected or wise.

Buyer Beware –  hidden costs in seemingly ‘attractive’ contract terms

A recent client was caught out by the seemingly attractive terms of a managed print deal.

They had been sold multiple machines for their business on a managed print service arrangement. The client understood this to mean they would pay an agreed amount each month to print up to x number of copies in total. This agreement included a minimum number of copies the client was duty-bound to use each quarter to finish the agreement on time. If the client fell under this limit, the agreement would be extended. If he went over the maximum, an additional cost per copy would apply, but the agreement term would reduce.

What wasn’t clear to the client was that the limits were applied to each machine and were not aggregated. So when it came to checking his totals, he believed he was well within the accepted margins of use. Unbeknown to him, the machines in his offices’ lower traffic areas had fallen under the margin, while the devices with the greatest use had breached the upper limit.

This resulted in higher per-page copying charges (28-30p for a black copy) and, subsequently, a lengthy extension of the agreement period. The consequences of the amendments to the original agreement left the client with an extra bill close to £60k.

Managed print service contracts are not usually set over time – but rather set by the number of copies you achieve. When you reach that specified number of copies, you are released from the agreement. You can’t get rid of that contract until you’ve done the minimum limit on ALL of the machines in the agreement.

A feature of managed print services is a regular review of the usage, and the agreement is adjusted to accommodate the changes in usage.

Increased print volume without rhyme or reason

The print dealer, in this case, had continually increased the minimum prints required when he came back each quarter. So the agreement, which started at 190,000 copies in total for the agreement’s life, had ended up at just over 1.4 million. Bearing in mind the nature of the agreement, you might imagine the cost per copy would reduce with each increase, but this was not the case for this client. And there was no apparent rhyme or reason for the volume increase or the cost increases.

You’d think the initial agreement would cover the dealers costs in the initial number of copies. Had the original agreement not been adjusted, the agreement would have expired 18 months ago. As it was, they still have at least three years to run. The client had allowed these regular uplifts to happen on the understanding it would ‘save’ money on the excess copy charges he was paying in ‘overage’ on the high-traffic machines.

This is a common problem with managed print services – particularly when adjustments are made according to usage during an exceptional quarter. For example, another client, whose usage during March 2020 was unprecedented when they made thousands more copies than usual for information sheets as the pandemic took hold. They breached their upper limit on one machine, incurred increased copy prices, and their minimum quantity was adjusted upwards. Based on that one month’s usage, caused by the outbreak of COVID, they have been paying a huge sum ever since.

Approved suppliers will ensure no hidden charges

But not all managed print services are set up this way. Some providers will take quarterly readings and have no minimum billing clauses in place, you simply use as much as you need and pay only for what you’ve used. No payment for usage in advance. Arrangements like this pullback to traditional charging methods when clients were sold ‘packs’ of 10,000 copies at a time – no lengthy contracts or hidden charges involved. Our approved suppliers have all signed up to the Fair Contract Charter and offer similar arrangements to this they will never tie you into a ‘use or lose’-type trap.

Businesses are finding themselves stuck in this cycle, realising they have massive minimum copy limits they know they’re never going to achieve. It’s so easy to get drawn into contract adjustments that appear to overcome this issue but do the opposite. If you’re offered a deal like this for your business, think about it this way. Why would you pay for petrol you know you’ll never use, and you can’t give back?

If you need advice on a new office equipment lease or purchase you may be considering, Fair Contract Associates offers a free contract checking service. We’ll not charge you a penny unless we know we can help you save money. So stop worrying that you might fall for a scam contract and schedule a call today for peace of mind you’re getting a fair and honest deal.