The word “free” is the most powerful tool a marketer has to lure customers into an offer. Unfortunately, scammers also use this word to lure people into terrible deals. This “free” upgrade is one of these situations.
A copier rep will contact a customer who has roughly a year left on their contract, and they’ll tell that customer that they’ll give them a free copier upgrade if they sign up for another contract with them.
The Inner Working of the Free Upgrade Scam
First, what is the motivation for your copier company to offer you a free upgrade?
A copier company needs to make new sales, and leasing companies need to sign new contracts. To these ends, these companies join forces and create a plan to accomplish both of their goals in one shot.
The leasing company cuts a deal with the copier company; they’ll forgive a couple of payments if they can score another long term contract. Occasionally, the leasing company will also defer a few payments.cca
A copier company will look at the equipment portion of the lease (which accounts for half the total) and work to wrap the price into the next lease and try to stay under retail price. They’ll also go to the manufacturer to see what kind of financial incentive they can secure. However, these savings don’t get passed to you; the copier company takes these savings to pay off what’s left of the payments.
How This Scam Hurts Your Company
Here are the top three reasons why this deal is terrible for your company:
Had you waited, your monthly costs would be lower.
The discount that the copier company got from the manufacturer could have saved you money had you not had time left on your current lease. Your long-term costs could have been lower as a result.
This process works better when wrapped into a five-year lease.
To make the financials work for this scheme, the copier and leasing companies aim to sign you up for a five-year lease. Also, copier technology evolves at a breakneck pace, so these companies know that you’ll want to upgrade at around year four.
If you were able to ride out the remainder of your lease, you would be able to pay much less per month on your next lease.
You surrender all leverage to the copier company and the leasing company.
This part is the real endgame for copier and leasing companies: the ability to stop competition from taking their sale away.
Because competition no longer exists, the copier and leasing companies no longer have any incentive to give you a good deal on your next contract. They blind you with the “free” upgrade and boost the monthly price behind the scenes.
The Best Defense Against the “Free” Upgrade Scam Is Patience.
The second you finish your lease, you now have access to competitive rates for a brand new copier (should you choose.) If you have a five-year lease, ride it out, and watch your patience be rewarded with thousands of dollars in savings throughout your next lease.