Pricing  trends in the “Appliance and refrigeration repair service” field

Observations of a service manager

Key-words and topics covered in this article:

  • Estimates
  • “Free Estimates”
  • “No Service Charge with Repair”
  • Appliance service “Trip Charge” or “Diagnostic” fees
  • HVAC service “Trip Charge” or “Diagnostic” fees
  • Advice on how to get the lowest price: Ask for a phone estimate…!
  • Labor repair rates for appliance and HVAC repair
  • Flat Rate price range: Appliance & Heating/ Cooling/Refrigeration
  • General profits on Appliance Repair after parts (“Flat rate”)
  • Hourly rates for appliance service
  • Travel Charge
  • HVAC and commercial refrigeration service labor rates
  • Typical 30 Day Warranty for Labor and 90 Day on Parts
  • Pricing theory: Understanding the motives behind retail markup for parts
  • How consumers can save
  • Consumer comparison shopping behavioral trends
  • Effective vs. ineffective “Comparison shopping”
  • High-end products repair rates
  • Consumer behavior patterns
  • Economics of supply and demand and the cost of new replacement product impact on repair rates
  • Compressor replacement rates for residential refrigeration
  • Reason why is it hard to find a fixed “repair” “price list” on most repairs”
  • Refrigeration”Leak Repair”:
    • A Common misconception about “fixing” a refrigerator or HVAC system with a refrigerant (aka “freon”) charge

Estimates: “Service Charge” rates (abbreviated S.C.) also known as “Trip Charge” or alternatively a “Diagnostic fee” are as follows:

Most established Appliance repair companies charge between $59 to $75 “Service fee”, “Service Charge”, “Travel fee”, or Initial/basic “Diagnostic fee” to show up.

In places where parking is restricted, or  such as in Manhattan, NYC and in Washington DC, Some companies will not show up for less than $99.00.

“Urgent”, “Emergency Service” and “night/weekend” servic charge for showing up to provide an initial assessment can cost between $75-$149. We suggest that you ask before the tech is dispatched.

“No Service Charge With Repair”
When the rate is $59-$75: If a repair is performed many companies apply the initial payment “towards the labor”, or they say that they waive the Diagnostic/Service Charge:”No Service Charge With Repair”

Typically, if the fee is waived the repair rates start at about $89 or $99 on a repair ( and this includes the trip fee) plus parts. Many appliances could be repaired with labor ranging from $99 to $199 plus “parts”.

Our experience has shown, that companies that charge a very low service fee, or provide a ‘free’ diagnostic rate may fall into one of the following categories:

  • Inexperienced tech
  • A technician who is employed full time at a service company, lives in the area and moonlights after work. This is a kind of tech that I like.
  • A lone technician or a small, unknown company, that are working for cash. It is important to determine if these have a solid infrastructure and or reputation. We have heard and seen several such cases with people who found technicians at online bulletin boards such as CL. There is a risk, and sometimes with greater risk comes greater savings too. But you could find highly qualified and established technicians at reasonable pricing too.
  • Where there is a high probability of a ‘positive outcome’ (defined as a likely repair, or high profit margin). In this scenario we are often prepared to charge a very low service fee!
  • A knowledgeable technician is often able to tell you the expected repair cost depending on the symptoms!
  • An established company during a slow season, or off season, or on a slow day.

We believe that many companies may mark up the parts several considerably which might give an impression of “cheap labor”. I find that some companies find it easier to charge for “parts” than confidently charge the normal labor rate. Keep in mind that for many repairs (and estimates) the technician has to spend time traveling to and from the customers home, and there are insurance fees, fuel, and vehicle expenses too.

If you ask a company to provide you with an “estimate” over the phone, we often are told that most companies typically say that they “can not” diagnose over the phone. This is especially true when you are talking to a receptionist. I suggest that you ask to speak to the technician over the phone.

In our experience, it is often possible to provide an educated diagnosis and expected price range “estimate” over the phone for most given malfunctions (and yet it is hard to find a someone that will give an estimate. There are several reasons for this as we mentioned above.)

Typical repair net earning after parts:
Editorial note: It appears that many companies use an informal “sliding scale” system where they try to earn between $99-$275 per repair. With some customers, and certain types of repairs technicians may find themselves losing money and time by spending more time than initially estimated, especially if a second problem surfaces, or if they get caught in rush hour traffic. Often due to the low cost of a replacement appliance product ($200-$300 for used appliances, and $300-$500 for low end products) the technician has no choice but to keep the price within the range that the customer was initially willing/able to pay.

Perhaps the price is limited especially due to the fact that the cost of new appliances have droped and customers are often reluctant to pay more than $350 for a repair (unless the replacement will cost near $1000 US Dollars. Since the cost of replacement appliances often cost $500-$800  repair rates are being kept low, even when the repair is extensive and parts need to be ordered and a second visit is required.

This creates a disparity between what an appliance technician can earn in contrast to what an equally skilled HVACR (heating ventilation and Air Conditioning/Refrigeration) technician and auto mechanic peer charges with out much misgivings.

I think that the economics of ‘supply and demand’, the cost of a new replacement for the malfunctioning appliance or product and the “declining cost” of  new appliances and the lack of motivation of customers to pay high labor rates (versus the reluctance of a customer to go out and make a new purchase) are the (invisible) factors that impact the rates that consumers will be charged.

Often there are no standardized rates (and the cheap replacement cost is competing and squeezing the livelihood earnings of the skilled tradesman).

 

Supply and demand and the willingness of the consumer to pay” The first heat spell of the summer is known to stress many refrigerators, freezers and air conditioners causing many products on the brink to break-down. At this point there is a swelling of consumer demands for service. Here with high demand companies can recoup some of their losses with charging for emergency service when the ‘supply’ of available service providers is low.

I feel that technicians should be upfront and transparent about the labor that they need to charge and avoid “selling” parts. But customers often do not like paying for labor, especially when some competitors conceal and lower the ‘labor’ rate through marking up parts several hundred percent (%).

It is sometimes challenging to give a quote by phone due to the practice of many competitors to not disclose the expected profit, or likely repair rate. This could make them sound less expensive.

It seems to work to the advantage of the service company when they do not provide a price quote over the phone. Since we find that most customers do proceed with a repair once they made a commitment to pay the technician for the service call ( therefore, providing pricing, from a pure marketing point of view seems counter productive (in light of the norms in the industry).

When calling for service, please keep in mind that repair circumstances vary and several factors could determine the final quote price. It is always a wise to ask the technician to communicate clearly what his pricing structure is.  Also, emergency service rates and variables such as travel time and distance, brand and type of appliance could all have an impact on repair and service call rates. Some companies in the field will charge more for high-end products, for refrigeration, imports, front loading washers and stackable washer/dryer units.

For people on a budget, or for those whom are comparison shopping for the best price, they might find it useful to ask the repair company or tech for a quote, or a price range for a repair (in the “best case scenario” the “worst case” plus what in his assessment is “most likely cost”. I encourage you to get this quote over the phone. The technician will need to know the make, model, approximate age of the appliance and a good description of the symptoms and malfunction.

The pricing information provided here intended to provide a snapshot of common rates for   consumers by service and repair companies. If you would like to know exactly what we will charge you on our next service call please call us first.

This page is intended to provide a general overview about Appliance and HVAC service industry pricing trends and consumer behavior with regard to shopping for service. the pricing information provided here does not necessarily represent the rates that you will be charged when calling.

We hope that you the consumer can find this information useful when considering servicing an appliance or HVAC system. (See more below)

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PLEASE NOTE: The information provided here is an opinion based on impression alone! The writer of this article did not use a scientific method of data analysis. He approached this as an anthropologist or sociologist using observation alone [with a focus on economic trends, consumer behavior and general patterns observed].
Why is it hard to find a fixed “repair” “price list” on repairs
Our experience is that many companies only offer a fixed price for the initial visit or estimate. When I called GE and Sears for a specific quote for a given repair, I was not able to get a price. It appears that what one normally finds is a repair “price range” and not a fixed rate.

When I attempted to collect data from major players in the Major appliance repair industry, no company that I contacted was willing to provide a concrete pricing quote beyond the service call/trip charge. A former Sears employee told me that Sears used to charge a $240 flat rate for repairing a refrigerator plus parts. He also told me that technicians were encouraged to sell accessories.

I think that many companies avoid giving pricing over the phone perhaps because they are afraid of starting a bidding war where the rates will diminish or the customer will go to the lowest bidder.
In fact, when I initially tried to establish a price structure for our company, I called GE and Sears and I was very frustrated that the actual repair pricing appeared to be shrouded with secrecy.  I was not able to get a quote, not even if I specified a specific type of repair. The pricing mentioned in the ezine article are lower than I have seen in my area.

I have seen an ezine article that claims that appliance repair rates are by the hour.  I have (almost) never seen a company charge for appliance repairs strictly by the hour and I have never seen an established company charge $10 to $20  us Dollars per increment of time as the author of the article states. I think that perhaps he is giving rates for small appliances (as I will elaborate soon).

The ezine author writes:
“…every subsequent time block the rates would be lesser. $10 – $20 could well be the average range for the later time slabs. Lesser rates are charged if the appliance is taken to the service shop…”
If he is talking about “taking” the appliance to the “service shop” he is clearly not talking about a refrigerator or a washing machine, dryer, Stove,  which I have never seen them transported for the sake of a repair. Perhaps the pricing listed is for small appliances.

Another comment: The ezine article states the following:
“Appliances generally last for years, especially when maintained properly. Proper maintenance actually reduces the incidents of faulty functioning considerably. ”
While the above statement is generally true, there many instances where the customer is not at fault! In my experience (except for not cleaning condensers) the customer is NOT at fault. Customers often want to know what they could have done differently, but usually the case is that they did nothing wrong. In the repair industry it is an accepted fact that the equipment built now, will probably not last as long as the machine that was built by the same company 20 years ago!
Also, in the trade we know of parts that have a high probability of failure: There are GE (refrigerator control boards) products and Whirlpool washers (- couplers, that appear to have a high failure rates) and I don’t think that I can say that the customer did not treat the machine correctly. When you are in the field, it is often predictable what went wrong due to probability (with service experience).
Why is it hard to find a fixed “repair” “price list” on repairs?
Our experience is that many companies only offer a fixed price for the initial visit or estimate. When I called GE and Sears for a specific quote for a given repair, I was not able to get a price. It appears that what one normally finds is a repair “price range” and not a fixed rate.

When I attempted to collect data from major players in the Major appliance repair industry, no company that I contacted was willing to provide a concrete pricing quote beyond the service call/trip charge. A former Sears employee told me that Sears used to charge a $240 flat rate for repairing a refrigerator plus parts. He also told me that technicians were encouraged to sell accessories.

I think that many companies avoid giving pricing over the phone perhaps because they are afraid of starting a bidding war where the rates will diminish or the customer will go to the lowest bidder.
In fact, when I initially tried to establish a price structure for our company, I called GE and Sears and I was very frustrated that the actual repair pricing appeared to be shrouded with secrecy.  I was not able to get a quote, not even if I specified a specific type of repair. The pricing mentioned in the ezine article are lower than I have seen in my area.

It is possible to find contractors who offer DISCOUNTS  and “Flat rate” Repair Rates.
Some may be willing to provide estimates over the phone for non-urgent calls, or on a when in area basis, when this is arranged ahead of time with the office.

You can call our hotline seeking out independent contractors (especially) and you could ask to be connected (up-to) 3 contractors in your area. To save money you have every right to compare rates.I have found that when a service-tech, or company are is not in the midst of a heat wave (or a cold winter) or if the customer is not calling in an emergency where they want to be serviced “yesterday”  local contractors could show more flexible with pricing. It could depend also on how busy they happen to be when you call.

If you call several companies you could save in the end. Caution: Always check for customer reviews on line (and many of our contractors do have customer reviews posted!)
I have found that some companies value even those customers who try to find a ‘deal’. Of course most will have a certain “bottom-line” price that they will not go under. You might be surprised, but some companies could even provide “flat rate” pricing for specific jobs such as “replacing a compressor” or “thermostat” installation, changing a belt, charging refrigerant also known as “freon”. Some may give a price per pound (for hvac units).

Some additional places to look for savings would include calling companies listed [lower down] in the yellow pages in plain text ads: I have found that sometimes companies that do not have a big advertising overhead expense for an annual contract with superpages or Yellowpages could offer greater discounts. The logic for this is two fold: A) I have found some of those who pay a huge sum of dollars for top tier Yellowpage visibility where often looking for a certain affluent, or a hurried strata of customers that want service immediately.  I Paradoxically, I have found that also the reverse could be true: Especially with pay per click advertising online (rather than an annual contract with a yellow-page/book listing).

I have found in my experience that – when a company pays for Google adwords ads  (for example) with payments that are based on “pay-per-click” model – rather than on an “annual contract.” I have found that this “strata” of service advertisers are very eager to get new business. With these ads, as businesses pay per click there might be operating under a different set of motivations such as the psychology of ‘sunk-cost effect’ found in economic/psychological theory. These advertisers could turn the advertising off at any time, but when they run it with intention consciously, my assumption is that they want business and are likelier perhaps to accommodate. Pay per click ads for service at the first page of Google can run between $5-$10 each time (a new) person clicks on the ad.

I find that independent local companies, and independent contractor can show more flexibility than a company with a more rigid pricing list, as one might expect to find with large brand names.

Additional places to look for discounts is by word of mouth in your community: Sometimes you can find highly skilled techs who moonlight after work at night or an the weekend: They often charge less than their employers. It is always good to get references. online, or even look for service ads on craigslist in your own city. I have seen people find such skilled techs by chance, as they were servicing a 7 11 store or a supermarket, or at an HVAC, or related trade supply store (where tradesmen) often have to stop at for supplies.
A note of caution: People who work full time might not have the resources to deal with problems that might come up later, or might not have insurance (if this is a concern for you). Often, they are likely to be licensed since this is required by law (in most places) and experiences: Since this is what they do year round.

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We also found a site that sells ($) the “Original Blue Book” “Major Appliance Job Rate Guide”  (This site seem to also offer an online version (for a fee).

HVAC and commercial refrigeration service charge rates are typically higher: These  start at $89.00 up to $150.00

There are many in the industry who advertise: “No Service Charge With Repair” and in such cases labor rates are usually start at $99.00 and up.  The writers of this article feels that there is no measurable economic advantage for this trend of “no service charge with repair” since what ultimately matters is the bottom line total price of the repair! What is most important for a savvy customer to research in advance of the service visit what is the estimated price range for the specific repair for the product malfunction. Despite arguments to the contrary, in my view many repairs could be estimated based on vital information such as make, model, and symptom. If you provide these to a knowledgeable service professional, or research on line you can often get an idea of the likely repair procedure and associated cost.

—–The segment below needs to be edited:
All companies that we know (in the Appliance repair field) charge a “flat rate” for repairs and not an hourly rate. Generally, a ball park price range for many  completed repairs for most major appliances _including parts_ usually ranges between $149-$350. If a motor or electronic control board is needed and it cost $200 often the income of the technician is constrained due to the prohibitive cost of the parts.

I think that psychologically customers are more prepared to pay a high rate for parts (and therefore the retail price of parts may be high). I think that service companies need to charge on most repairs$149.00-$350 on most repairs to stay in business.

The “minimum Flat rate” that most companies would charge for residential labor (including the “Trip Charge” AKA “Service charge”) $89 or $99. I find that many companies try to compensate and supplement their seemingly low repair rates with selling parts, though they may not tell you this).
NOTE: Home insurance and warranty providers (such as whirlpool) often pay around 65-99 flat rate. Here too, I have found that when they pay such a pittance, I heard that some competitors augment their income with “parts” (we do not do warranty work and one main reason is that if you want to charge up front the proper rates this is met with resistance. The system as it is seems to induce “creative” billing practices.

It appears that customers are more comfortable paying for parts than for labor, and this in my opinion influences this general trend where some depend on selling parts.

I Personally prefer to be upfront and charge for labor and avoid replacing parts, but I think that we whom try to charge what everyone else charges, but calling it “labor” rather than “parts” meets resistance. My former employer frowned on my resistance for selling(parts) ‘preventative maintenance’  as he called it. Yet at the same time he was delighted that I felt comfortable billing for labor (and he was surprised that the customers were willing to pay).

It often seems obvious to me that the technician is a sales person: Some technicians feel very guilty for charging on labor and others are more comfortable (and some even feel entitled to charge a large sum)(after the cost of parts and before labor and expenses) in order to cover their operating expenses and stay in business. If a company does not charge enough, it appears to me that they will not have sufficient resources to support a durable and reliable business infrastructure where they could to stand behind their product/service and maintain their staff through the normal fluctuations of the slow and busy repair seasons (I think that a company that does not charge with in this range may not endure) In my view when customers pay less than the “going rate” they are taking a (calculated) risk by increasing financial savings but risking reliability and quality (and there are exceptions to this with out a doubt).

 

Industry Warranty norms:

90 days on parts

I think there is a “sliding scale”

Retail pricing is often doubled of parts

I don’t go for diagnostic fee (consider it a loss)

It is my opinion that what is most important is the total cost of the repair since there are varying practices with regards to parts markup. If you are seeking an exact price for a given part, I suggest you have a model number (and occasionally a serial number). You could search pricing on a number of sites

 

Warranty practices:

30 days for labor (if job has to be redone due to a part failure within warranty)

Parts 90 days (with some exceptions)

Except compressors that may have 1 to 5 year warranty Copland

Total price including Parts, labor Diagnostic and travel time

FURNACE & HVAC REPAIR PRICE LIST

Igniter 199-299

Pilot igniter assembly $300-350

Capacitor replacement (outdoor heat pump) $199-$350

Capacitor replacement (indoor blower) $300-$450

indoor blower motor replacement

Heat pump/hvac Fan motor replacement $350-$550

24 volt Transformer

Valve: 24 volt $470.00-$570.00

Control Board $590

Thermo-couple $180-$280

Flame sensor


Regional Variations in Pricing:

We did not do a thorough analysis of pricing trends, but the unsubstantiated impression in our mind is that prices seem to be higher in the DC Metro area compared to the Baltimore Metro by 25 to 40 percent. It appears (to me as an observer) that the invisible hand of “supply and demand”, the urgency of the repair, the presence of a “high end” appliance and the willingness of the customer to pay (for quality prompt service) are contributing factors.

Customers, in my opinion should explicitly ask the technician to provide an estimate prior to performing the repair. Customers can then be more likely to be in a more favorable negotiating position.

In most cases, I have found that the majority of customers do proceed with the repair once the tech has shown up for the appointment (this is also because technicians price the repair within acceptable range).

It seems to me that the real shopping/price comparison process takes place prior to the service call, at the time that the customer looks at directories on the web and when calling the service companies by phone.

Most customers ask what the initial service charge rate is. I don’t think that the service fee rate is a reliable predictor of ultimate cost of the repair. A company that charges more, could be more established and more upfront about rates. I have seen one instance where a repair company lured me with an outrageously low service fee. I innocently assumed that they will be very inexpensive. But it turned out that this company charged significantly more than most in the trade. I believe that he baited me with what has been referred to as the ‘foot in the door’ approach. I think that most would agree that the service call price is ‘too good to be true’ than it probably is and the “shopper be ware”.

I  think that typically it is hard for consumers to discern by phone how much the ultimate repair price will be, and as mentioned in the previous paragraph, I don’t think that you can judge by the service fee rate.

Once the technician is at the home of the customer, occasionally there could be some negotiations (bargaining) but usually not. I think that most experienced technicians price the repair within acceptable range. As far a bargaining habits, US natives are typically less likely to negotiate a price down, while others somewhat more likely. Also, the socio-economic means and the strata of the customer may play a role as well.

I would estimate that most service calls, perhaps 92-94% turn into a repair. If the customer decided to pay for a technicians service visit, they seem to be prepared to do a repair as long as it is not over $400 for an ordinary major appliance (excluding a side by side refrigerator that probably cost $1,000.00 and upwards). If the repair price approaches that of a new appliance, then most consumers will not proceed with a repair. This would happen when the parts are very costly (as in a bad compressor or an old unit with a serious problem).

Occasionally, when the repair is too costly we have seen a very small number of consumers whom refused to pay the service/diagnostic fee, but this is rare. The probability of non payment is increased when the technician is at the home of a tenant and the “paying” landlord is not present.

In general: Defaults, NSF, cancelled checks and fraudulent/false credit card information of  in our experience) are probably less than 1% in my experience. The default probability is greater (than home owners) when the customer is a property owner who is not present, in person, for the service appointment (where the tenant meets the technician). This is probably because the faceless (anonymous) landlord may not feel as much shame for his default since he does not face his victim face to face.

In the industry some technicians find that people from specific countries of origin are sometimes very price conscious. I think that most technicians prefer the customer that is not overly thrifty. Some think that those who seek bargains are more likely to be difficult to please (of  course this is not true in many cases) and many bargain seekers are a pleasure to deal with.

“Hourly Rate” I am not aware of any appliance repair company that charges by the hour using a clock! Most charge a “flat rate” by the job by estimating the amount of time the repair procedure is typically expected to take. If complications arise, these are included later. In my experience, most customers understand that there is a need to charge more when the repair time exceeds expectations and or when more things are found to be wrong with the product.

“Mark up” for parts: It is a common practice in the industry to purchase parts at wholesale rates and mark the price up for retail. some companies opt to include the same profit margin by including it in the “flat rate” quote for the repair.

As stated above this informational page is being created to provide a general overview of pricing trends by appliance and HVAC service companies and consumer behavior (from the view point of an observer of the trade). The pricing provided here does not necessarily represent what 24/7 Express charges. For price conscious customers we suggest that you inquire and ask for a quote. It is well known that educated consumers save.

“Free Estimate”  In the field of appliance repair, as a General rule, most companies do not provide free estimates. On occasion, when we have a technician in the area and the customer impresses us a serious prospect, we may waive this fee, but this is rare.

Outside of appliance repair that is often a flat rate cost, we have found that for commercial refrigeration and large HVAC jobs, some companies do charge an hourly rate of about $99.00 an hour plus the service fee

HVAC Repair rates, including the service are often higher then appliance repair. Common repair rates for HVAC repairs seem to range from $225-$599. This includes condenser motor and evaporator blower motor replacements. Charging refrigerant, replacing capacitor, relay, electronic boards, controls and thermostats.

“Compressor Replacement” pricing: Labor rates for home refrigerators ranges from $350-$550. For high-end products and commercial refrigeration the labor rate is often $550-$850. For HVAC systems I have found compressor replacement rates vary. The usual range is from $550-$1500.

Default by Customers: We find that there are a small percentage of customers (10%) who when call for service are surprised that there is a service charge (if no repair is performed). They often say “you charge …just to show up?!”. For us in the repair field, we find it interesting that some do not appreciate or realize the significant amount of time and travel that it takes to arrive and leave from a prospective customers home, which could often be at least 30-45 minutes plus the time to and from the service vehicle for a diagnosis.

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The next section deals with a new topic

——————————————————————

The following section is not about pricing but rather about:

COMMON MISCONCEPTIONS “I think my refrigerator needs freon” Fact: Most refrigerator problems are not freon problems

“I had some other company fix my refrigerator (or AC) 3 months ago with freon, but now it broke again” Fact: When a refrigerant is added to your appliance or HVAC unit, this is often a temporary remedy. Unless the technician explicitly told you that they found the leak and repaired it, the refrigerant will probably leak again. Finding leaks is often difficult, time consuming, and costly. Many technicians and companies do not advise customers to find a small leak and many customers do not want to pay for a leak test. Leak tests can cost $300-$500 and the performance of a (nitrogen pressurized) leak test does not guaranty that the leak would be found in an HVAC or refrigeration system.

 

If you would like to get 3 separate and individualized quotes/estimates please call our hotline. If you request, you can request 3 separate quotes from businesses that service your local area!

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