What Does a Service Contract for Office Equipment Cover?

Technology

What is a service contract?

If you aren’t familiar with the office equipment industry, you might have been a little surprised when you were told that even after purchasing your device, you should still pay a monthly fee to the dealership.

This post is addressing that “fee.”  We are going to explain what a multifunction printer (MFP), or copier, service contract is and what you can typically expect it to cover.

What is a Service Contract?

In the broadest sense, a service contract is essentially just an agreement that in exchange for a monthly fee, the service provider (usually the dealer you bought your equipment from) will provide any service or repair your device requires.  

It’s a similar concept to buying a maintenance package on your car; you pay a predetermined amount of money, and they take care of any repairs, preventative maintenance, or other servicing your device requires.  

If one morning your car (copier) doesn’t start, you give them a call, and they fix it or replace it.  If your car (copier) is due for an oil change (preventative maintenance or is low on toner), you give them a call, and they show up and do whatever needs to be done.  

You are still responsible for putting gas (paper) in it, but the dealership looks after everything else. Mostly, you are buying the peace of mind that there will be no surprise repair bills or downtime if your device malfunctions.  

What is Included in a Service Contract?

A service contract will typically cover anything that is directly related to the device itself but not the network in which it operates.  The minimum industry standard benefits covered by a service contract are breakdown/quality issues and subsequent parts and labour, as well as priority service over clients without a service contract.  

Most service contracts these days will also include all your toner and preventative maintenance parts and labour.

Another very valuable benefit that is provided by some dealers is the complimentary use of a loaner unit if your device cannot be immediately repaired; however, this isn’t an industry standard, and you should always check with the dealership if they offer this service before signing a service contract.  

A few important notes to keep in mind are what is not covered by a service contract.  Specifically, anything that might cause a device to function poorly (or not at all) but is not a fault of the device itself.  

Continuing with our car metaphor again, even the best bumper to bumper warranty won’t extend beyond the car itself… and neither will a service contract.  

Just like your car warranty doesn’t cover if you accidentally drive your car into a light post, a service contract is unlikely to foot the bill to repair your device if the malfunction is directly caused by something someone at your organization did to the device (or the network it uses).  

From our own experience, we find that changes to the network or firewall are one of the most common causes of connectivity issues with a copier/printer that is not covered by a service contract.

What Alternatives Are There to Service Contracts?

If you choose not to get a service contract on your device, it means you will be operating on what the industry calls a “Time and Material” (T&M) basis.  

This merely means that if your device is due for preventative maintenance, is low on toner, or has a breakdown/quality issue, you give your dealer a call, and they charge you for any parts or labour required to get it back up and running.  

Typically, this is billed by the hour at rates of as much as $150 per hour during regular business hours (even more after hours, on holidays, etc.) and includes any time the technician spends travelling to your location as well as working on the device.

In most cases, there are only the two options; either you are on a service contract, or you are considered to be on a T&M basis.

When a Service Contract is the Right Call

Should you buy a service contract when getting a new copier or printer?  It’s arguably one of the most important questions to consider when purchasing a new device for your office.  Unfortunately, both the benefits and drawbacks aren’t always made clear to a prospective buyer.  

Purchasing a service contract provides the peace of mind that your device is going to be regularly maintained and that there won’t be any surprise repair bills.  There are some situations, however, where it may not be the most cost-effective solution for your organization.   

I’ll start by listing some situations where you should have a service contract:

  • You are leasing the device
  • It is your only device
  • Downtime is not an option (sales or other core processes depend on the device)
  • An issue with the device would significantly reduce the productivity of your team
  • You are using close to the recommended monthly impression count for that model copier/printer

Now here are a few situations where you a service contract may not be necessary:

  • The device is only used for convenience printing/copying
  • You have very few monthly impressions
  • You have a backup device in case the device cannot be fixed immediately

Still Not Sure If a Service Contract is a Good Fit?

Many organizations find that they don’t definitively fall into either category of absolutely requiring a service contract or it obviously not being worth the expense.  Unfortunately, there is no single right answer for every business, and only you can decide what will help you best meet your needs.

In this case, your best bet may be to sit down with a representative of your office equipment dealer and have them run a financial scenario for both situations. 

Hopefully, this post shed a little light on what exactly a service contract covers and whether you should have one, but if you still have questions about whether they are right for your unique situation, we are more than happy to answer them directly; send us your question here!    

Cory Porteous
Marketing Manager
Office Interiors

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