August 1, 2010

The $25 Baggage Fee and the Glass Energy Surcharge

By Paul Bieber

Quick, tell me what is the worst thing you can do to a loyal customer? If you said create new fees and charges that confuse the customer, breed mistrust and cynicism, and make you feel stupid trying to figure them out, then you are right-on.

Last year, US airlines grossed $7.8 BILLION in extra fees. That is Billion, with a ‘B’. Do you think they are going to give that up when fuel costs go down? Do you believe in the tooth fairy? Now there are fees for sitting in aisle seats, window seats, exit row seats and front row seats. Pretty soon there will be surcharges if the flight lands on time. I understand the security fees and agree with them, but still, this trend is out of hand.

On my home phone bill, taxes and fees added 24.5% to my basic cost. Since when do we pay fees? It is just a price increase. We all pay fees to the government. You pay a fee to register your trucks. Can you add a fee to every bill you send your customers for truck registration?

Shipping and handling are another sore point. Yes, we are all used to paying shipping charges on something we buy. But what is a handling fee but another revenue stream that kicks up the cost of an item. Handling is part of overhead, we all have it. All it does it lets the seller advertise at a lower price and then hit you in the end with a higher price. But in our industry we can’t charge a handling fee.

Just about the only fee a glass shops can get away with is a minimum for a service call. Fabricators and wholesalers pass through the energy surcharge and usually a delivery fee. Glass retailers have a hard time with trying to pass this through, and it just becomes another overhead item.

Our industry isn’t the only one that has an energy surcharge. The steel industry has a whopper of a charge. Even delivery companies, like Fedex, have charged an energy surcharge. But, in our industry, it was never handled well. It has seemed like the entire profit structure of floaters and fabricators was based on the surcharge.

There is no easy way for a glass shop to pass the energy surcharge through. It means making a conditional statement with every quote, and that is a tough way to sell a job to the average customer.

All I know is that I think the $25 baggage charge is a rip-off, and yet, I pay it, knowing that I have no other choice.

What do you do, as a glazing contractor or a glass shop? Are there any good ways for you to handle this? Please drop me a note at to let me know how you handle the energy surcharge in your shop. I’ll pass along all the ideas in a future blog.

Next week some tips to handle the recent price increase started by Pittsburgh.