VIRTUALLY ALL EVENT rental operators have seen a client damage inventory — from china filthy with food to linen spotted with mildew and candle wax. But their responses to the problem vary widely, from imposing fees on every offender — even major clients — to chalking up the damage to the cost of doing business.
According to an informal survey by Special Events Magazine, 60 percent of respondents have a policy of imposing a charge for dirty china, usually a per-piece fee of about 10 cents U.S. In contrast, 40 percent set a charge for damaged linen; the linen damage fees usually run about $5 per piece with a $50 minimum. However, most operators say they don't charge for linen damage unless the linen must be replaced. “We prefer that customers return our linen dirty since we do not want them to attempt to wash them,” says one operator.
RIGID RULES?
It's one thing to establish a policy, it's quite another to enforce it.
A few operators never vary from their stated policy. “We treat everyone the same,” says one operator: “If it's damaged, we charge.” But another notes, “We say we charge” for damage, “but we rarely do.”
“No policy is without its exceptions,” another operator explains. “If a customer has rented 500 place settings and somehow managed to return all but five cups, I would not charge for the replacement of the cups. However, you must be careful with the caterers whom you allow to do this because it is easily abused to the point where they fail to count or start assuming that we will not charge them.”
Who makes the decision to impose a fee? Answers vary widely.
“The sales force brings it to the president's attention, and he makes the decision,” says one big operator. In other rental businesses, it's the general manager or salespeople themselves.
One operator lets his software program impose damage charges automatically — “We just don't worry about it anymore,” he says, and “blaming” the charge on the computer tends to soften up objections from clients.
There's charging, then there's collecting. Again, most operators stay flexible. “Sometimes we come to an agreement about what the charge should be,” says one. “Sometimes we turn it over to collections, knowing that we will probably lose the client. Sometimes we back down and take the hit.”
Another operator has found success collecting from balky clients by offering a second option: “We say we will be glad to waive the damage fees with a rider from the client's insurance company naming our company [as an additional insured],” the owner explains. “More times than not, this is more effort than a client is willing to put forth.”
Yet another operator lets a picture do the talking. “Customers always bark that their staff didn't lose or break anything or return it dirty, but with the use of digital photography and e-mail, we can show them the evidence,” she says. “It's amazing once they see the proof how their attitude changes.”
It's tougher to enforce a strict policy when the competition doesn't. While homeowners seem to pay up and sometimes even apologize for damage, “commercial accounts are a different breed, and competitive precedent is hard to overcome — ‘XYZ Rental doesn't charge me for this …,’” says one multi-state operator. “I'd love to see an ‘editorial comment’ about the obvious thought that if everyone were charging major accounts, everyone would see significant increases in their gross profits.”
BROKEN RECORD
Is broken china enough to break off a business relationship? Rental operators take this tough question on a case-by-case basis.
If clients resist paying for damages, “We try to come to some compromise rather than have unhappy customers in the market,” one operator says, “which could cost a lot more than the replacement costs.”
In contrast, another operator believes that a careless client is a less desirable client. “People who abuse equipment usually don't have any pride in what they do,” she says. “Accidents happen, but the customers that chronically abuse things usually go out of business. Chances are they treat their customers the same way they treat our equipment.”
FAVOR THE WAIVER
Operations that impose or offer damage waivers — about 40 percent of respondents to our survey — find the waivers solve many problems.
“Our {10 percent} damage wavier gives my staff wide latitude in settling damage charges,” says one operator. “If the damage waiver is paid, we can be generous on the damage charges, even waiving them completely for a good client, or sometimes for the clueless client that we will never see again.”
The waivers tend to run between 7 percent and 10 percent; one operation charges homeowners 5 percent and commercial accounts 10 percent.
A prime benefit of the waivers is that they enable clients — particularly caterers — to avoid being hit with additional charges after the event. “We charge a refundable 10 percent of the dish room order as a reserve for shortage and breakage,” says one operator. “I find that as long as our customers can budget in the possible after-event charges, it's not as unpleasant, and getting refunded is a nice reward for being careful.”
While rental operators are evenly split on trends in inventory damage — a third say it's getting worse, a third say it's getting better, and the rest say it's unchanged — many agree that as individual caterers grow professionally, they tend to take better care of what they rent.
One rental operator takes the long view. “If caterers and rental companies work as a team, then the respect of each other and the equipment being rented takes less of a beating. I truly believe that once that is established, the issue of damage is a non-issue for all.”
‘THE CLIENT DID WHAT?’ DAMAGE HORROR STORIES
What, me dirty?
Some customers don't bother to clean the china — at all. One client returned china — with the entrees still plated and plate covers in place — then balked at paying a cleaning charge. “We've picked up china in the heat of summer with maggots all over it, and once with bees,” another rental company says. “With the bees, we had to get a hose to spray it off before we could put it in the truck.” The truck needed another interior cleaning a week later because the smell remained so strong. And watch out for wine connoisseurs — one firm rented out 3,000 Riedel wineglasses, only to get back 400 filled with candle wax.
Who knew that linen was so versatile?
Event rental operators reveal that guests use linen to shine their shoes (while it's on the table) and write up business plans (in indelible ink, of course); caterers use it to clean grills, wrap garbage and mop wet parking lots when the sewer backs up. One client thought the linens were too big for the tables, and so cut them down. But another client — a college — loved the rental company's cool tie-dye linen so much that the students took all of it.
Putting the ‘animal’ in ‘party animal’
The mother of all inventory abuse seems to come at New Year's Eve parties. One rental company found that guests had smashed 500 wineglasses into the dance floor and danced upon it. Another came in to pick up a “huge” New Year's party job — only to find its chafing dishes had been used as urinals.
