Should You Buy or Lease a Printer? 10 Tips to Avoid Surprises

As a new business account manager at Xillium, I’ve been working in the “print industry” for three years now. In my role, I advise companies on the challenges they face every day in document processing. What strikes me time and again is that many customers don’t read the fine print of a contract when they buy a printer. Furthermore, the contractual differences between suppliers are often not taken into account when making the final comparison and decision.

Only 10% read the terms and conditions

Isn't that strange? Let me give you a familiar example. Apple has new terms and conditions and asks you on your iPhone if you want to accept them. Have you ever declined to accept them? No? You're not the only one. Research shows that only 10% of people actually start reading these terms and conditions, but give up after less than 20 seconds. The remaining 90% of people click "Agree" right away.

Fewer than 10% of customers read the terms of a paper contract either. Failing to read and review the fine print can have major consequences for the decision you’re about to make. Contract terms among providers in our industry can vary significantly and therefore have major implications for your decision and the “total cost of ownership” (TCO) of your new contract. In this blog, I’ll share the TEN most important tips regarding contract terms. This way, you can make the right decision with confidence from now on. As a bonus, you can download my checklist, where you can fill in the points from this blog for each provider.

Every contract in the printing industry includes price indexation or price increases. Contracts are long-term, and the costs underlying the services are affected by inflation, exchange rates, and raw material prices. It is not unusual for every supplier to raise prices annually in the fourth quarter. The key question is:

• Does this happen only once a year?
• By what percentage?
• And based on which index or independently verifiable industry standard?

With contracts lasting five years or longer, differences of 25 percent or more can quickly arise. The price increase isn’t mentioned in the quotes, but it can therefore be a deciding factor when comparing all providers. This tip shows that it pays to always request, read, and compare the terms and conditions referenced in the quotes.

In the printer market, it is common practice not to complete five-year contracts in full and to roll over the remaining balance into the new printer contract. Be aware, however, that the remaining costs from the current contract will be included in the new contract, which means there will be additional costs associated with this.

Do you need flexibility?

Despite the higher costs, there may be good reasons to buy out a printer contract. For example:

• A high number of malfunctions and overloading of the current machinery
• Machines that lack certain features that are critical to your business and document processes
• Acquisitions, Growth, or Decline
• Merger or Closure of Various Properties

If you anticipate any of these situations during the term of the agreement, it’s best to discuss in advance how the providers can offer you flexibility. That way, you won’t be surprised later by high costs for modifying or terminating a printer contract. Examples include:

• The ability to adjust the contractually agreed print volume at no cost
• The ability to return, for example, 10% of the machines free of charge
• Adding machines at the same rate during the term of the contract

If you’re planning to buy or lease a printer, be sure to pay attention to the differences in the key performance indicators offered by the various printer suppliers. Often, the contract does not include a Service Level Agreement. This is important for measuring your expectations and tracking progress. My advice when buying a printer is to ask these questions so you can compare like with like:

• Is there a Service Level Agreement?
• What are the average response times in the event of a malfunction?
• How many issues are resolved during the engineer's first visit?
• What is the average uptime of the machines supplied?
• Does the supplier have its own service organization, or is this outsourced? Is there an SLA between the two parties?
• Do I have a single point of contact for my contract (hardware, software, and service)?

To verify the points above, you can ask providers for an internal report on these KPIs (which can be viewed, for example, through a BI tool). If a provider takes service seriously, that report will certainly be available. You can use it to assess the quality of the service and compare it to the underlying Service Level Agreement.

When buying a printer, it’s perfectly fine to opt for an older model or a used machine. For example, it might be a more cost-effective solution. Or, by using a used machine, the supplier in question might be able to offer greater flexibility. It’s good to know whether the contract includes a new machine, though, and whether the quote is based on the delivery of a new machine. My advice is to ask the following questions:

• Will a new machine be delivered?
• When was the machine introduced to the market?
• Until what date will the supplier continue to provide active maintenance, and will parts and supplies—such as drums—be available?

Personally, I really hate services that I pay for but don’t use. Take my cell phone plan, for example. I pay for 450 call minutes every month, but I never use that many. If I were to actually use up those call minutes, it would be more cost-effective to include that amount in my contract. The provider is guaranteed to deliver those call minutes and can then offer a discount.

If you’re planning to buy or lease a business printer, it’s wise not to set the print volume in the contract too high. You should also ask yourself whether the volume is likely to decrease or increase in the future due to certain factors. For example, a rapidly growing company will likely see its print volume increase. However, the trend toward digitization suggests that print volumes are more likely to decrease. Consider, for example, the digitization of invoicing.

Some providers also offer the option to select a zero-volume plan in the contract. If you don’t have a clear picture of how many prints your organization produces on average each month, or if you expect a significant drop in volume during the next contract period, this is an option worth considering. If the actual volume differs significantly from the contractual volume, you run the risk of overpaying or having to pay a substantial additional fee. My advice is to ask the providers if they can help you assess your print volume so that you can make the right decision.

Printer suppliers with their own service organizations face a relatively high risk when customers print large volumes with a high coverage rate (the percentage of toner on a copied or printed page). The page layout determines the coverage. For example:

• Een pagina met alleen tekst (<5% bedekking) heeft een lage dekking
• A page containing solid blocks, charts, and/or photos (>20% coverage) has a high coverage rate.

The supplier’s risk is mitigated by including a coverage clause in the contracts—a so-called “fair use clause.” This means that if your usage exceeds the coverage specified in the contract, you’ll be charged for the additional toner used. These charges can be substantial and lead to unexpected costs. This is yet another reason to be vigilant when reading the fine print. If a coverage clause is included in the contract terms, always ask:

• How is coverage measured independently?
• How are additional toners billed, and under what conditions?
• Who decides when a toner cartridge needs to be replaced, and how can I be sure it's completely empty?

Some suppliers charge a fee for scans they perform. Sometimes the cost of a scan is even equal to the cost of a print. That makes scanning quite expensive. Digitization causes companies’ scanning volumes to grow significantly, sometimes reaching the same level as their printing volumes. Over the course of a five-year contract, this can therefore add up to a significant expense.

The same applies to making a copy or print in A3 format. Sometimes the same cost is charged for an A3 print as for an A4 print. Often, however, an A3 print is billed as two A4 prints. Our own research shows that, on average, 5% of the total print volume consists of A3 prints. The TCO of printing costs then rises to 105%. This is yet another reason why it’s worth reading the fine print of the printer contract and evaluating it during the proposal review process.

There are differences in the meaning of “all-in.” My advice, therefore, is to pay attention to the following points:

• There are suppliers for whom not all consumables are included in the printing price.
• It is also possible that certain repairs or the replacement of parts or consumables will be at the customer's expense.
• Sometimes, refurbished parts and non-original toners, drums, or fusers are used. While this can result in significant cost savings for the supplier, it may negatively impact the reliability of the equipment, the warranty, and the availability of your printer or multifunction device.

Ultimately, it all comes down to the attention you receive from the supplier as a customer. Of course, it’s much nicer if, at the end of the contract term, you actually want to renew the contract. So be sure to ask how often the supplier conducts performance reviews, so that you can work together to monitor how the partnership is going and determine whether any adjustments are needed to keep you satisfied.

If you do decide to cancel the contract, it can be very frustrating if you accidentally fail to give notice in time. Therefore, check the contract to see what the notice period is and what the consequences are if the contract is not canceled in time. The notice period ranges from 3 to 12 months. If you fail to give notice on time, the contract is generally automatically renewed for 12 months. However, there are also cases where the contract is renewed for the same term as the original contract. To prevent this, you can consider the following options:

1. Immediately upon entering into the new agreement, send a notice of termination effective as of the agreement's end date.
2. Set a task in Outlook to terminate the contract in a timely manner before the notice period expires. The risk when you leave is that the task in Outlook could be lost.
3. In a document management system, link an expiration date to a reminder so that the digitized contract automatically appears at the right time.

When you buy a business printer, software (such as a scanning, faxing, or “follow-you” solution) is increasingly included. This software is often purchased with the intention of using it over the long term. Software solutions are also integrated with business processes, which can be critical to the day-to-day operations of employees and applications.

The scanning solution that integrates with ERP software such as Exact or Navision, and the “follow-you” solution that is seamlessly connected to the access control system are common examples. When purchasing such solutions, it’s important that they operate independently of any specific brand, so that after the contract period ends, you have the option to switch to a new printer supplier without having to purchase new software or jeopardize critical business processes. So always ask whether the software you’re purchasing operates independently of any specific brand and can be included in a separate contract. Also ask what the consequences and costs would be if you wanted to integrate this software with a printer or multifunction device from another brand.

No quote or contract scores a perfect ten on all the terms discussed. But if you don’t read them—or don’t see them until after the decision has already been made—you might be shortchanging yourself and could end up negotiating the wrong terms. So when comparing quotes, always pay close attention to the general contract and lease terms of all providers.