Let the Buyer (and Leaser) Beware

Six tips to keep your church from getting financially burned by copier costs.

“Buyer beware” doesn’t just apply to used-car sales.

At some point, regardless of size, most churches will find themselves in the market for a copier—and the selection process can be downright complicated and stressful.

Whether to lease or purchase? How to identify hidden costs in the fine print? What to do about pushy salespeople?

“It’s rough,” said Deborah Sutton, director of operations and chief financial officer for Miami’s multicampus Christ Fellowship. “It’s a lot of sales pitches with lots of discounts and lots of [savings] if you do it this way versus that way. And [copier salespeople] tempt you with refunds and things like that.”

Along with that, Sutton said many complicated details are tied into contracts.

Far too often, churches lock themselves into lengthy and expensive contracts without proper investigation and attention to details, explained Lisa Runquist, an attorney and editorial advisor to Church Finance Today.

“Then they find out that it is difficult to get out of the agreement at a future time,” Runquist said. “The bottom line is, you need to read what you are signing beforehand, rather than asking an attorney to read the agreement after you have [signed it and] figured out that it is not a good deal.”

Asked if the copier deals could sometimes be compared to paying sticker price for a new car, Runquist replied: “It’s actually worse. It’s like someone going in and buying a used car on terms that are worse than if they’d gone out and bought a new car.”

The Church of Christ at Pueblo West in Colorado learned that lesson the hard way. The 50-member congregation entered into an irrevocable, five-year lease on an elaborate copier with many more “bells and whistles” than the small church needed, church elder David Gingerich said.

The price tag: $262 per month.

Plus, the church discovered—after the deal was signed—that color copies would cost extra.

“We should have been more cautious,” Gingerich admitted. “We were gullible to technology hype.”

Gingerich’s church is not alone. Many churches struggle to make sense of high-pressure sales pitches and complicated copier agreements.

To help you conduct a successful copier search—without getting financially burned—we talked to a number of financial leaders and other experts. Here are six tips they offered.

1. Determine if leasing or buying offers the best deal.

CPA Vonna Laue sees it frequently: Church leaders quickly scan the monthly fee and decide that they can afford to lease. But if they took more time to look into the fine print, they might determine that—with automatic annual fee hikes—it would be cheaper to buy a copier than lease one, said Laue, an editorial advisor to Church Finance Today.

“We look at what the interest rate is on the lease and what the fair market value of the equipment is,” Laue said of churches she has helped with copier decisions. “And when we do that, there have been multiple times that we have done the calculation and found out the church was paying 14- to 18-percent interest rates.”

Property tax is another potential cost to consider, Laue said, although laws vary by state. But in some states, a company that leases a copier to a church must pay property tax on it—and that cost is passed on to the church. Whereas a church buying rather than leasing a copier might, depending on the state, benefit from a property tax exemption for a religious organization.

2. Find out the actual and final cost.

Milestone Church in Keller, Texas, serving 4,000 worshipers at two locations, negotiated a five-year lease with a new copier company that had a base monthly fee that jumped 19 percent from its lease with the previous copier company. The reason for accepting these terms is the church actually reduced its overall cost by 11 percent. As executive pastor Jeff Pelletier explained, the savings came by a reduced price for black-and-white and color copies.

“So you have to do a total cost comparison analysis,” he said.

Pelletier’s point: Churches need to review the two costs involved—the overall cost of the lease and the per-copy cost. And while the base monthly fee is straightforward—the company states that upfront—the trickier part is determining how much those copies will cost in the long run—which leads to tip 3.

3. Audit the number of black-and-white and color copies.

Prior to the copier search, churches should count the number of both black-and-white and color copies they print, advised Glenn Wood, pastor of church administration for Seacoast Church—a South Carolina-based church network with a dozen locations. While this audit is a good practice in general, it is essential if a leasing agreement would make a church pay for the copies it prints.

Wood said churches need to make sure that the contract guidelines cover a sufficient number of copies to meet a church’s needs. This means that a church shouldn’t sign a contract in which it ends up with excessive fees for copies used or paying for an inordinate number of unused copies.

4. Evaluate what copier capabilities are needed.

“It’s easy for a copier salesman to come in and say, ‘Here’s the latest and greatest; it’ll spin and do everything,'” Wood said. “And that’s wonderful, but sometimes there are features that copiers can do that you don’t necessarily need.”

Seacoast’s main campus, where 6,000 people worship on Sundays, leases a sophisticated copier that Wood dubs the “Starship Enterprise.”

“It’s a really big one,” Wood said. “It’s two-sided, color, staples, folds, cuts, multiple paperweights, large capacity. It’s a behemoth of a machine. And that’s what gets used for a lot of the large production pieces.”

But Seacoast’s smallest campus—a rural site with weekend attendance of 85—doesn’t require that level of printing, so that campus purchased a relatively cheap copier rather than lease an expensive one.

It’s important to engage church stakeholders who actually use the copiers—be it to produce the weekly church bulletin or Sunday school notes or children’s Bible class materials—to assess their real printing needs, Wood added.

In the case of the Church of Christ at Pueblo West, Gingerich said the church plans to buy a laser printer when the five-year lease expires later this year. The printer the church is considering comes recommended by a member who uses the same model in his place of business. The cost is under $600. That’s less than three months of the church’s current lease payments, Gingerich said.

Churches need to review the two costs involved— the overall cost of the lease and the per-copy cost.

5. Have an expert review any agreements or contracts.

Make sure someone with expertise on contract language—be it a church business manager, an attorney, or an accountant—reviews the final paperwork before it’s signed.

“The overriding factor is, it’s not like you’re buying a No. 2 pencil, where they’re the same everywhere,” said Wade Cascini, a Seattle-area businessman and attorney who founded Xippa—a company that helps review and negotiate copier contracts. Cascini maintains that churches are at a disadvantage when negotiating with companies that have been involved in hundreds or thousands of copier transactions.

In the case of Christ Fellowship, Xippa helped lower the church’s overall monthly operating cost by 11 percent, Sutton said.

“You can’t be a professional at everything,” Sutton said. “You need somebody who is really good at [negotiating contracts] to get the finest details taken care of.”

On the other hand, Milestone’s Pelletier and Seacoast’s Wood said they did not see a reason to enlist an attorney or other outside consultant in the negotiations.

“I pay my fair share of legal fees, I assure you,” Pelletier said. “But we felt pretty good about where we were, and I’m not unfamiliar with contracts, so it wasn’t particularly necessary for this engagement.”

6. Always proceed with caution.

Most importantly, churches in the market for a new copier must proceed with caution, Runquist warned.

“I’m sure it’s not true of everyone,” she said, “but I’m convinced that a lot of these organizations that market copy machines to churches are scam artists.”

In other words, let the buyer beware.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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