Wednesday, March 23, 2011

When Cash Isn't King

Do I get a discount if I pay cash?

I have to admit, this is my least favourite question. I dislike it even more than “Is that your best price?” and “Can you have the job finished before I host my daughter’s wedding in 2 weeks?

I understand why the question is asked. Times are tough and every opportunity you can save some money gives you an opportunity to spread a limited budget further. In British Columbia, we’ve just been introduced to the HST and seen the hard cost of many goods and service increase by up to 7%. Paying cash gets you around the tax issue, but it's like walking tightrope without a net.

First of all, working under the table is illegal.  But if you're considering it at all, this apparently doesn't bother you, so I'll move onto other issues that might.  Without any sort of written agreement between you and your contractor (kitchen or otherwise) you have little if any legal recourse if the project goes sideways. Assuming the court will even hear your case without any form of documentation, they’d have to resort to your word against the contractor’s. I can almost guarantee that won’t work well in your favour.

Even if you have an excellent, trustworthy contractor who just so happens to work “for cash”, you can still run into issues if faced with job-site injuries. Under-the-table deals often mean that liability and work-site injury insurance is not in play. If a newly installed faucet leaks and causes extensive water damage, your insurance company is going to want to know who installed it. The plumber was unlicensed? You may be uninsured. A worker gets injured on the jobsite? If he’s not covered by workers’ compensation, what are the chances he’ll be looking at you for compensation?

The purchaser in the first design firm I worked for had a poster on her wall that I feel summarizes this situation nicely:
My quote includes a quality product, quality installation and quality service.  You want a lower price?  What would you have me remove from my quote?


Corey Klassen AKBD BFA said...

I just had a job go sideways last week because of the "cash" issue. Fool me once...

New position statement: "You came in for a reason, because we're professionals. I can not negotiate the price, but I can adjust the products and style."

So yes. Agreed.

Brenda Lynn said...

I am so with you on this, Arne! I get so tired of everyone wanting a discount! When I go to a doctor or a lawyer I do not ask then for a discount and it makes me very ill when they ask me for one! Those people and contractors who do things under the table really bother me! Don't even get me started about that issue!

I totally copied the statement from your first design firm and have printed it out & hung it in my office.

Brenda Lynn

Leslie Fine said...

Excellent post, you raise good legal and practical points. The bottom line is - you get what you pay for. If you want an excellent job done in a professional manner, you must expect to pay fairly for the services rendered.

Arne Salvesen said...

Thanks for all the comments you guys. As you may have guessed this post was inspired by actual events. Despite how I may sound in the post I'm pretty matter of fact about this issue now. I don't do under-the-table deals (although I do accept cash as payment!) and you're on your own if you choose to do so.

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