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For those who use a fuel surcharge...

Discussion in 'Lawn Mowing' started by procut, Jan 27, 2006.

  1. procut

    procut LawnSite Bronze Member
    Posts: 1,853

    I'm seriously considering adding one next season. So, for those of you with fuel surcharges, how do you do it? Flat fee added to each invoice? Applyed only when price per gallon exceeds X amount? Percent of the invoice total? Tell me how do you handle it??
  2. Royalslover

    Royalslover LawnSite Senior Member
    Posts: 382

    I know this isn't what you want to here, but I hate being nickeled and dimed to death. IMHO that is what a gas surcharge is. I know that if I have some one work for me I want to know how much it is going to cost. Period. I am raising some of my prices this year because of fuel costs, but I'm just raising the price and not adding a "surcharge". Now everyone go ahead and assail me for being a horrible business man.
  3. LawnScapers of Dayton

    LawnScapers of Dayton LawnSite Silver Member
    Male, from Dayton, OH
    Posts: 2,574

    I add 5% when fuel is over $2.29. That is assessed on a week by week basis. This year I think it is going to look more like a 5% discount when/if fuel falls below that. I have had no complaints....
  4. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    WOW! I wish fuel around here was 2.29. It's been the lowest in awhile at 2.37per gallon. I just raised prices last year and in the letter (I wrote all my customer's a letter before I did it) I just stated the facts- it read something like Due to the inflated costs for supplies, fuel and other business related expenses we can no longer service your property for xyz. Our increase does not only cover the fuel used at your property but the fuel and other expenses used to maintain your property on a weekly basis. I didn't hear one complaint, in fact a lot of customers agreed with me and said "I was expecting this awhile ago"
  5. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    We add 2.00 surcharge per week as long as fuel is over 1.75 we have had it in place for 2 years.
  6. mowerman90

    mowerman90 LawnSite Bronze Member
    Posts: 1,491

    This is what I added to my yearly contract:


    Because of the constantly fluctuating and ever escalating price of gas, there will be a fuel surcharge
    added to your statement each month. This charge will be at the discretion of Kreiling’s Lawn & Landscape Service. The amount of the charge may go up or down depending on the cost of fuel but will never exceed 10% of the monthly service charge. Currently, the fuel surcharge is $_________
    per month.
  7. Bull

    Bull LawnSite Senior Member
    from NC
    Posts: 308

    I have imposed a 5% surcharge for the last two years. If the price per gallon was at or over $1.89 at the time of billing for the previous months work then the charge was added. Trust me for the last two years it has not fallen below this amount to avoid the surcharge. I only apply the 5% to the actual mowing fee. I do not add it to other work done on the property such as trimming, mulching and so forth. So a $40.00 dollar yard now becomes $42.00and not a sole has complained nor have I lost anyone due to this. In all honesty I can make a little money from a 5% charge compared to the actual cost inflation of the fuel. Now with that said this year I will be sending a letter to all of my customers letting them know that I appreciate their support over the last two years and even though fuel cost are still high I will not be charging the surcharge this year. This gives them the feeling that I am willing to bear some of the burden as well. Then effective for the 2007 season I will eliminate the surcharge on these customers and initiate a increase in the cost per cut. Chances are I will be able to say something like due to the continued cost of fuel and other materials and in efforts to eliminate fuel surcharges the cost per cut on your yard will now be $42.00. Remember all of what I have just mentioned only applies to older established customers (pre-gas hike), those (post-gas hike) customers have already had the increased cost of fuel and other things figured in to their initial quote so they have never seen a surcharge as of yet.
  8. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    IMO, just dont raise the price for fuel you use at their property. A buck or so isn't even worth raising the price. Remember it costs you more to get from job to job also. Incorperate this into the equation also. I'm not saying rasie each lawn 5 bucks cause you will definetly hear it then but I think 2-3 bucks is acceptable. I would rather raise it one time in a couple of years then to raise it every few months by .50 cents. To me that would leave a lasting impression in the customer's mind that you were always raising your prices. Ever since last year when fuel prices were on the increase, every new customer estimate included room so I didn't have to raise any new customer's prices.
  9. GrassBustersLawn

    GrassBustersLawn LawnSite Senior Member
    Posts: 983

    Last year when gas price jumped, I sent my clients a note with their bill informing that there was going to be a $2 PER VISIT SURCHARGE. I didn't want to say "per week" as some clients we might be at their location more than once a week for various reasons. I also advised a FLOOR price that gas would have to get down to prior to REMOVING the surcharge. For me it was $1.69. So far that hasn't been a problem (worrying about removing it).

    I'm leaving the $2 surcharge this year and using $2.29 as my base gas rate.

    I had ZERO COMPLAINTS about the surcharge.

  10. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    this is what I am doing

    Precision Lawncare reserves the right to add a fuel surcharge based on the price of Regular (87 Octane) gas prices. During any month where gas prices exceed $2.49 per gallon the surcharge will be activated. Surcharge will apply as follows:

    $2.50 - 2.60 1%
    $2.61 - 2.70 1.5% Prices exceeding $3.01 will follow the same
    $2.71 - 2.80 2.0% .5% increase per $.10 of gas price.
    $2.81 - 2.90 2.5%
    $2.91 - 3.00 3.0%
    Surcharge is a percentage of the normal monthly maintenance bill.

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