Reasonable % for gas surcharge???

Discussion in 'Lawn Mowing' started by Creative Lawn Care, May 16, 2004.

  1. Creative Lawn Care

    Creative Lawn Care LawnSite Senior Member
    from NC
    Posts: 271

    Almost time to do invoices for the month. As gas prices here are near $2.00 a gallon for regular unleaded I have decided I have to add a surcharge to cover this extra expense. Not only does it cost me more to drive to accounts and to mow them, it cost more at the grocery store and everywhere else. I do not have anything covering a gas upcharge in my contracts. (This will change for next year) Do you think I can still charge an extra amount?? What amount is acceptable? I was thinking 2% on the entire monthly price for my contract accounts. Thanks for your replies.
     
  2. impactlandscaping

    impactlandscaping LawnSite Silver Member
    Posts: 2,332

    Send a letter with your next bills explaining the fuel surcharge on the next month's billing statement. I think everyone will accept it, as they see it on a lot of other bills as well..i.e-sanitation bill, UPS, freight cos. , etc..Make it known to them that this is a surcharge for "temporary" fuel escalation, and will be in effect until gas reaches a steady level of $_____per gallon again. We have rasied our prices 3-7% each year for the last three years, and have a surcharge of $ 4.00 per account, per month, with no complaints...
     
  3. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    5% is what I am adding on at the end of the month.
     
  4. DennisF

    DennisF LawnSite Bronze Member
    from Florida
    Posts: 1,381

    I have my fuel consumption numbers figured out pretty good. Right now I use about 2.3 gallons of fuel for each customer each week. That includes fuel in the truck and all the mowing equipment. Based on that I'm currently charging a $2.00 per week fuel surcharge per customer. I quoted mowing prices last winter when fuel was $1.40 per gallon. Gas is currently $2.15 for 89 mid grade. With gas 75 cents per gallon higher the $2.00 surcharge covers the price increase. Only 1 person complained. I invited him to seek competitve bids from other LCO's to see if he could get a better price. Evidently he realized that all of them are raising their rates because of gas prices. He stopped complaining and paid the bill.
     
  5. EastProLawn

    EastProLawn LawnSite Bronze Member
    Posts: 1,110

    I think 2% to 4% is a very fair price.
     
  6. T Edwards

    T Edwards LawnSite Member
    Posts: 230

    Here is an excerpt of a customer letter we mailed out in February:

    ItÂ’s almost time for another growing season to start and we hope we have earned your business again this year. We are all painfully aware of how much more we are paying at the gas pumps recently, and the current rates are exceeding $1.50 per gallon. We have done what we could to hold down expenses but beginning March 1, 2004 we will have to add an additional $2.00 fuel surcharge.

    It's a fact of business....don't be apprehensive about remaining profitable.
     
  7. Doster's L & L

    Doster's L & L LawnSite Senior Member
    Posts: 616

    I needed to increase prices this year too for gas. On top of that, they got an increase for cost of living. So i went up $5 on most of mine. Some i went up $10. There was not a problem that ever arised out of this from my customers. Plus as an incentive i threw in an extra little service to appease them.
     
  8. LawnScapers of Dayton

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

    I add 5% to the service on a weekly basis. If the price of gas goes back below $2.20 for 93 oct. then the extra charge drops off for that week.

    This is written into all my service agreements.

    Derek
     
  9. yaardvark

    yaardvark LawnSite Member
    Posts: 17

    Although I am new to the bus.--I think it is kind of crazy to charge a gas surcharge, I mean do you think that most-if any of our customers are getting paid more to drive to work when gas $ are up? While I agree that its not our fault we have to pay more at the pump-its not our customers fault either. Just my 2 cents.
     
  10. flam41

    flam41 LawnSite Member
    Posts: 125

    I am thinking of 1.00$ per cut. 4$ at most for the month on these folks, I hope no-body freaks out as I need every one I got~
     

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