Furnace Repairs and Pricing

Furnace Repair

Murphy’s law has an amazing way of finding its way into everyday life. Over the years, I have learned to expect this and not get too worried about these type of events as its just another problem to resolve. I like problem solving so I try to remember that its all good because its an opportunity for another learning experience.  Anyway that is how I try to react. 🙂   Here is the scenario, we have to be in Calgary for the 2011 CIS championship later that day. My wife and oldest daughter are working the swim meet and my daughter has a guest swim practice with the University of Calgary Swim Club. We also need to get up there early to find the Team Aquatics store because she needs a new racing suit and we have had a big problem finding the right style/size. A phone call has confirmed they have her size and we are looking forward to our little three day excursion. I was up the night before until 1:00am finishing up my work so I am good to miss work Friday.  It’s about 10:45am and we are getting ready to leave. Its a cold day at around -25C below and the house feels cold but hey its Alberta in the winter.  I look at the thermostat gauge in the house and it says 14C… That doesn’t seem to cause any alarms to go off for me but I decide to toggle to a more familiar degrees F and it says 57F. I rush down stairs and I hear the telltale sound of a motor that has ceased up. I turn off the switch to the motor and call my trusty repair shop to see what my options may be.

What happens next is shocking in a very good way. I am describing the problem and explaining that we have to leave for Calgary and how  we might best handle the repair. I mention some options to them such as providing the combination to the garage, have a neighbor open the door, etc. During this, she is asking where I am located and some contact information when she says that if I can wait around they can be over here in 10min. Wow!  About 20 minutes later the repairman is here and I show him the furnace and he determines that indeed the combustion blower has seized up.

He says he thinks he has the part and has to go back to his warehouse to get the part and will be back. I ask how long and he thinks about 1-1.5 hours to complete the job. We make a family decision to miss the Team Aquatics Store and wait for the repair. We are thinking that we can still leave if the job is not completely finished but we have a drop dead time of 1:30pm. He returns and replaces the motor with 3 screws and we are done.

Now to the point of the article. My price that I was given was $477 for the part and repair in addition to the $69.95 for the service call. I am old school and I am wondering what the mark up ratio is when I hear the $477.  I am naturally curious about how various industries price parts and labor but I don’t begrudge them their price.  Life has a way of dealing with over greedy businesses and while I have had a few bad experiences, the majority has been very very good.  Nonetheless on my return I google for the part and find it is about $70-$110. A simple motor replacement is about $30-$50. The actual process takes about 5 mins on my particular furnace because there are two screws holding the unit and one screw holding the exhaust pipe that needs to be removed and allow the unit to slip in. The problem is that unless I buy the 3-4 parts that my furnace has in advance, I really can’t do much to lower the cost of these type of repairs. The furnace company has a club… You give them $200/year and it would have lowered the cost to $382 + $49 for the service call. Given that I have had two furnace repairs in 6 years, I am better off taking my chances. The last time it was a thermocouple and I think we paid $200 including service call on a Sunday night. I think this is wonderful service and we were very lucky to find resolution so quickly but I still can’t help wondering what is an acceptable ratio to up charge on parts. I have always thought that 2x list price was getting into the greedy area when you are also charging for service. I don’t charge for mistakes if I don’t have my equipment or other factors which delay the service I am providing which is how I have run my business since 1989.  I might have to rethink this in Canada or at least in this small city in Alberta because everyone seems to expect a lower service rate but will pay a higher parts fee. Something to keep in mind as I navigate the Canadian way.