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Overcharging for service and product?

What is overcharging? I have read several times in forum threads here and in other sites where overcharging is mentioned. I wonder what is overcharging in the sales professionals mind. Tell us what you think is overcharging and why. - by rich34232
What is overcharging? I have read several times in forum threads here and in other sites where overcharging is mentioned. I wonder what is overcharging in the sales professionals mind. Tell us what you think is overcharging and why.
Haven't read anything here about overcharging.

Could you point us to a couple of the posts so that members know specifically whether you mean it in the context of cheating or in the context of determining value? - by Ace Coldiron
I wonder what is overcharging in the sales professionals mind. Tell us what "YOU" think is overcharging and why. - by rich34232
In my mind overcharging is when a provider charges an unreasonable price for goods or services in an effort to profit from an unfair advantage. Not long ago gas prices were at an all time high and at the same time some oil companies posted record profits. Many consumers believed these record profits were in part a result of overcharging. - by Jeff Blackwell
I wonder what is overcharging in the sales professionals mind. Tell us what "YOU" think is overcharging and why.
It's mostly a consumer term. I have rarely heard the term used by sales professionals. As a matter of fact, I did a search and the term "overcharging" has only appeared in only one other post in the history of SalesPractice. It was your post earlier this year.

Curious--are you experiencing that among your competitors or something?

Obviously if one overcharged as an act of volition, it would certainly disqualify that person from being considered a professional. To answer your question, it could be construed as cheating.

I don't buy into the notion that cheating or unfair conduct is common in selling any more than it would be common among other occupations. Perhaps that's why the subject has not been appearing here. Too many good things about this profession that I'm sure a lot of people would rather talk or think about.

Those are my thoughts. - by Ace Coldiron
Jeff thank you for answering
Ace , I am going to repeat what I have written. How many times it is posted in this site is not relevant however there is another thread in the sales forum that another suggested overcharging. But again that is not the important issue of the question. The important part of the question is what do you think is overcharging is.

I am not asking for help I am asking for terminology defining overcharging a client.

Personally my definition of overcharging is not delivering on the sales promises for the price agreed for those promises .Price rarely is the issue. Someone can charge 50 bucks and not fulfill their promises and the client has been overcharged. Another can do that same task for 300 bucks and fulfill their promises and they have delivered for the amount agreed upon. Again the dollar amounts I have posted are not relevant it can be any amount of money. - by rich34232
I think you're confusing the topic of overcharging ("cheating" was my answer, BTW) with the topic of value.

If you're not happy with my "cheating" answer, feel free to substitute the word "gouging."

Intentionally "not delivering on promises" in a monetary transaction is cheating--as I've already stated in the previous post.

Price IS a factor in transactions. If a promise isn't kept price most definitely IS an issue.

If promises KEPT are the acid test for fair pricing, then perceived value takes center stage. However if promises KEPT are charged at an inordinately higher price with no further justification for the higher price, it certainly could be construed as overcharging, and quite possibly cheating in cases where the buyer is unaware of the true value through ignorance. Again--price is certainly an issue, contrary to what you have said.

Also, "amount agreed upon" does NOT wash out the act of cheating, gouging, or taking unfair advantage. All other things being equal in your 50 bucks vs. 300 bucks example, with promises being kept in both transactions--$300 is overcharging. Again--ALL things being equal. If the 50 buck transaction contained promises NOT kept, it would have to be judged on its own merit, i.e. big promise little promise--what?

There are those that might argue with me, of course. There are those that say the right to charge whatever we desire has no moral or ethical boundary ever. But I believe differently, because there is a line that can be crossed which is just plain taking advantage of an unsuspecting buyer.

That said, having stated your question repeatedly, is there a specific point you want to make--or is this just a survey?

If it's the latter, I hope you're content with all replies whether you agree with them or not. - by Ace Coldiron
I do think this is an important topic and I do not think it is negative. We already have a difference and it needs to be discussed.With every forum thread there is a chance to go negative. I am not going to let this go negative. However I will answer the questions. I think it is extremely important for the sales professional especially those working with B2C to understand their pricing is fair and in line and to think more highly of them that they are worth more than what their company charges. Do not be afraid of your company’s pricing.

The answer of cheating is subjective at best .What is cheating? Who defines what cheating is in sales? What you or anyone for that matter defines cheating it may not be crossing the line in another professionals eyes. The other spectrum the line that is drawn at your opinion where cheating begins may be well over another professionals line. This same line is drawn when we speak of ethics. Ethics cannot be defined where it is black or white. There is grey area that is dependent upon each person’s moral beliefs. There are something’s I will not do however the next company may not give it a second thought. It is my integrity that drives my ethics and moral behavior it is how I define them. You define your own. That is why I am asking you to define overcharging in your terms.

Price gouging again what is the line? Is it when someone is two times higher, three times higher or more? When do company costs enter into the equation? Someone working out of their home can do it cheaper than a company that has fifty employees, many buildings and vehicles? What exactly determines gouging? Jeff used the example to stand behind his definition. I appreciated that.

There is no confusion about value and overcharging. I did not read the value thread. I have no idea what you are speaking about or trying to tie together from that thread.
Delivering on promises includes but not limited to; value, what is valuable to the client, and presentation, solution, and workmanship, and the price given up front. This is to be taken in context that it all is tied together.

Taking each item out of the equation and defining each one without the other you do receive your definitions. Individually they do not fulfill the promises, together they do. All things being equal the three hundred dollars used in the example is not overcharging. The person who charged fifty dollars and did not deliver on the promises did overcharge. The example you are making anyone who charges more would be overcharging. We know that is not true. We are not talking about promises being met with the fifty dollars and three hundred dollars. Please keep your answers under the context of the question. Changing the context of the question changes the whole structure of the question. If the question is not understood please ask for more explanation.

If my questions were someone delivers on their promises and charges fifty dollars and the next company charges three hundred dollars and does the exact same thing is that overcharging then of course it is. However that is not the framework of the question.
Let us keep the context of the question and not change the context of the statement. Comparing the fifty dollars to the three hundred it does not matter what I as a company charge that is of consequence. The money that the consumer spent without getting results becomes significant the fifty dollars not the three hundred dollars. That is where my statement of price does not matter concerning what I or anyone else would charge. I think you knew that.

I stand by my original statement if you do not deliver on your promises you have overcharged and it does not matter how much or how little you charge.
- by rich34232
Zig Ziglar... There are times when you may pay more than you expected, but is much better than paying too little.

Aloha... :cool: - by rattus58
The answer of cheating is subjective at best .What is cheating? Who defines what cheating is in sales? What you or anyone for that matter defines cheating it may not be crossing the line in another professionals eyes.
Cheating is cheating. Overcharging as an act of volition is cheating.

Yes--it IS an important topic or I wouldn't bother.

Call it "negative" til the cows come home, but if you're implying that there are flexible boundaries with regard to gouging and cheating, I think you're way off base. You don't loosen integrity like you're loosening a collar.

If a person can't "define what cheating is in sales", I would hope they would find another line of work for the sake of those that can define cheating in sales and who have chosen to rise above it. - by Ace Coldiron
Here are two hypothetical examples of "not delivering on the sales promises for the price agreed for those promises":

(A) You stop at a filling station for fuel and after filling your tank the meter indicates that you pumped and were charged for X gallons times $Y per gallon. As it turns out, unknown to you or the filling station, the pump was miscalibrated resulting in less fuel being delivered than believed.

I do perceive this to be an example of overcharging because the customer received less than he/she paid for.

(B) You pay a courier an agreed upon price to deliver a certified check to the county assessor before a specific deadline to ensure that a property isn't sold at the Sheriff's annual tax sale for delinquent taxes. The courier misses the deadline resulting in the home being sold.

I do not perceive this to be an example of overcharging because the customer did not receive what he/she paid for (timely delivery). - by Jeff Blackwell
Here are two hypothetical examples of "not delivering on the sales promises for the price agreed for those promises":

(A) You stop at a filling station for fuel and after filling your tank the meter indicates that you pumped and were charged for X gallons times $Y per gallon. As it turns out, unknown to you or the filling station, the pump was miscalibrated resulting in less fuel being delivered than believed.

I do perceive this to be an example of overcharging because the customer received less than he/she paid for.

(B) You pay a courier an agreed upon price to deliver a certified check to the county assessor before a specific deadline to ensure that a property isn't sold at the Sheriff's annual tax sale for delinquent taxes. The courier misses the deadline resulting in the home being sold.

I do not perceive this to be an example of overcharging because the customer did not receive what he/she paid for (timely delivery).
In example (A) certainly it is an overcharge and an inanimate object such as a gas pump could not commit an act of volition. But I could imagine someone saying "Hey, this pump cheated me."

In (B), there is no evidence of an act of volition--just failure to deliver or poor service. An accusation of overcharge would seemingly not be a way to express our displeasure. - by Ace Coldiron
In example (A) certainly it is an overcharge and an inanimate object such as a gas pump could not commit an act of volition. But I could imagine someone saying "Hey, this pump cheated me."
I agree. On the other hand, IF the pump was miscalibrated on purpose that would be a deception for profit aka "cheating".

In (B), there is no evidence of an act of volition--just failure to deliver or poor service. An accusation of overcharge would seemingly not be a way to express our displeasure.
I agree. On the other hand, IF the courier purposely missed the deadline so that his/her friend could purchase the home at a reduced rate that would be a deception for profit aka "cheating".

One more example...

While visiting a consignment store you notice in the display case what looks like a WWII pocket compass in it's original box and in like new condition. You speak to the clerk about it and he/she informs you that the compass, along with a few other similar items which are now sold, came in that day and were part of an estate sale. He/she relays a story passed on to her by an heir of the estate of how the owner of the compass, now deceased, received the compass when he was a pilot in WWII and that the initials engraved on the back were his. In your mind the price is fair and you are willing to overlook the initials since that was standard issue at the time.

As the clerk is ringing up the sale he/she drops the compass resulting in the lens and needle detaching and in need of minor re-assembly. Even after being dropped you decide you still want the compass and are willing to pay the asking price because of it's great history and relative condition.

When you get home you are excited about your purchase and immediately go online to research your find. The box the compass came in has what looks like a serial number so you type that number into Google's search box and the search results display a page revealing that the number on the box is NOT a serial number but instead a product ID for a NEW replica WWII compass that comes with free engraving. You thought you were buying an original but instead you purchased a replica.

In your mind you tell yourself that it's still the same compass and you are going to keep it but it's not worth the value paid because it's a replica not to mention that you could have purchased the new replica for less money than what you paid for one that was used, dropped and engraved.

Were you cheated? Were you overcharged? Or did you simply pay more than you now feel it is worth? - by Jeff Blackwell
Were you cheated? Were you overcharged? Or did you simply pay more than you now feel it is worth?
It was second hand misrepresentation--or misinformation. Because you are at the mercy of the clerk's restating what he/she heard from the heir of the estate, it is difficult to decipher intent.

Without more background on what was relayed--and how--it appears that you simply paid more than you now feel it is worth?

Was it overcharging--or overspending? In that case, I think it's a gray area.

I agree with you on the other variants you posted. - by Ace Coldiron
SOMEONE misrepresented the compass. Is misrepresentation cheating? Most of my collegues would think so.

Much Aloha.. :cool: - by rattus58
I had mentioned in a private discussion that "overcharge" is a word with a virtual meaning that could vary according to the environment and circumstances in which it is being discussed. On this forum we discuss selling and members here, I would assume, sell for a living.

If this was a forum that consisted of people that work at check out counters at supermarkets, "overcharging", which often occurs through human error, would not have the connotation of cheating.

Another topic which was discussed was "multicomponent profitability" which has to do with pricing strategy, and often encompasses huge variances of prices for the exact same commodity, but circumstances of distribution vary also. The best examples are probably found in just about every facet of the beverage industry. In that area of buy/sell and economics, "overcharging" would probably not be an appropriate description.

But this is a sales forum dedicated to examining the various facets involved in sales, and the connotation of cheating regarding overcharging is a reliable connotation. - by Ace Coldiron
What's interesting to me as I read these posts is the use of the word "fair."

Who determines whether a price is fair? The seller? The prospect? The competitors of the prospect?

As sellers, aren't we obligated to make the maximum profit possible? If a customer is willing to pay $10,000 for a product, even though most customers pay $8,000 for a product, is that "unfair"? Or is that good salesmanship?

When I was a sales manager for a customized product, our sales reps' commission rates were determined by the "sold price", and whether it was at, above, or below "list price." List price was an internal tool, and not something published or available to the market. Reps who consistently sold above list price made a lot of money. Their skills were such that they could accomplish this. On the other hand, reps who had to discount every project made little money.

My question is: What is "fair pricing" and what isn't "fair pricing?" How does this relate to this thread's topic of "overcharging," if at all?

My bias: When using the term "fair" in the area of setting price for a product, fairness is determined by both the market as a whole and also individual prospects. - by Skip Anderson
As sellers, aren't we obligated to make the maximum profit possible? If a customer is willing to pay $10,000 for a product, even though most customers pay $8,000 for a product, is that "unfair"? Or is that good salesmanship?
Some companies, particularly in the home improvement field, require their salespeople to work "on a par." Basically it means that the so called list price is really not "set"--it merely represents a point of pricing that the company would accept. However the meat of the salesperson's commissions comes from a share (percentage) of what the rep can get out of the customer over and above that list price. I don't think it represents good salesmanship or bad salesmanship. It represents that the salesperson is working under that commission structure.

There are people who frown on that way of doing business as both a questionable practice, and a flawed selling structure. I count myself among those people.

Some people cite auto sales as working something similar to working on a par. However, the profitability strategy is different. The lion's share of profit and sales incentive often comes from the back end, i.e., selling of other products and services and add-ons that make the entire package more profitable.

Jeff used the word "fair" when referring to the misinformed compass buyer thinking he was getting a fair price at first. Both Jeff and myself separately used the word "unfair" in reference to "taking unfair advantage." "Fair market price" is another common usage for the word.

You pose an excellent question: "As sellers, aren't we obligated to make the maximum profit available?"

My own view is that it depends on where that availability lies, and on who our obligations are to. - by Ace Coldiron
Like Ace, I too count myself among the people who frown on that way of doing business as both a questionable practice, and a flawed selling structure. Further... I believe this is the type of sales practice that fuels consumer fear, distrust and the "Us vs. Them" mentality. - by Jeff Blackwell
My bias: When using the term "fair" in the area of setting price for a product, fairness is determined by both the market as a whole and also individual prospects.
I have to agree with you from my limited experience in this business. Everything WE sell has a "fixed" price per company, so we cannot "set" anything. In addition, commissions are such that you generally get paid a 100% of commission up to a target premium, and then something like 4% over and above that.

Howver, I do buy stuff, and it depend on my mood. If I need a saw, it's how much am I willing to pay NOW or will I go shopping. If I recoil at a price, I tend to forget the item altogether, unless I'm in the middle of something and really need it. Then generally any price is a good price. If I get screwed, that will drive the next sale/purchase to someone else regardless.

Aloha... :cool: - by rattus58
Excellent stuff here fellows.

Jeff I liked your example of the delivery package. That example is one that has happened to quite a few people. Here is the problem. The package was promised for delivery the next day. They charge extra for next day delivery. The package never made its destination at the time promised. When they promised next day and it did not arrive isn’t that a lie? They were told it would arrive the next day. Wasn’t the person cheated? Paying extra to have the package delivered the next day and it did not arrive were they not overcharged? They did not deliver on their promise, where is the value?

I promise delivery on Friday and it does not make it Friday who did not deliver on their promise? The truck breaking down is not relevant. It is what I do with the broken promise that makes the difference. The great sales professional follows up and makes sure that promises are met and when they cannot they inform the client ahead of time. They practice the under promise and over deliver strategy.

We all understand mistakes happen. I think for the most part most people would accept that mistakes happen. That does not dismiss the fact that a lie was told, promises were not met and the value was not there. Fulfillment of promises was not met unintentional yet still not met. Who is responsible for those promises to be met? Is it the responsibility of the buyer or the seller? We realize intent to overcharge, cheating is wrong. I see no difference between intentional and no intent when the results are the same.

" If a person can't "define what cheating is in sales", I would hope they would find another line of work for the sake of those that can define cheating in sales and who have chosen to rise above it."

I agree with this statement. Even so there still there is not a definite description of what is cheating. We are leaving that up to each and every individual and their ethics and ethical behavior. I have extremely high ethics where as another may not have the same ideas and ideals that I have. In their mind what is cheating, is different than what it is in my mind. Obvious blatant cheating has no grey area. There are some that skirt the edge is that going over the line?

I like these kinds of situations and questions that are based on opinions. We can see into each person to discover exactly how they feel with no wrong or right answer. This allows us to grow professionally and personally

Thanks to all who have entered into this discussion and have given valuable information that has been really wonderful replies opening minds. Thanks

I have not given much thought to buyer’s remorse as broken promises, cheating, or overcharging, not delivering on the promises made. Value perceived at the time of the sale then changing your mind that it is not enough value. That is an interesting question.


- by rich34232
I see no difference between intentional and no intent when the results are the same.
The power of intention is bigger than just about anything that is ever discussed on this forum. I have a powerful intention to please the customer/client. Ultimately the results are never the same. That is because the ability to communicate that intent can, by itself, help a person excell in sales.

Cheating is shortchanging people on value by intent.

That said, and in all fairness, I realize that the subject of intent can vary in context. In the context that I am using, I view Intention as a powerful force that transcends the circumstances that seem to remain out of our control. - by Ace Coldiron
All really good points. Most of the points made are seen with us being the sales professional and not seen through the consumers eyes including mine.

I have really appreciated the responses and thoughts that are exceptional concerning this subject.

Ace the sales professional should always have the concerns of the clients ahead of the company and themselves making sure they are happy and pleased with our solutions,price, and service. An enjoyable owning experience. This is very important with my process and every sale. - by rich34232
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