This is the fourth post in our series examining the industry’s shift away from uniform rental (“rental”) programs with industrial laundry for arc-rated and flame resistant (AR / FR) clothing. Here, we take a closer look at misconceptions that sometimes lead companies to select rental for AR / FR clothing, and the unforeseen consequences of entering the rental world. Click here for the series intro, tune into our second and third posts, and look out for post five.
Extending a uniform rental program with industrial laundry might seem like the simplest and most cost-effective way for companies to ensure their employees are outfitted with clothing that is compliant with industry standards. It is even easier to continue with these contracts when they are generally 5 years or more, self-renew, and are very difficult to exit.
But what if we told you that, as a result of the contract renewal process, companies are actually losing money, garments, and experiencing service issues within their uniform rental programs?
Below we take a deep dive into the reality of a “convenient” uniform rental program to expose the truth: companies are experiencing service issues including worker complaints, missing garments, under washed garments, billing irregularities, and more.
Uniform lease and rental programs record significant wearer complaints and very limited clothing options to choose from and, as a result, compromised compliance compared to choice programs. When people are compelled to wear one color in one style of one garment made of one type of fabric, all day, 5 days a week, to the most common reaction is dislike of those garments, regardless of initial satisfaction. When this occurs comfort goes down, complaints go up, and compliance/safety is at risk.
Are companies still being charged for garments that have been lost by their industrial launderer? The answer is yes! Garments are “lost” due to a wide variety of causes, most of which are not the fault of the wearer or company, but replacement/lost garment charges are almost always invoiced to the customer. Depending on the cause, the “lost” garment frequently re-appears weeks later, but the charges are rarely noticed, contest or refunded. Garments are “lost” by route drivers, handling errors, huge washing machines, a myriad of sorting errors including delivery to the wrong account or the wrong locker at the right account, and by the wearer not turning a garment in for laundering – causing a replacement charge to accrue even though the garment isn’t really missing. Loss charges mean both the purchase of a new garment, and the associated set up, name tag, and logo fees.
Under Washed Garments
One of the top ten reasons why companies decline to renew a FR clothing lease or rental contract with an industrial launderer in favor of a managed apparel program is due to under washed garments. Under washed garments occur due to employees who do not turn in their clothing for laundering in any given week. This means the company is paying money for a service it is not receiving. There are many reasons employees are not taking advantage of the laundry service, some of which include: becoming frustrated with inadequate cleaning, lost garments, failure to repair garments, replacement with used garments for no reason, delivery of a co-worker’s garments in their locker, etc. Some failure to turn in is due to the absence of the worker on the day “dirties” are picked up. Either way, the net result is the same: being charged for services not rendered. It is almost impossible for the customer to ascertain how many units were actually picked up dirty or delivered clean, much less contest an invoice. Generally, every item issued to the organization is also invoiced at its weekly laundry rate for the duration of the contract, regardless of vacation, sick time, or training.
Uniform rental with industrial laundry companies provide an initial estimate of $520 per employee per year – sounds straightforward right? Well, when all is said and done, after a few years of the contract, companies in rental programs typically pay more than $750 a year, and $1,000 per employee per year is not uncommon, thanks to automatic annual increases, loss/damage, other charges, fees, and administrative costs. Making matters worse, as many as 50% of employees in a rental laundry program choose not to even use the actual laundry service.
Making time to review an invoice for hundreds of employee uniforms is nearly impossible when route drivers of the uniform rental program leave little to no time for review. There is no efficient way for companies to ensure they are paying accurately for the uniforms and services provided by the uniform rental company or industrial launderer.
The route driver with the uniform rental/industrial launderer is generally responsible for delivering the weekly invoice. However, he or she is frequently in a hurry and has multiple responsibilities at multiple sites. Larger accounts can expect the route driver to have large paper invoices – or worse – a handheld computer, with thousands of lines of data. The average printed invoice will have 10-15 wearers on each page. Invoice reconciliation can be extremely difficult and time consuming for larger locations. The on-site signatory for the customer also is generally in a hurry, sees these invoices every week, and comes to view them as the same every time and not worthy of careful review. Route drivers press the customer for a quick signature, and most of the time the customer has neither the time, the knowledge, nor the inclination to contest line items.
It is very common for customers to find out after months or years they are still paying weekly rental fees for people who no longer work for the company or no longer require PPE. Not only did they pay rental fees for the uniforms the whole time, most of the items will be listed as unrecovered and the customer will pay unreturned charges for all those unrecovered items.
Most rental companies will only notify customers of price increases only at the bottom of these invoices, not verbally; habitual signing of a weekly invoice without line by line review can thus bind you to significant price increases above those contractually specified.
Furthermore, most rental companies also charge for lockers, soil bins, hanger racks, soil bags and frames. For example, they might charge $3 a week for an eight-person locker. This locker costs $250 but they charge $3 a week for 10 years or more. The locker is paid for after 18 months and every penny beyond that is pure profit. While this is not unreasonable business practice, it is rarely mentioned in the sales process and certainly not included in cost estimates of $XX/week/person.
So, before you think it’s “convenient” to renew your contract with your uniform rental with industrial laundry provider, consider the points we’ve established here, and make sure you have a solid understanding of your contract. And, let the buyer beware!