Value Billing v Distress Billing

If I am going to compare value billing to what I mean by distress billing, I suppose I should define the first and tell you about the second.

Value billing is charging a client based on the value of the information or service provided rather than invoicing based on time spent. So, if a negotiator gets a client a deal which saves that client a million dollars, it might be seen as reasonable to charge $50,000 because of the huge value of the deal to the client, even if the work of the negotiator only amounted to a couple of days work. After all, the client is happy to pay for something very valuable which she could not have done herself. Happy client, happy negotiator.

I define distress billing as a charge made to a desperate client which takes advantage of the client and leaves him feeling ripped off; indeed knowing he has been. One example might be an emergency call to a plumber in the middle of the night to stop a leak causing further damage. In the daytime, a fair charge in the UK might be £100 for an hour’s work and the stress relief. At night, it might seem reasonable out of hours to be charged £200 to £250 for the inconvenience of the call out. A distress-billing plumber might however get the customer to agree to £500 to £750 for the hours work because “you won’t get anyone else out at this hour mate” as the customer imagines the entire house being destroyed by the flood. Effectively the fee is being blackmailed out of the customer. The customer will feel very unhappy later on.

However, this piece is not about plumbers and if you are a plumber whose sensibilities have been ruffled, I apologise.

A few weeks ago one of our cats was taken very ill. We took the cat during normal working hours to our veterinary surgery which is now part of a chain. They pronounced the cat to be in critical condition, of which there was no doubt, and prescribed various blood tests to detect organ problems and for a viral infection. Of course my wife and I agreed, in our distressed state, and the tests were done. The results were very bad and the outcome for our cat was, alas, that it was his last trip to the vet. We paid the bill, which was enormous, and went home shattered.

Because of the virus diagnosis we needed to get the other cats the same tests to see if they were infected. We had started to smart at the bill, having recovered our wits, and telephoned other vets for some quotes. It turned out that we had been charged double the going rate for our sick cat’s tests. Of course at the time we would have been prepared to agree to almost anything. You cannot say this was value billing; it was taking advantage of our distress. Anyway, there was no value in paying a large bill in advance of losing our cat especially as the outcome was poor anyway.

It is unlikely we will return to the vet practice we have been going to for so long. There appears to have been a detachment from the caring vet practice as far as the animals are concerned and the morality of over-charging or blackmailing of their owners. This is not a way to run a professional practice.

What do you think?

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