We are continually hearing stories from local businesses and customers who have been stung by their previous waste contracts. Some are paying £1000s just to get released from contracts which have turned out not to be as reasonable as they first appeared. It may be a surprise to you that there is currently no regulatory authority for the waste management sector, so if you find you are being treated unfairly, there are very few organisations to turn to.
From our experience of reviewing contracts in the waste management industry and from speaking to customers with first hand experience, we have come up with a handy list of things to look out for in your contract.
1.Check the Terms and Conditions
For reasons which will be explained throughout this article, the Terms and Conditions should be thoroughly read. The industry is not regulated, so who knows what weird and wonderful conditions may be in your T&Cs. They aren’t the easiest to read and you might need a magnifying glass, but you may save yourself from future headaches.
This is probably the most important part of your contract. Failure to understand your rights to cancel could cost you £100s or £1000s in the future. So even if a contract gives you cheaper lift rates, once you factor in the potential penalty of cancellation, it may not be so cost effective.
After reviewing the Terms and Conditions of current waste collection contracts available in the market today, there is an overwhelming number which have very strict cancellation policies. Some only give you a specific month to give your notice. One such contract we found was for 2 years, with cancellation notice expected in month 22. Failure to provide notice in this month would result in your contract being extended for a further 12 months. Any notice given outside this notice period would lead to a significant penalty, typically 50% of the value of the contract.
We have become very aware of how these cancellation policies can impact businesses, especially SMEs, which is why our cancellation policy is only a 90 days notice period, which can be given at any time in the your contract.
3.Potential price changes
With any contract, there is always the potential for price increases. A level of price increase can be expected, as the disposal market can be volatile. Most terms and conditions will state that the company has the right to put up prices in order to cover costs, and there is very little you can do about this, however, you need to be able to have the option to leave, with little or no cost if these prices become unaffordable.
Unlike other industries such as the energy sector, there appear to be very few waste collection contracts which have a fixed term for prices, and you can be susceptible to multiple price increases in the duration of your contract term. The trick in the industry is the age-old technique of providing really low prices for new customers and then hiking them up over the contract term, in order to recover the discount from the initial prices. This why it is vital that you are clear on whether you would have an option to leave after the price hikes.
Again, we have identified that this can be a concern for local businesses, and although we too require small price increases in order to cover the rising wages and disposal costs, our customers are given fair warning of this price increase and are still able to cancel within 90 days, with no penalty charge for leaving. This flexibility allows our customers to easily opt-out of their contract if they feel they can get a better price elsewhere.
4.Waste Transfer Note charges
All waste producers are required by law to hold a Waste Transfer Note (WTN) to document the movement of their waste as stipulated by the Environmental Protection Act 1990 (see our page on Your Responsibility for further details). When a business signs a waste contract for the removal of their waste, the waste collector or carrier, is required to produce, store and present this document to you. They are also expected to keep this document up to date. Generating this document and providing it to the customer can incur some administration costs to the provider, so it is an industry standard that these costs are recovered as a WTN fee in the contract. This charge should be clearly explained on your contract.
Waste companies charge for the WTN in different ways. Some charge a small fee once per month, others once per year. It can be based on the number of receptacles or a fixed fee regardless of contract. The method of charging and the total charge varies, but regardless it should be clearly explained in the contract. When comparing quotes for contracts, it is definitely worth including the WTN fee or any additional administration charges.
5.Excess charges based on tonnage
Another common trick in the waste industry is to provide a bin lift price, usually quite a reasonable price, but have a caveat so an additional charge can be applied if any bins exceed a certain weight. These weights are calculated using equipment on the bin lift which weigh the bins before they are emptied.
Although this extra charge seems reasonable at first (it makes sense that you would need to pay more if you are producing more waste), however charges can quickly escalate with little control or warning to the customer. It can make balancing the books very difficult. You are often not provided with any warning if your bins are exceeding an agreed level, meaning you get a nasty surprise on your next invoice.
At Cardiff Council, we do not have additional charges for receptacles over a certain weight. There is a set lift rate, agreed at the beginning of your contract meaning our customers are able to predict their monthly invoices. There is a maximum lift weight for all bins, but this is for health and safety reasons, with receptacles filled over the accepted limit being left unemptied until the fill level can be reduced.
When agreeing to a contract which includes bins, there is often a charge for bin hire. Once again these charges can vary between providers, so it is always worth including hire charges when comparing quotes.
It is also worth checking for liability during the hire in the terms and conditions to see what would happen in the instance of a bin going missing or getting damaged. If your business is in a busy city centre or retail area, you may find that keeping tabs on your bin is easier said than done, so you will need flexibility in this aspect of the contract. Some providers offer insurance, to cover these instances. This is usually an additional charge, so again, it is worth considering when making comparisons.
We understand the practicalities of waste storage for businesses and the lack of control once you have presented your bin for collection. We always work with customers to find the most suitable collection point, sometimes using keys or codes to access secure bin stores, so we can help prevent any bins going missing. Losing or damaging a bin is just as frustrating for us as it is for you, so when these instances do occur we are quick to replace or repair the bin.
7.Liability for non-collections
Another common frustration from waste customers is the issue of non-collections. In an ideal world, all collections would be completed at a very specific time on a regular schedule with no obstructions, however we all know this is not always possible. There are bound to be instances when vehicles breakdown or roads are blocked or mistakes are made. This is not really the issue for customers. The issue is the lack of recollection when this occurs.
There are several waste contracts which stipulate in the Terms and Conditions, that if any collection problems arise, the collector will not be expected to re-collect or will only collect once an additional charge has been agreed. There may be a handful of instances when this is mildly acceptable, however, some T&Cs specify that even if these instances are within the provider’s control (i.e. vehicle or staff shortages) the provider will still not be expected to recollect.
This is definitely another important aspect to consider. As part of a local authority, we pride ourselves on being fair and honest so if we are at fault and for any reason do not collect your waste as agreed, we only ask that we are given reasonable time to recollect (typically 48 hours) and we will recollect free of charge if we are at fault.
And finally, the easiest way to find out if you are choosing a good provider is to get personal reviews or recommendations from fellow businesses in the area. Going online and reading reviews will always give you a skewed reflection of the real services, as only the disgruntled customers make the effort to write a review. There is a wealth of knowledge within local businesses, so it is worth networking and getting recommendations from others.
We hope that at least some of this information is useful to your business. If you would like any further advice on waste contracts or any other waste related issues, please get in touch, and one of the team will be sure to help you.