September 1934 Radio-Craft
Wax nostalgic about and learn from the history of early electronics.
See articles from Radio-Craft,
published 1929 - 1953. All copyrights are hereby acknowledged.
Repair service businesses have always gotten a bad rap for deliberately
inflating part and labor costs - often deservingly so - but
it's a shame the honest brokers are dragged down by the scum
as this article calls them). Come to think of it, the
word 'gyp' is likely short for 'gypsy,'
which is sure to offend someone these days. Along with admonishing
customers to beware of
shyster servicemen, there is an example of an orchestrated
'sting' operation whereby a radio set was intentionally
'broken' in a certain way with witnesses as to the fault, and
then a couple dozen repair services were called upon to troubleshoot
and fix it, then present a bill for their work. The result is
interesting, and even resulted in one guy being prosecuted.
The story reminds me of a similar much-publicized sting that
was done back in the 1990s against car repair services that
were creating leaks in brake lines and then charging customers
to fix them.
Beware the Service Gyp!
This is an expose of the racketeering methods of "gyp" service
organizations who advertise free radio service, or 50c inspection
service. It is not meant to apply to the Service Men or service
organizations who conduct their business on a legitimate basis.
As a matter of fact, the honest service individual has recognized
the existence of this evil and many have written us complaints
concerning these practices, seeking advice to combat them.
By An Anonymous Contributor
Honest Service Men are thorough and capable.
The honest Service Man who does his work well and expects
a fair return for his labor. is in no position to combat the
"gyp" who offers free service. with the evident intention of
later making an exorbitant service charge. Not unless he stoops
to the same practice to cope with this competition! Fortunately,
action is being urged against such practices, and we know of
no better way to rid this industry of such parasites than by
exposing their methods.
The radio industry, from manufacturer down to Service Man,
today is bemoaning its fate and while the economic depression
has no doubt been the major cause of the poor state of the radio
industry, I feel that they have themselves to blame to a great
Midget radio receivers had their origin in the plants of
small manufacturers and the public at that time did not take
them seriously, but considered them novelties or toys. However,
when the larger manufacturers followed suit and dignified the
midget business by manufacturing such sets themselves, the whole
picture was changed. Can you blame the average individual for
feeling that sets for $10.00 are really worthwhile instruments
if they possess the trade marks of the largest radio manufacturers
in the world? Surely the public has a right to feel that these
companies are not manufacturing "junk," and that if they can
make a radio set that they are willing to put their name on,
to sell for an extremely low price, it is only a waste of money
to buy an instrument selling for from five to ten times that
Such men are equipped with all test instruments.
While I am primarily concerned with the radio Service Man,
I mention the above facts to show that the Service Man has followed
the example set by the "brains" of the industry and as a result
he now finds himself in a deplorable condition. Just as the
larger manufacturers dignified the midget business, so has the
Service Man lent dignity to the 50c service proposition.
(Editor's note: This magazine does not entirely agree with
the author on this point. The facts of the matter are that there
is a place for midget radio receivers, and that a good many
homes have such a set to supplement the larger console receiver.
This prevents domestic quarrels as to which popular program
one may select. The unfortunate part, which the midget is responsible
for and which the author fails to mention, is that many manufacturers
are listing these sets at a very narrow margin of profit to
themselves and to the dealers. In so far as service work is
concerned, what chance has a Service Man of honestly estimating
a major repair that may total over $10.00 on a set that is over
2 years old? The customer's retort to such an estimate is generally
to the effect that he can purchase another set, even though
a midget, for that price!)
Another problem of the Service Man concerns these sets themselves.
Due to their compact construction, and complicated circuits
because of the use of so-called "composite" tubes, it is a most
difficult type of receiver to service. An investment in elaborate
test equipment and up-to-date service manuals is required, in
addition to continuous study of new circuits, tubes, theory,
etc. - if the Service Man is to be successful in servicing this
type and the larger new receivers that are being manufactured.
How can the Service Man obtain a fair return for this investment
of time and money, when he must spend hours to repair a midget
receiver that must be, of necessity, estimated low, since a
similar new set can be purchased for a paltry few dollars?
Fig. A - The "racketeer" first removes the
Fig. B. - Then phones back the exorbitant
Try to set the set back in good shape!
When a customer sees an advertisement of an apparently large,
reputable organization offering free radio service, or for 50c
(so-called "inspection" service), there is no reason why he
should not feel that it is a legitimate charge for honest, efficient
service. However. we all know that this is ridiculous and that
the only way such an organization can survive is by using racketeer
Everyone connected with the industry knows that the game
is to take the receiver to the shop regardless of what mayor
may not be wrong and to then notify the customer that the set
needs a new power transformer or some other part and that the
charges are $15.00 or $20.00. The only trouble with the set
might have been, if a D.C. set, a reversed plug, or in some
other set - a bad tube.
(Editor's note: This is only a small sample of some of the
practices of "gyp" Service Men. Some even go so far as to resell
the tubes [which are still good, but nevertheless used] which
they have replaced on previous service calls. Others resort
to the nefarious practice of actually creating additional trouble
in a radio receiver when a customer refuses to have the set
"repaired" when the exorbitant estimate is learned.
Personally, we believe that the majority of individual Service
Men are honest. The service organization that advertises or
claims free service or service for 50c is the outfit that the
consumer should beware of.)
While we all know that ethics in all lines of business are
subject to great debate when measured against ideals of strict
honesty, the practices in the radio service industry cannot
be justified except by comparing them with methods used by racketeers
operating outside the law. The Better Business Bureaus have
had many complaints from consumers who have been fleeced by
the radio service racketeers and, while they have done much
good in their attempts to protect the public, their power is
limited unless they are willing to actually bring the culprit
to court. This involves the expenditure of money besides requiring
detailed proof that the power transformer or other parts were
not supplied or not needed, and very few persons desire to make
martyrs of themselves and testify to that effect. Besides it
is rather difficult to sometimes prove the truth, especially
in a court of justice where cases are judged on technical details.
As a result the service racketeers are permitted to continue
in their illicit practices.
As an indication of the "racket" methods and inconsistencies
of the "gyp" Service Man, herewith is a reprint from a bulletin
published by the Kansas City Better Business Bureau.
"Complaints regarding the servicing and charge of certain
radio repair men several months ago led to an investigation
by the Better Business Bureau which, thus far, has brought one
radio Service Man before the prosecuting attorney's office,
eliminated 'free estimate' advertising, stopped a number of
'gyp' repair men and practically cleared the radio repair field
of unfair practices.
"Approximately 400 radio service advertisements were stopped.
The majority were those offering free radio inspection as in
Expert Radio Repairing; guaranteed; all makes; Free Estimates
in your home; any time; anywhere; lowest prices. Call ....
"Complaints indicated that the set owner, lured by the free
inspection offer, called in the man offering this type of service.
If of the 'gyp' type the repair man sometimes insisted upon
taking the chassis to his shop for a check-up. Later he called
stating the set needed extensive repairs and often charged exorbitant
prices for alleged repairs which actually were not made.
The· "Free Inspection" Plan Unfair
"The 'free inspection' plan thrived due to the set owner's
misconception of the cost factors involved in radio repair work.
Contrary to popular opinion, the Service Man derives most of
his profit from his labor. For this reason the legitimate radio
Service Man makes a specified fixed charge for a call and a
standard charge for various service operations.
"The Bureau felt this 'free inspection' plan to be one of
the trade evils having the tendency to break down public confidence
in all radio service advertising and evolved a plan to check
both the 'free inspection' advertisers as well as those having
a call charge.
A Radio Set Is "Prepared"
"Accordingly, a popular make radio set was tested, equipped
with new tubes, passed upon as being in efficient working condition
by a committee of seven expert radio technicians and set up
in the home of a person cooperating with the Bureau. A lead
wire to the speaker voice coil was disconnected, thus making
the speaker 'dead,' and various radio repair concerns were called
to service the set and estimate the cost of repairing it to
insure satisfactory reception.
Fig. C - Honest Service Men estimate at homes.
Fig. D. - Auto-radio men are victims of manufacturers'
sales "racket" re - free installation.
"Following each inspection and estimate, the set was checked
by the committee before the next Service Man called. Typical
reports as to what was wrong with the radio receiver and the
estimated cost for repairing as given by some of the 'free estimate'
Service Men were as follows:
(1) Light overhauling needed. Cost, $2.90.
(2) Condenser and voltage divider. Cost, $4.50.
(3) New cone and field coil needed, $5.75.
(4) New Speaker field coil. Cost, $4.50.
(5) New condenser, $1.75. Output transformer, 85c,
plus labor. Total charges, $4.60.
(6) Audio transformer needed. Cost, $3.50.
(7) Voice coil necessary. Cost, $3.00.
(8) Filter condenser repair. Cost, $3.75.
(9) New filter condenser. Cost, $7.25.
(10) Speaker coil necessary. Cost. $2.75.
(11) Speaker cone and voice coil. $7.00.
(12) Field coil needed. Cost, $5.00.
"Out of approximately 25 'free estimate' calls a small percentage
of the Service Men found the actual trouble and offered to repair
the set for $1.50!
Service Charge Operators Called
"Using the same 'prepared' set the Bureau then called a number
of radio service concerns or individuals charging from 75¢
to $1.50 for service calls regardless of whether or not they
make the repairs necessary. The same wire was disconnected.
"Approximately 90 percent of the 'pay service' concerns found
the loose wire at once and either repaired the set at no extra
cost above the service charge or made an additional charge.
No estimate was more than $1.50.
One Fraudulent Operator Caught
"Only one of this group attempted to run up charges on the
set. This operator, who charged 75 cents for the service call,
stated the radio had a burned-out condenser which would have
to be replaced and that it also needed one. H.P. resistor, one
250,000 ohm resistor, all loose connections soldered and the
speaker cone tightened. His repair charges were set at $6.25.
"Following his estimate the set was checked by the committee
and it was found that additional wires had been cut. These were
left as found but all parts were marked by a Bureau investigator
in the presence of the committee. The Service Man was then called
to pick up the set and repair it.
"Upon its return the radio was examined. The wires had been
repaired but none of the parts charged for had been replaced!
Called to Prosecutor's Office
"The repair man was called before Michael W. O'Hern, assistant
prosecuting attorney, and was confronted with the marked radio
set and the receipted bill showing the parts charged for.
"He admitted his guilt and asked for leniency. No announcement
yet has been made by Mr. O'Hern as to whether or not action
will be taken against this operator.
"This radio service investigation is being continued by the
Better Business Bureau. Other sets have been placed in residences
to check the claims of repair men suspected of defrauding the
public. Only by constantly combating such evils can the public
and legitimate radio service concerns be protected."
(Editor's note: In New York City the service racket is far
worse than that depicted for Kansas City. The editor in going
through the files of the N. Y. C. Better Business Bureau found
an astonishing number of complaints against "gyp" radio service
organizations, many of which, through the meritorious efforts
of. the B. B. B. culminated in a satisfactory adjustment.)
"Racket" Tube Practice
The radio Service Man has furthermore been encouraged to
follow these practices by the urging of the largest reputable
manufacturers. When large tube manufacturers advise the radio
Service Man to offer to inspect the customer's radio set without
any charge with the idea in mind of selling the customer a new
set of tubes, what is he doing?
First, he doesn't care whether the Service Man makes much
money but is only interested in selling tubes. Second, the Service
Man says to himself. "If these tube manufacturers have decided
that this is the legitimate way for me to conduct my business.
it must be, for who am I to question the intelligence and plans
of million dollar organizations?" Third, the Service Man is
led to believe that his services are not worth anything and
that his sole income is to be derived from the sale of tubes
or other parts whether the customer needs them or not.
Drawing the Line
(Editor's note: There should be a line of distinction here.
While the margin of profit on tube sales is indeed small, still
we believe it is fair return to the Service Man to reimburse
him for his labor in testing the tubes, overhead, etc., providing
the tubes are brought in for testing. Where a service call is
made and tubes are shown to be at fault, a reasonable charge
should be made for the trip in addition to the list price charge
of each tube that is changed. Unfortunately, we must admit,
very few Service Men are content with the small profit that
is made on such a sale, and therefore there arises a tendency
to invoke racketeering methods for making a service call pay.
We doubt if the manufacturer can be blamed, except perhaps
in regard to his recklessness in selling to "cut price" dealers.
Because of "cut prices" in tubes "gyp" service methods have
been encouraged, since Service Men cannot possibly make a service
call pay on the narrow margin of profit obtainable on the sale
of a few tubes.)
Fundamental Corrective Measures
After reading the above, you might say just as Mark Twain
once said, "Everyone complains about the weather but no one
does anything about it." Mark Twain's statement is very true
for obvious reasons, but surely something can be done about
the radio service situation.
Radio manufacturers continually emphasize the importance
of the Service Man and in connection with automobile radio equipment,
they even go so far as to investigate and appoint official service
stations so that their products will be properly installed and
serviced. However, do they try and see to it that the Service
Man gets a legitimate charge for honest and efficient service?
They are not concerned with his welfare, for if the Service
Man is foolish enough to conduct his business on an unsound
basis let him suffer.
Here is the point where something can and should be done.
Let manufacturers cease advertising automobile radio receivers
with free installation, as this sort of pricing does not allow
the dealer to pay a legitimate charge to the Service Man for
installation and service. The manufacturer should look further
than the end of his nose and realize that, inasmuch as the Service
Man is getting very little for his services, he is going to
be compelled to use dishonest methods to get money from the
public so as to survive. All this in the end tends to lower
the confidence of the public in radio in general and has its
adverse effect upon the manufacturer.
(Editor's note: The cut-throat service organizations employ
a great number of tricks that will not pass the spotlight of
square business methods. We are very much interested to hear
of some of these shady practices as used by such radio houses,
and we urge "legitimate" radio men to write to us and let us
know of any unfair competition that makes it difficult to run
an honest business.)
Posted July 22, 2015