When Can You Talk to Other Child Care Programs About Your Rates?

Here’s the transcript to my podcast, “When Can You Talk to Other Child Care Programs About Your Rates?”

Welcome! I’m Tom Copeland. Thanks for listening.

This show is about the business side of child care and is for those who work in child care centers and family child care providers.

Today, I’m talking about “When Can You Talk to Other Child Care Programs About Your Rates?”

What’s wrong with the following three scenarios?

One – At a child care training workshop or conference you ask another attendee, “What do you charge?”

Two – You call up another child care program who knows you and ask, “Will you be raising your rates this fall?”

Three – You walk into a neighboring child care center, identify yourself as someone who works in a child care center or family child care home, and ask to see a copy of their rate schedule.

What’s wrong is that in all three situations you are breaking the law!

Yikes! What’s going on?

It’s illegal for competitors to discuss rates.

Federal antitrust laws are designed to encourage competition and discourage competitors from setting prices higher than they would be otherwise. To discuss rates with another child care provider or center is considered price fixing and is against the law.

There doesn’t have to be an agreement to charge the same fees. It’s simply illegal to share any information about your rates. Even sharing information that you will keep your fees stable over the next year is illegal.

However, here’s one way to get around this.

It’s not illegal to discuss rates if the other person you are speaking to doesn’t know you are a competitor. So, if you call another child care program on the phone or visit a program and don’t identify yourself as a child care worker, you can ask what the program charges.

“Hi, I’m Sally and I’m a parent looking for child care. What do you charge?” When the other person doesn’t know you are a competitor – it’s legal to lie!

It makes sense that you would want to know what other child care programs are charging to help you evaluate your own rates. If you are part of a child care association that wants to collect rate information, here’s how you should do it.

The person doing a rate survey should not be a competitor. The results of the survey must be shared with the public, and not just with association members. So, give the results to your local CCR&R agency or post it on the Internet.

Here are some other legal steps you can take to collect rate information:

Contact your local Child Care Resource & Referral agency and ask about rates in your area. Since this organization is not your competitor they can share any information they have about average rates and fee policies.

Look on the Internet for online classified ads (Craigslist, child care center websites, etc.) for child care rates.

Ask incoming and outgoing parents what they paid or will pay other caregivers. Parents are not your competitors.

You can make your own rates available to the public (just not privately to competitors). In other words, it’s okay to put up a big neon sign outside your program that flashes your rates in bright yellow. Or post your rates on your website, or pass out a rate flyer to interested parents, or put them in an ad.

By following these steps you can avoid breaking the law as you collect rate information.

For more information about price fixing and all other aspects of the business of child care, visit my blog at www.tomcopelandblog.com. There I’ve posted hundreds of articles and other resources to help you succeed as a business.

Thanks for listening. This is Tom Copeland hoping you will listen in for my next broadcast at the Child Care Bar and Grill.

Tom Copeland – www.tomcopelandblog.com



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