Rental dishes and linens are part of most big parties. Photo by Carasco Photography.
You are planning a big party or wedding reception, so you plan to hire a caterer to make things easier. Your caterer is handling rentals of dishes, furniture, and other necessities, because that makes it even easier for you. But maybe you’d like to know how much you are paying for this convenience.
There are three different ways that caterers generally handle pricing of rentals: pass-through, mark-up, and (for lack of a better word) kick-backs.
Pass-through is exactly what it sounds like: The caterer passes the exact price from the rental company on to their client. Some caterers do this as a courtesy to their customers, and because they make their profits in other areas.
Marking up rentals is a fairly common practice. The caterer adds a percentage or small amount on to the rental bill to compensate them for the time they spend managing your rental order. This is generally not itemized on your invoice.
A few caterers have arrangements with one or more rental houses whereby the caterer receives an amount equal to a percentage of the total rental bill from the rental company. Unfortunately for you, this means that the caterer has a financial incentive to steer you to the more expensive parts of the rental catalogue. You can be sure that no caterer who does this will tell you up front that this is their practice. (I’ve written about this subject in greater detail before.)
So, how do you know what your caterer does with regard to rentals? You’ll have to ask. Good interview questions to ask might be: “Do you mark up rentals? If so, how much is your mark-up?” and “Does your rental company give you any incentives to work with them?” If you don’t like the answer, you can negotiate with them or move on to a company whose answers you like better.
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