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“Would they like the shirt off my back as well?” Bike shop owners fume as Cycle to Work scheme stops retailers charging additional fees

Cyclescheme says removing “unexpected charges” will create “a more positive and fair experience” for customers, but some bike shop owners claim the change will see them lose money on Cycle to Work sales

Cycle to Work scheme provider Cyclescheme has come in for heavy criticism from bike shop owners who have branded the company’s decision to update its retailer partner agreement – preventing retailers from charging additional fees on bikes purchased under the scheme – as “incredibly short-sighted” and “infuriating”, and a change that could lead to shop owners losing money.

The UK’s largest provider of access to the Cycle to Work scheme, the government’s tax-friendly initiative which enables people to buy a bike and accessories through salary sacrifice, Cyclescheme announced this week that it is updating its policies in order to, it claims, “ensure fairer pricing for Cyclescheme customers” and guarantee that “participant experience is in line with their expectations”.

The changes, which will come into effect on 22 December, will see Cyclescheme ask their retailer partners to “commit to a policy of no additional fees and full availability as advertised when a customer redeems a Cyclescheme certificate”. The updates, Cyclescheme says, also reflect the most recent FCA regulatory requirements and compliance policies.

“We are committed to getting more UK employees cycling to work, by removing the financial and accessibility barriers associated with getting a new bike,” Adrian Warren, senior product director at BHN Extras, Cyclescheme’s parent company, said in a statement.

“This update to our retailer agreement ensures that Cyclescheme customers are being met with consistent and transparent pricing, reducing confusion for retailers and participants, and aligning with regulatory guidance.

“With a shared goal between retailers and Cyclescheme to get more people cycling, these changes will create a more positive and fair experience for all participants.”

London cyclists at Hyde Park Corner (copyright Britishcycling.org_.uk).jpg

> New Cycle to Work ‘Flexi Voucher’ founder claims to offer “better experience for cyclists”... but existing provider says it “mimics” its own scheme and is not the “real thing”

However, while Cyclescheme emphasised its “shared goal” with bike shop owners, the news hasn’t gone down too well with some of the retailers themselves, who say the decision to restrict dealers from charging additional fees could lead to them losing money or being forced to back out of the cycle to work scheme.

“An incredibly short sighted and poorly worded statement from Cyclescheme. I’d expect this to be retracted sharp,” Donnie Macleod, owner of Auchterarder-based Synergy Cycles, wrote on Facebook following the announcement.

“The suggestion of unfairness is utterly hypocritical. We no longer compete for the cycle to work customer as much as we compete for (dwindling) margin! The idea that anyone other than the real benefactor of the scheme should pay for the scheme is absurd.

“The tax benefit alone to the buyer is sufficient to pass the fee on to them and it need only be re-worded to them to suggest a saving that is just a little shy of their tax bracket rather than directly proportional to it. We know this because everyone who we ask to pay it, does!

Arguing that the cost should “ultimately be absorbed by the company/employer”, Macleod continued: “It’s bonkers that we the provider of the product, the expertise, the care, and service to deliver the benefit in the first place should have to pay for it. Completely backwards!

“Their statement should be ignored and if they’re serious about protecting their customer they need to remember who’s actually delivering to them.”

> How to save money on a bike with a Cycle to Work scheme

“That’s a joke,” agreed Paul Williams. “Cyclescheme can take their massive cut for doing next to nothing, while a dealer sells a bike that’s 25 percent off then adds it onto a cycle scheme which leaves them losing money.

“It even says full availability which to me means they can’t remove sale bikes or say ‘full price bikes only’ from the scheme availability. This will lose them a lot of dealers or it’ll just be ignored. Shops aren’t going to sell bikes at a loss.”

“Would they like the shirt off my back as well?” asked Bristol-based Will Wells.

“I can’t see how this will be policed,” added Jamie Quiggin. “We don’t charge any extra on RRP bikes, but when a bike is discounted we provide a cycle to work price, which is closer to RRP, but will still show a discount. They will have to be careful that this doesn’t come across as price fixing.”

Meanwhile, the owner of Hereford Electric Bikes said: “What infuriates me is the fairer for ‘all participants’ statement. Is the retailer a participant? Clearly not in the eyes of Cyclescheme.”

Cyclists and pedestrians in Castle Park, Bristol (image: Adwitiya Pal)

> Cyclescheme now claimed to be "unviable" for retailers following change in threshold

Responding to the criticism from retailers, BHN’s Warren told road.cc that the changes were made as a result of customers complaining about being hit with “unexpected charges” when buying bikes or equipment under the scheme, and that the updates would improve the customer experience and lead to more people taking advantage of the scheme.

“At Cyclescheme, we are proud to partner with over 2,600 cycle retailers across the UK and recognise the importance of our network,” Warren told road.cc.

“The considered retailer update is rooted in united commitment and passion to get more people cycling.

“Feedback from our scheme participants has shown that there has been some frustration when faced with unexpected charges to obtain selected bikes and/or equipment.

“We are confident that by creating a consistent and transparent set of guidelines for retailers, this will improve the user experience for our shared customers, and therefore increase the uptake of the Cycle to Work scheme in the long term.”

> Cyclescheme slashes retailer commission rates after industry pressure

This latest change isn’t the first time that Cyclescheme has come in for criticism from retailers concerning its policies.

In 2020, the scheme was forced to reduce its commission rates in the wake of industry pressure and complaints by retailers that changes in the price threshold, allowing people to obtain more expensive bikes over the previous £1,000 limit while enjoying the same tax breaks, were making it “unviable” for them.

“As part of our ongoing commitment to unify our network and ensure value for all, Cyclescheme is going back to its roots,” the company said at the time.

“We were born in a bike shop and remain passionate supporters of the high street and independent businesses.”

Ryan joined road.cc in December 2021 and since then has kept the site’s readers and listeners informed and enthralled (well at least occasionally) on news, the live blog, and the road.cc Podcast. After boarding a wrong bus at the world championships and ruining a good pair of jeans at the cyclocross, he now serves as road.cc’s senior news writer. Before his foray into cycling journalism, he wallowed in the equally pitiless world of academia, where he wrote a book about Victorian politics and droned on about cycling and bikes to classes of bored students (while taking every chance he could get to talk about cycling in print or on the radio). He can be found riding his bike very slowly around the narrow, scenic country lanes of Co. Down.

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36 comments

Avatar
wycombewheeler replied to Rik Mayals underpants | 7 months ago
0 likes

Biker Phil wrote:

I get that, but feel sorry for the shops supplying the goods, sometimes at a loss. it isn't right.

Sadly we live in a world where many people don't give a stuff about anyone else, as long as they get a bargain.

questionable whether it is a bargain. great deal for cycle scheme though

  • pay retailer 90% of the cost of the bike
  • collect 100% of the cost of the bike from the cutomer
  • charge the customer 7% fee to own their bike at the end.

17% return on investment in one year, retailer is probably making less than that, and carries the risk of thefts and unsold stock.

Avatar
wtjs | 7 months ago
6 likes

“We are committed to getting more UK employees cycling to work, by removing the financial and accessibility barriers associated with getting a new bike”

As if that was anything but a minuscule part of the reason why people don't cycle!

Avatar
Car Delenda Est replied to wtjs | 7 months ago
3 likes

Also can't say I've seen a minimum wage job on c2w

Avatar
Brauchsel replied to Car Delenda Est | 7 months ago
1 like

It's a problem with the tax-saving model. Because it's salary sacrifice, you can't sign up if your post-sacrifice salary would be below minimum wage. It'd make more sense to have a specific add-back so C2W deductions were ignored, but it might be a horrible thing for payrolls to administer. 

Also if you don't pay (much) income tax, the tax savings become irrelevant. There is still an advantage in having deductions spread across a year interest-free though. 

Avatar
wycombewheeler replied to Brauchsel | 7 months ago
0 likes

Brauchsel wrote:

It's a problem with the tax-saving model. Because it's salary sacrifice, you can't sign up if your post-sacrifice salary would be below minimum wage. It'd make more sense to have a specific add-back so C2W deductions were ignored, but it might be a horrible thing for payrolls to administer. 

Also if you don't pay (much) income tax, the tax savings become irrelevant. There is still an advantage in having deductions spread across a year interest-free though. 

eroded by the inability to get a discount from the retailer, due to 10% commission and the 7% final ownership fee

Avatar
Losd | 7 months ago
1 like

"Dishonest pricing is our right, dammit!"

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