Excerpted
from Strings
magazine, May/June
2002, No. 102.
Discuss
the issue of teacher commissions in the String
Talk forums at www.stringsmagazine.com.
Does she
or doesn’t she? If the question concerns
whether your teacher is taking a kickback from
an instrument dealer for helping you buy that
fine violin, viola, or cello, the answer may
very well be yes. The trouble is, the typical
student is unaware that ten to 30 percent of the
price of that violin is going to his or her
teacher. In some states, this kind of
nondisclosure constitutes consumer fraud, but
that phrase usually comes up only in the context
of used cars and lemon laws, not the rarified
world of fine stringed instruments. Everyone but
the buyer knows what’s going on, and few will
talk about it. After all, the instrument dealer
or maker and the teacher both profit nicely from
inflated prices—whether the instrument is a
$10,000 student violin or a treasured Stradivari.
The
American String Teachers Association does not
have an ethics code, policy, or stance on the
subject, according to an ASTA spokeswoman. The
American Federation of Violin and Bow Makers has
a code of ethics that fails to mention
commissions (see AFVBM
Code of Ethics).
One longtime maker and dealer who asked not to
be identified calls the AFVBM code mere
"window dressing." The Violin Society
of America has no code of ethics for its members
and sets no guidelines for participation in
student instrument sale commissions.
Though the
topic makes most business owners queasy, a small
community of instrument shop owners is becoming
increasingly vocal about the ethics of paying
and receiving teacher commissions. They believe
that if the practice is going to continue and
endure, it must be brought out in the open so
that the commissions are no longer hidden costs
on the bill of sale for an instrument.
Portland,
Oregon, maker and dealer David Kerr is among
those who have found themselves in an
uncomfortable position over teacher commissions.
"We had one teacher call us one time and
she said, ‘What commission do you pay?’ And
I said, ‘We don’t pay teacher commissions.
If you want to tell your student that you’re
going to get a percentage and we’re going to
put that on top of the price, I’d be happy to
give that to you as long as it’s all out in
the open.’ And her response was, ‘I need a
new kitchen floor, but I’m not going to do
business with you.’ She actually said, ‘I
need a new kitchen floor!’ OK, well, I don’t
think this is the way to get it."
Because
the issue is so sensitive, it can be difficult
for a maker or dealer to broach the subject. But
when you walk into the atelier of David
Chrapkiewicz, Rapkievian Fine Violins, in the
Washington, DC area, it’s clear what his
position is. There, mounted on the wall in plain
view, is a copy of "The Hazards of Secret
Commissions and the Duty to Disclose," a
chapter from the seminal book Violin Fraud:
Deception, Forgery, Theft, and Law Suits in
England and America (Second Edition, Oxford
University Press; 1997), written by California
violin maker and attorney Carla Shapreau and
Professor Brian W. Harvey.
As a
regular part of doing business, Chrapkiewicz
writes out all costs on the invoice for the sale
of each instrument. Chrapkiewicz calls the
ethics of teacher commissions a "hot
issue" that must be addressed by the
musical community and professional
organizations. He finds the whole issue
gut-wrenching and recalls how he was
"initiated" into the practice when he
first began making instruments. "I naively
thought I’d start making violins and showing
them to violinists, and I had not a clue that
there was this expected practice going on,"
Chrapkiewicz says. "The reception I got was
warm, and they’d say, ‘Oh, it’s a very
nice violin,’ and ‘I’ve got many
students.’ Then there’d be this pause and a
throat-clearing. I had no idea what that was
about. Finally, after about three or four years,
a teacher who was not taking commissions sat me
down and gave me the facts of life. He said, the
reason why this person clears their throat is
that they’re waiting for you to say, ‘Yes,
of course, I’ll pay you a commission of 10
percent.’"
A Delicate Matter
Teachers
who participate in this practice argue that they
are providing the student with years of
expertise to assist in what can be a very
difficult selection process and ultimately can
help save the student both time and money by
getting the best and most affordable instrument
available. "As a highly trained violinist
and teacher, I feel my students must have the
best instrument possible to allow them to fully
experience the joys and beauty of music.
Students often request that I seek out
instruments and/or bows for them. I help
students decide on the right price range for
their budget and buy from reputable dealers who
stand behind their work and product," says
Bernard Chevalier, a Northern California music
educator. "I spend hours searching for
leads and driving to the violin shops, testing
and rejecting instruments. I confer with the
repairman to ensure the setup is to my high
playing standards. If successful in my search,
back home, I spend more hours playing the chosen
ones ensuring one or two meet my students’
needs. Finally, after the sale, I continually
demonstrate to my students why I helped them
choose this instrument.
"Compared
to my students, I have superior knowledge about
quality, price, playability, setup, strings, and
rehairing. Compared to a violin salesman, with
my decades of practice, I have vastly superior
playing and demonstration ability. Why should I
not be paid a fee for lending him my expertise
to sell his product?"
But
Chrapkiewicz says the practice is unethical
because students typically don’t know about
it. They go to their teachers for advice on
choosing an instrument, trusting that the
teachers are simply being helpful by sending
them to certain shops. "What they’re
saying is, ‘Just mention my name so they’ll
put that 10- or sometimes 20- or sometimes
30-percent commission in the mail," says
Chrapkiewicz, adding that he doesn’t object to
teachers getting paid for their time. He objects
when the students don’t know. Teachers should
tell their students that they expect a
finder’s fee, he says, otherwise the dealer or
maker is in a bind because he or she has to jack
up the price on an instrument to accommodate the
commission.
"The
issue is a delicate one," Chrapkiewicz
adds. "I, as a maker, have to walk a knife
edge. It can ruin me one way or the other. If I
don’t ask a teacher and I send him a
commission, that would ruin me in the eyes of a
player." And if he broaches the subject
with a teacher who doesn’t accept commissions,
everyone is embarrassed. However, he adds,
"Some of the sweetest people, who I would
never expect to take a commission, say, ‘Yes,
send me 10 percent.’ What am I going to do? If
I refuse, they won’t do business with me
anymore."
Teachers
are not entitled to deceive their students,
Chrapkiewicz says flatly. If a teacher is
sending a student to a particular shop, the
student should ask that teacher point-blank
whether he or she takes commissions from the
sale of instruments. If the teacher doesn’t,
students should then ask the teacher if he or
she can arrange a 10-percent discount.
Fritz
Reuter is another dealer who has grown cynical
about string teachers’ motives. Reuter, a
Chicago dealer, rails against teacher kickbacks
on his website (www.fritz-reuter.com)
and often refers to the stringed instrument
business as "underhanded" and a
"racket." His website also contains
tips on how to get an honest deal on an
instrument. Reuter, a founding member of the
AFVBM, says he was "kicked out" of the
organization because of his strong views on
ethics in the industry. "I just love the
First Amendment," he says whimsically.
From the
most preeminent string teacher in America on
down to the small-town grammar school violin
teacher, commissions are being secretly
exchanged between shops and instructors, Reuter
says. But at Reuter’s shop, each sale of an
instrument or bow comes with a detailed bill of
sale and a warranty stipulating that the shop
does not pay third-party commissions. He advises
students and parents to look for something in
writing that states that no money—or
merchandise—exchanged hands for a commission.
"I know a case here where there’s a very
successful teacher—he has very fine
students—and anytime he gets money he puts it
into his son’s cello," Reuter says.
"Whenever he gets the kickback, he
doesn’t take the money; he pays off the cello
of his son. In this case, the son gets a very
valuable instrument for nothing."
Transactions
are purest when the student goes off on his or
her own to shop for an instrument without
direction from a teacher, Reuter says, but these
instances are rare. "In the majority of
cases, the student feels obligated to go with
what the teacher recommends, because he is at
the mercy of the teacher for his
education," he explains. "So the
dealer and the teacher, they’ve got the
student over the barrel."
Teachers
make an extra buck on the side, Reuter says, and
dealers can sell their instruments. The dealer
pushes up the price because neither student nor
teacher knows what the value of a given
instrument is—but a teacher is often well
aware of how much the family can afford,
particularly in wealthy neighborhoods. "The
prices [for instruments] are totally arbitrary," Reuter contends. "Sound is
subjective. You can find a good-sounding
instrument in any price range, almost. People
assume you pay a higher price for a better
product. But that has no bearing on it.
There’s no relationship, really."
Driving up the Price
In
Chicago, teachers at one fabled North Shore
music school commonly tell students and parents
that if the student doesn’t have a violin
valued between $40,000 and $60,000, they’ll
never make it to Carnegie Hall, Reuter
says—and obviously, the higher priced the
instrument, the higher the commission. Reuter
uses as an extreme example the 1995 sale of the
coveted 1683 Gingold Strad. When patriarch Josef
Gingold (who taught Joshua Bell) died, the
violin went to his son, who then sought $1
million for it. The son then went to a dealer
and assumed that the instrument would be sold
for $1,250,000, allowing a generous 25-percent
commission for the dealer. "Instead, the
dealer sold it for $1.6 million, gave the son $1
million, and kept $600,000," says Reuter,
adding that "there are so many people in
line with their hands out."
Reuter
says his shop has "never paid a
nickel" in commissions in all the years
he’s been in business. But he suffers the
consequences: Teachers who want commissions
won’t send their students to him.
Portland
dealer David Kerr says the crux of the issue is
that students trust their teachers
implicitly—and they must in order to study
with them. But teachers who earn part of their
income from commissions on instrument sales are
taking advantage of that trust, he says.
"What we’ve seen oftentimes is that the
teacher recommends an instrument based on how
much they’re going to get as a commission
rather than whether it’s the right instrument
for the student," Kerr says. "I’ve
seen cases where it’s obvious that they’re
just trying to get more money."
Ask Kerr
how many shops he knows of that do not pay
teacher commissions, and he laughs. "I know
of three shops in the United States that don’t
do it. How common do you think it is? For a lot
of shops, it’s the only way they can survive
because teachers will just go somewhere
else," he says. There are plenty of
teachers who either don’t take commissions or
who take the money and return it to the student,
Kerr adds. He urges students and parents to be
cautious when soliciting a teacher’s opinion
about an instrument. Don’t tell the teacher
where the instrument came from, he says, and
don’t reveal the price. Ask only what the
teacher thinks of the sound and whether that
sound is right for the student.
"We
never tell people the price of an instrument
until they’re checking it out," Kerr
says. There are good reasons for this:
"It’s not always the most expensive
instrument that has the right sound for each
person," he explains. "Understand that
instruments aren’t priced for their sound.
Then you start understanding what it’s all
about. They’re priced according to who made
them and the condition, because sound is
subjective."
Call for a Change
When Kerr
discusses teacher commissions, he recalls
something that renowned British violin dealer
Charles Beare, of J&A Beare Ltd., said some
five years ago at a convention of the Violin
Society of America. "He said that the
American shops in particular need to stop doing
this because he just found it
reprehensible," Kerr recalls. "So
here’s the greatest expert in the world
saying, ‘Why are you guys doing this?’ But a
lot of shop owners feel that their hands are
tied—they may go out of business because the
teachers will leave them."
Rochester,
New York, violinist and bow maker Frank Testa
has seen the teacher, commissions
issue from different angles. In the 1970s, he
bought a moderately expensive instrument
and got a 10-percent discount because, he
believes, his teacher told the dealer he
didn’t want a commission. "So in defense
of teachers, there are quite a number that I
know of who are active at universities and who
consistently refuse a commission and insist that
the dealer lower the price by [eliminating]
their commissions."
But the
practice is so pervasive that sometimes dealers
will send a check unsolicited to the buyer’s
teacher—offending those teachers who feel
it’s reprehensible to accept payment. Testa
finds the issue so insidious and offensive that
he contacted the U.S. Department of Justice
during the Reagan administration and asked for
an investigation. Testa was told that
consumer-fraud–type complaints such as this
one didn’t have a prayer of being pursued in
the political climate of that time.
That
didn’t dim his contempt for the practice.
"I wouldn’t have a problem with it if it
were all up front and everybody knew what was
going on. But the betrayal of trust is what
bothers me," Testa says. "There’s an
unseemly quality to the commissions given that
[those dealers and teachers who conform to the
practice] have a vested interest and that vested
interest [often] is not known."
Shop
owners like Kerr, Reuter, and Chrapkiewicz agree
wholeheartedly.
"I
don’t feel comfortable with it,"
Chrapkiewicz says. "Let’s just let
everybody know [what the cost represents] and
not have this secret game going on."
*************************************************************
Lashof
Violins is in total agreement with Kerr and
Reuter and is totally opposed to violin teacher
commissions or kickbacks. We do feel that the
teacher should be paid for his or her time, but that
is the responsibility of the person looking for
the instrument. If you were to ask a
mechanic to evaluate a car you were considering
to purchase, the mechanic would charge the potential buyer
for this cost, not the person selling the car.
It is true that many violin teachers are
excellent players and it may be to your benefit
to bring additional ears and hands to help you
determine what instrument best suits your needs,
while you keep in mind your personal financial
limits and expectations.
An excerpt from the above Strings Magazine
article which sums it all up.
"Compared
to my students, I have superior knowledge about
quality, price, playability, setup, strings, and
rehairing. Compared to a violin salesman, with
my decades of practice, I have vastly superior
playing and demonstration ability. Why should I
not be paid a fee for lending him my expertise
to sell his product?"
This
teacher's idea of the purchase process seems
misconstrued-- it is the
student that they are lending their expertise
to, not the dealer. While this teacher may know more
than their student, they lack greatly in expertise
when compared to
the decades of training a violin shop has in
violin setup, rehairing, pricing, or instrument
authenticity.
***************************************************************
In the past there have been some great violin
firms like the Hills of London that were completely
untainted by this kind of unethical behavior.
Not unlike the Hills, most of the violin dealers
in the past were also makers. When the world did
not have global access by airplanes, telephones,
faxes and email, a local dealer's existence
depended on integrity and reputation. The
town and its surrounding area was its
marketplace, not the entire world. Lashof Violins does not sell instruments
via the internet or through shipping because we
wish to maintain a lasting relationship with our
customers that is based on trust and our
commitment to integrity.
The bottom
line is that teacher commissions, kickbacks,
bribes, payola (or whatever you want to call
them) are illegal, unethical, and immoral. It
hurts all of the parties involved in one way or
another.
* The
student or purchaser is hurt the most by teacher
kick-backs, in that the student may pay too much
for the instrument, get less for a trade in, and
is limited in the number of the instrument choices available to
them. The student is also hurt because they
have placed their trust in their teacher to
offer them an unbiased opinion and instead
receive a tainted recommendation.
* The
dealer that commits this act in concert with the
teacher, will eventually get caught in this or
some other illegal activity, as many a dealer
has, and will be brought to justice.
* The honest
dealer that does not partake in this
activity is hurt because their shop is shunned by
those teachers that demand a kickback and will,
therefore, not recommend that store.
AFVBM
CODE OF ETHICS
The conduct toward which members of the
American Federation of Violin and Bow
Makers, Inc. shall strive is outlined in
the following general principles, which by
the way do
not address the issue of teacher/dealer
commissions directly.
1. Professional
Standards. A member of the
Federation shall maintain universally high
technical standards and strive constantly
to improve his or her competence and the
quality of his or her services.
2. Objectivity
and Integrity. A member of the
Federation shall maintain his or her
objectivity and integrity and be
independent of those he or she serves.
Objectivity refers to the ability of
maintaining an impartial attitude to all
matters under review. Integrity is an
element of character which is fundamental
to a client's reliance on a member of the
Federation. While neither of these
qualities is precisely measurable, the
profession holds them up to members as
essential through rules embodied in the
Principles of Professional Conduct.
3. Responsibility
to Clients. A member of the
Federation will be fair and candid with
his or her clients and serve them to the
best of his or her ability. He or she must
show professional concern for their best
interests in complement with his or her
responsibilities to the public.
4. Responsibility
to Colleagues. A member of the
Federation shall conduct himself or
herself in a manner which will encourage
cooperation and good relations among
members of the profession.
5. Other
Responsibilities. A member of
the Federation shall conduct himself or
herself in a manner which will enhance the
stature and respect of the profession and
its ability to serve the musical community
and the general public.
Violins
