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 vioin 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."
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 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.
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