There's nothing like the feeling in your gut when you know you're getting screwed. Rest assured that passing the word around is going to cost them much more than $400 in lost business. What's really unfortunate is that simple honesty is all they need to continue to be successful. If they do good work at a reasonable price people may be willing to wait. Being blatantly dishonest is going to take them nowhere fast.
The one thing you can feel good about is that you're going to save a few guys some frustration and hard feelings.
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