Yeah, the part about driving customers to competitors is real. I saw a tweet where someone said a fair rush fee actually builds trust because it sets clear boundaries.
But if a rush fee builds trust by setting clear rules, what happens when the rush job still has a problem? Does that extra charge make the customer more understanding when something goes wrong, or does it just make them twice as angry because they paid extra for a mess? I've seen guys charge 50% more only to have a part backordered, and then the client feels totally ripped off.
Last quarter we dropped rush fees to be more competitive. Our overtime pay and stress levels went through the roof for zero extra money. The shop down the street that undercuts everyone on price is known for using cheap, off-brand parts. You either charge for the real cost of a rush job or you slowly go broke working nights for free.