Dave said it TIME IS MONEY. That is why we charge for every set up we do. A six color job will take how long to set up? When we started we did not charge as much for the reorder set up, then it turned into a customer ordering 5 shirts or even 1 shirt. Do the math on a 6 color print that you did not charge a set up fee for. We make money printing shirts, as long as shirts are falling off the belt I'm making money. We charge $20 per screen set up fee regardless of the order size. If you count all the time involved in the set up process and the cost of the tape, emulsion and other materials, $20 a screen charge does not turn a profit. I have two autos and run two shifts. We are busy most of the year. Ask my employees what my biggest grip is and they will tell you, down time kills my profit. Setting up prints equals down time. So if you choose to not charge reset up fees that's your decision, you will get to a point that it will bring you down and when you try to change the way you charge those loyal customers will leave. There is a printer in town that does not charge very much for their set ups and less for reset ups. They are a little cheaper than me on printing charges. The problem is their quality lacks. I'm not the cheapest in town, but I am the best in town. Not bragging but when my competitors bring me orders they cannot print and tell me they don't have the skills to print these types of prints it says something for your business.
If you explain the set up process to your customers they will understand and order enough shirts the first time or know that they will have to pay the set up fees the next go around. I don't worry about what my competitors are doing or what their charging, I offer the best quality and service at a competitive price. If a customer is loyal because of my prices he will leave because someone offered a lower price. If he is loyal because of quality he will leave if someone offers better quality. The same with service. I concentrate on quality and service, it has not failed me. If I'm going to go broke, I'm not going to do it working myself to death because I'm trying to be the lowest price in town.
Do what's best for you. What kind of reputation are you building, Best price, best quality or best service. We built ours on quality and service, I'm covered up with work. I've had customers leave for better prices just to come back for quality and service.
Good luck.