You charge extra for labor even if the the gears and install kit are new? In the case of new gears, it should be easy to verify that the parts are the correct ones just by looking at the box(es). Even if they're not new, if you guys are that experienced, you should be able to tell if the parts are "wrong" before the car even goes up on the lift, saving everyone involved time and money.
Regarding used parts, that's up to the customer, and maybe you shouldn't provide a warranty if they're using used parts, especially where gears are concerned.
I understand you guys have to charge for labor, and I'm not about argue about your typical hourly rate, but charging *extra* for labor simply because the customer brought his own parts seems over the top to me. If the parts are somehow defective, he's still going to have to pay you labor to swap them out again. As long as you warn him ahead of time that this is going to be the way it happens, you're in the green on the up-front meter.
I'm not gonna say your practices are a ripoff, but there are different ways to handle it that don't cost the customer more up front. Just sayin...