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Add-Ons Add Up
The Washington Post has a story about the proliferation of extra fees tacked on to just about every product or service under the sun. A couple of good insights make it worth the read.
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I had a conference in Vancouver in October. When I flew into Vancouver's airport I found out, much to my surprise, that I would have to pay 15 Canadian dollars just to leave the place (this fee not being included in my ticket). The airport authority called it an "Airport Improvement Tax". My only thought was, "I don't care what this airport looks like, I'm only going to be here a couple of hours".
Patriotism is the opium of the masses
My boss gets lots of complaints because we pass the 3% credit card charge on directly. Like somehow people who pay with cash or check should subsidize the credit industry.
I hate that sort of thing. It first really hit me when I got an unexpected $1 fee for using an ATM. Not the fee from the ATM's owner--a fee from MY OWN BANK for not using a preferred ATM network! After that I just came unglued (switched banks too).
In the end, I think it's all just part of the game. Most people are so jaded about "the value of service" anymore that the only way to sell something is with the lowest price. A lot of these fees serve no other function than to allow the price to represent the real value of whatever it is you're paying for. No longer do we live in an age where many aspects of the transaction are rolled into an "overhead account". Everything seems to be billed in excruciating detail!
While it largely makes sense, I long for the days when bills were simpler.
I think Mauve has the most RAM. --PHB (Dilbert Comic)
Traveled to Houston recently. my rental car charge was DOUBLED by taxes and extra fees... to the tune of around 400$ for the week.
I don't know what the hell they are building in Houston that justifies that level of extra tax and local fees, (airport tax, use tax, local tax, etc, etc).
That kind of nonsense kills me... "Oh, did I mention that a few additional charges and taxes are added... that'll be DOUBLE what you thought it would be! Thanks for doing business with us!"
Yeah, thanks... it was good for me too.
Even if a man chops off your hand with a sword, you still have two nice, sharp bones to stick in his eyes.
It definitely makes you think though. I noticed all the extra taxes and fees and such on my phone bill, but like the article says, I never paid a great deal of attention to them. Now I'm going to start shopping around and see what better deals I can get.
With other fees (car rentals fees, atm fees, airplane ticket fees), if you wanna use these services and opt out of these *cough*bullshit*cough* fees, you are SHIT OUT OF LUCK! :(
Join the TWIT army now!
It wasn't until I read the article and began to think about it. But there are so many cases, and not even in the industries mentioned in the article. The two examples that came to mind was first McDonald's were if heaven forbid you can't have a 20piece McNugget with 2 sauces they get you for a dime a piece for a extra sauce. And at the local university, if you want just a cup for water its a dime, unless your purchasing something. Its kind of amazing if you stop to look around and see how many places have little addon prices.
I put the m in oop.
While I am as tired of being nickled and dimed to death as the next person, this simply is not going to go away. The basic charge for a service does not necessarily reflect what the final charge to the customer will be. It almost never will, there are too many extras, options, and case by case variations (especially in the service industry). Sales tax is tacked on to every purchase in the US. You always have to remember that 8.25% (in Houston) will be added for state and city tax. But here in Germany the "rough" equivalent, VAT, is added before the price sticker is placed on. While that is more convenient to the customer, unless you have been paying attention, you never know how much is tax. The problem is not the extra charges, the problem is transparency and when "options" are mandatory.
-------------------------------END--COMMUNICATION
The local Cable co has been running an ad over and over for the past couple years that criticizes satelite companies for tacking on extra fees... One example is the extra monthly charge for a second reciever. Of course, they don't mind being blatanly hypocritical.
Their new Digital Cable package sounded a lot cheaper, but adding in the little extra charges that they include, I was paying even more per-month... I canceled on the spot.
Most people may not notice, but I notice, and I reject it on principal alone, not to mention that going with the seemingly more expensive options usually save you money in the end.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
you seem to be living in a different UK than me. I attempted to pay my BT bill at HSBC (THEIR FUCKING BANK!) and was told I'd need to pay a £5 fee for paying my bill; I attempted to pay my MBNA bill at the Royal Bank of Scotland (THEIR FUCKING BANK!) in CASH and was informed that I'd need to pay a £20 fee and that the payment "could take up to four days" to be registered on my account; I attempted to pay another credit card account £500 in cash over the counter at a nationwide branch only to be refused because "we don't have the facilities to deal with large amounts of cash at this branch". What?? A bank that can't deal with money? Fuck them all, I now bank with smile - and they haven't tried to fuck me over YET.
That was classic intercourse!
Adding the 3% to the bill if the customer is paying by credit card is a sure way to piss off the credit card company. They might even revoke your ability to accept credit cards.
I know of many restaurants in NY which rather than take the 3% loss on transactions (which at busy places can cost tens of thousands at the end of the year), have an ATM installed on site. Wanna pay by CC? Sure, go use the ATM. Now instead of losing 3% on the sale, the business gains $1.00 (other $1.00 goes to ATM vendor).
When I booked a trip to Florida last summer, my travel agent offered a special deal on a car rental (with Dollar). I could rent the car for a high daily rate, but there would be no extra surcharges, and that was guaranteed! I took one look at the list of possible surcharges and decided to go with the all-inclusive deal. Did I get a good price? I don't have a clue, probably not... but I paid no additional surprise fees to Dollar, the airport, or any additional taxes.
The article is dead-on: people are willing to pay for convenience.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
Fees like this particularly infuriate me. I am currently looking into other banks after first union(wachovia now?) decided to start charging 50 cents every time you pay with something with your atm card. This after they'd finally dropped their 1.00 fee in addition to the 1.50 you pay to atm owners for getting money at a damn 7-11. The article does make one good point though - companies that play their marketing off consumer frustration with fees can make a bundle. I recently stayed at a wyndham, the hotel chain listed in the article. It sounds stupid, but the fact that I signed up for a free program and now can count on free internet access, free ld phone calls (!), extra pillows, and a free (as in beer) beer whenever I walk into my room there will make me choose them over just about any other chain. Other hotels could take a big lesson from them, especially certain "luxury" hotels whose idea of "business services" is putting analog jacks on the sides of the phones so you can pay 10 bucks in service fees to check your email over dialup, and allowing you to receive faxes for a dollar. Give me broadband in the room and I'll stop bitching about how there's only 5 non-pay channels on the tv.
Now, think about this. More than the average. This statement would make most anyone who's had a class in basic statistics cringe, wouldn't it? What it REALLY means is that the top 50% of people (or, for those of you who have trouble with math, HALF of the travellers, give or take) are charged more because they are carrying the weight the makes the average in the first place. I got smacked with this each time I checked my SINGLE CARRY-ON when I went to Europe over the summer. They said it was "just too heavy", though it fit on my back and in the comparmtent above my seat.
Sorry, that "more than average" statement always gets me.
Here's another good one for you. I recently looked into buying some swimwear online, and the price was quite reasonable, even with the shitty exchange rate we have to put up with between $US and $CDN, (artificially set, IMHO, but that's another story...). The thing that completely turned me off buying them was this company's policy of shipments outside the US being sent by the likes of UPS or FedEx, who want a whopping $US 20 PER ITEM! This essentially doubled the price of the swimwear, and I let them know that I would not be paying this kind of extortion to ship a 200 gram piece of clothing up here, and what the hell's wrong with shipping by post anyway? They gave me some lame excuse about packages being insured...insurance is certainly available up here at Canada Post, up to $100 value costs all of a buck!
This isn't the only place online that I have encountered this. Online firms should really take this sort of thing into account when they wonder why they don't get much business from outside the US.
My mother in law was in Mexico on a tiny little island, and as the plane was about to take off, the military and police stopped it for not having the official duties paid, this amounted to going seat to seat and getting 15 USD for every person. Needless to say they all had the cash to pay, but never told a soul that there was an issue about it until the plane was ready to take off. No one ever saw one official document. Hmmmm...
*Cough*. B-S. *Cough*.
My boss, who worked for CNN for decades was recently in Mexico, and he just keeps a wad of cash with him when he pulls out his news camera to work down there. I'd say about 1/3 of the people that I have talked to about Mexico have been shaken down by the police because they are foreign.
Needless to say, I went to Mexico. Great place. Same place as the relatives. No plane fee for me leaving. Surprise. But you can bank it that I had at least 50 USD for me and my wife when we got on the plane.
After all, in Mexico policing is a for profit business. You should assume like I do that the police are massively crooked whenever you go to a foreign nation, and be surprised when they are not.
Option 1: Take ISDN phone at half price if you pay full price for DSL
Option 2: Take DSL at half price and pay full price for ISDN phone
Option 3: Pay full price for DSL
Option 4: Pay full price for ISDN phone
and hey since it's half price save 70 euros on the DSL modem...right....
NOT...when you look at the prices you realise that the ISDN phone and the DSL modem cost just about the same!
Reminds me of what my university group did in reply to a government proposal several years ago. They barred access to the canteen and wrote this on a board outside:
To go to the canteen you have these options:
Go from the back door
Go from the door next to the poet's statue
Go from the door next to the ATM machine
and yes all three options referred to the same door!
Lies, damn lies and special offers
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For the friendly folks in the Canadian government, September 11th 2001 was a good excuse to come up with another add-on: a security fee of $24 on a round trip. A lot more than it is in the U.S.A. Note that this was not called a tax. Why not? you may wonder. Simple: you can't charge GST @7% on a tax, but you can charge GST on a fee/levy. I feel so much safer now!! Not...
Mark
I kind of assumed in USA *everything* was a "for profit business".
Certainly US-slashdot posters often indicate a preference for no government unless avoidable, no taxes where possible, etc. I read this as one of the messages from the original article, that local authorities were collecting income from people through indirect taxation rather than direct taxation.
Maybe things just cost money, and paying for them ultimately comes down to each of us, but it simply boils down to how the organisations get the money out of us.
(BTW I find your assumption that "police are massively crooked whenever you go to a foreign nation", i.e. the whole world is crooked apart from the USA, naive and xenophobic to say the least. Some of your police hardly have an international reputation for integrity).
If you buy your ticket AT THE BOX OFFICE at the front door of the venue at the time of the event?
You guessed it. You pay a convenience fee.
Makes you wonder about scalpers. When they go to arrest one, could they present the argument that the exta $100 they charge for a $30 ticket is just a convenience fee?
My question, how does Visahave a right to determine what retailers charge their customers.
Can you say "oligopoly", boys and girls? Just like a monopoly, but instead of having just one company controlling everything, there's two or three, and they all set the same fees and policies and don't actively compete against each other.
You'll never hear an advertisement that Visa is better than Mastercard - just better than American Express. You'll never hear an advertisement that Mastercard is better than Visa either. In fact, I don't really remember Discover ads mentioning either Visa or Mastercard. Hmmm.
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Sigmentation fault - core dumped
r2ravens: "Points have always pissed me off. Points are extortion charged by the lender to convince them to make you a loan - even if you have good credit. Another little advantage to this scheme is that they are the equivalent of interest charged up front. Each point is equal to 1/8 of a percent of interest on the loan amount, and it's paid up front."
Ahhhh, points are nothin' compared to the REAL extortion by home-mortgage lenders: the so-called PMI -- "Private Mortgage Insurance." Get this: if your down payment is less than (typically) 20% of the mortgage amount, the lender requires YOU (the borrower) to pay the premiums for insurance indemnifying THEM (the lender) if you fail to pay them.
Such a racket. The PMI payment on my mortgage is about the same as my principal payment (the loan interest, of course, is much much more). So, think how much faster you could pay off the loan if you weren't paying the PMI.
Now, the thing is, typically, you're not required to carry PMI if your equity in the house is greater than 20% of the loan principal. The thing is that YOU (the borrower) need to keep track of how much principal you've paid (your statements give you the details), and when you've reached that threshold, you should contact the lender and demand that you shouldn't have to pay for PMI. Also, if you get your house re-assessed, you may discover that the equity in your house is greater than it was due to market conditions, and you can use that info to demand the end of PMI payments.
The sick thing is that the mortgage lenders seem to think that they're doing you a favor. See here, for example. They know that it's almost impossible to save up for a 20% downpayment on a typical $200K (yikes!) house in today's overpriced rental market, so it's an effective way for them to screw you.
And "since there is only so much space and weight an aircraft can accommodate," there's "an additional fee for passengers who require more than the average."
This is bullshit. What they should say is that it's more costly to offer the same level of service/guarantee that they offer with a paper ticket -- which they don't.
There's a lot more to the ticket fee issue than meets the eye. The public is aware of it, and it's why they still insist on paper tickets. What's the deal? Well, if you read the fine print, you'll see that an electronic ticket is a completely different class of ticket. It's a different contract. Basically, they have the right to bump you first if the plane is overbooked, or even if someone shows up at the last minute and is willing to pay full pop. With an electronic ticket, you're the low man on the totem pole. Of course airlines are pushing these, because it gives them carte blanche to do what they want with you, overbook flights, etc. Some e-tickets even have fine print about not being responsible for delivering checked luggage, etc.
Be really careful with e-tickets. Read the fine print. I do, and I've always found it well worth it to pay the difference, and even to wait in line.