I called up comcast/xfinity to get internet service. They asked me if I'd like to add on basic cable for $10/month. I don't watch much TV, but I figured for $10/month I'd be willing to do it for the occasional live event. So I agreed to it on top of the $40/month internet. I figured I'll be paying $55ish/month when you factor the taxes I'll be paying to Uncle Sam. After 20 minutes on the phone, we get to the final payment authorization. "Do you authorize me to charge your credit card $68/month?" I asked why so much higher than the $40 + $10 amount?
Apparently, there was an $11 "content delivery fee" for the TV. As if buying the cable channels and having them "delivered" to my home are different freaking things. As if you can buy the rights to watch cable at the comcast store, but if you want it at home, you gotta pay an extra $11.
These companies are going to whine and scream about these changes, but they really brought this on themselves.
> These companies are going to whine and scream about these changes, but they really brought this on themselves.
Yeah, as the article said, one guy states that they'll just push the cost to other consumers - but this isn't cost, it's ridiculous profit margins.
The problem isn't so much the price that they charge people, it's that they cannot substantiate these costs - they're extra profit, pure and simple.
But this is a thing ingrained in US culture, charging additional fees on top of the base fee for anything - I'm thinking of tipping culture as well, which evolved from a "I really appreciate what you did" thank-you, to a "We don't pay our staff enough so we expect you to pay us extra to compensate". Shameful. I'm glad the US seems to have a resurgence of unions and people are standing up to it.
> but this isn't cost, it's ridiculous profit margins
Profit margins are a different discussion. If you charge me $20 for a cookie or you charge me $15 + a $5 baking fee, your profit margins are the same. We can argue either way that they are ridiculous. But you shouldn't be able to advertise that you sell $15 cookies if there's no way to buy them for $15.
That’s why I don’t tip at coffee shops - if my espresso is $4, and it doesn’t include your labor, then what does it include? Coffee beans and water cost like .25
Another trick is price changes by some popularity metric. Advertise 15 dollar cookies, but only charge 15 if it is after 6pm and the cookies are cold. Peak hours? That’ll be $25.
Assuming the company's main product is a hot cookie, then I take issue with this particular example, because a cold cookie is really a different product. But in general, I have no issue with peak pricing. I'm okay with you advertising a low price if it's something that a reasonable person might be able to take advantage of (e.g., I'm not okay with you advertising $15 cookies if that price only applies between 1:48 and 1:52 AM).
They're already pushing the cost to consumers! They just shouldn't be able to lie about prices. Which you'd think consumer protection and truth-in-advertising laws would already cover, but evidently not.
Other countries even have laws mandating that prices posted in stores include tax. Of course, if you suggest such a mandate in the US, you'll hear a well rehearsed litany of excuses about why it isn't possible.
Most of this junk fee stuff is about pricing transparency and the way it complicates consumer comparisons; the bottom line is going to stay the same.
I have some sympathy with businesses that want to break out government surcharges into a separate line item; but as the article indicates most stuff isn't in that category.
"Regulatory compliance" isn't a government surcharge, though. It'd be like tacking on a "paying our employees" fee. It's part of their costs of doing business; factor it into the price.
I don't mind if the bottom lines stay the same. Right now, I can't compare bottom lines, because the real bottom line is hidden. Is the $50/night hotel cheaper than the $100/night one? No one knows, unless they spend the time to get all the way to the final booking step on both (or more realistically, dozens of) options.
>"Regulatory compliance" isn't a government surcharge
Sure; but the 911 fee is, as is the local utility user fee and the public and educational broadcasting fee; and (to be clear) I am saying that I don't mind them being broken out for billing purposes - the only reason they're not when advertising is because of the race-to-the-bottom on pricing transparency.
If I can't opt-out of the 911 fee, it's part of the price. It should be included in the price they advertise to me. The last time I modified my cell phone plan, the representative admitted they couldn't tell me what the resulting new cost would be. That's insane.
My bill includes a "Administrative Fee", "Federal Universal Service Charge", "Regulatory Cost Recovery Charge", "State Telecommunications Excise Surcharge", "County Public Safety Communications Surcharge", and "State Public Safety Communications Surcharge", plus several taxes.
>If I can't opt-out of the 911 fee, it's part of the price. It should be included in the price they advertise to me.
Hmm, I actually agree with you, but that would be raising the bar above where it is for normal pricing practice elsewhere in the U.S. e.g. shelf and menu prices exclude sales tax. In fact, for digitally-delivered services or goods that ship across state lines, it's impossible to know the final price unless you know the state (and, indeed, county and sometimes city) to which it's going to be delivered.
At least the mandatory fees apply across the board which means you can still price shop somewhat accurately. The completely made up corporate fees like “resort fees” are just a way to obscure the actual price. I think that’s probably stating it too nicely. It’s a way to advertise an artificially deflated price that’s impossible for any customer to actual pay. It’s deceptive. Intentionally.
In Germany the price you see is the price you pay. It's set in law. This includes taxes and any other fees they might want to add. If someone tried to add random fees like AirBnB does in the US, you would not have to pay them.
Pretty much, yes. If the fees are visible up front, there's no point in making them fees, they're just part of the price. By making them fees, they can be hidden until you've already made your choice and are about to pay, or hidden until some point in the future where you try to do something like stop using the service.
The problem isn't really the cost, it's the deception. It tricks consumers and prevents an efficient market for goods and services, and as the article states, creates a particularly bad experience for at least some consumers that the business can justify in the name of profit.
The problem isn't the deception. I'm sure they would argue that you see the fee before you agree. The real problem is that fees are much more difficult to price-shop. Fees are anticompetitive.
The dark patterns that make it very difficult to price shop are inherently an attempt at deception. They're deceiving you into choosing an option that's more expensive than it initially appears.
If everyone knew this was happening, they would spend more time trying to avoid falling prey to it. Nobody is paying an extra fifty bucks because they don't want to spend the extra twenty minutes. But if every consumer knew this, it wouldn't be deception, it would be friction. And companies would eventually stop doing it to make their service more appealing.
Yes, but the US Regulators have been "captured" by some of these monopolistic industries, to the point that the monopolies can do these things w/o worrying about laws against them:
"captured" is one way of saying they benefit from it themselves - direct payment (read: corruption), stocks, 'campaign donations', etc. Plenty of ways for politicians to get kickbacks from various industries without it being obvious or direct.
AirBnB is in a completely different league of shady fees.
As a consumer it’s hard to differentiate junk fees from mandatory fees imposed by federal, state, county, municipalities fees. As an example I pay different sales taxes for the same internet plan in 2 different states. Another example is my cellphone plan was slightly higher in another city/county than my current residence due to different E911 fees. The difference is usually cents to a dollar.
You'll pay a different price for the same cup of branded coffee in the Atlanta airport depending on which concourse you're in due to the airport crossing over the line between counties with different sales tax rates. Other than on a few select items like gasoline, there is no national sales tax (and I'm guessing that the federal tax on gasoline is classified as something other than sales tax), so yes, this makes it impossible to post a tax included price in any mass media type communication. But when advertising on the individual level where the location of the transaction is known, they can determine the taxes and fees ahead of time.
If you can’t know the price, you don’t display a wrong price, simple.
You either geo-locate, or maybe put the minimum E911?
In EU these kind of sheenings never happen.
Airplane sites tried with payment fees, adding 40/50€ for ALL providers. EU changed the law that the price has to include the fee for at least 1 payment…
So if the cheapest is paypal at 30€, they have to add 30€ to the price.
Maybe because it's more fragmented in terms of language/culture, so you don't have ad campaigns that span both ends of the continent? The wider prevalence of unitary governments (as opposed to federal systems) also help.
So I'm in Santa Fe, and I see an ad for internet service. But I live in Rio Rancho (50 miles/80km away). The E911 fee is different in both counties. Geo-locating isn't going to help.
I'm not sure how that works in Germany, but these fees are "seen". It's not like you're not legally agreeing to them. The trouble is they're only seen when you're, say, at the last screen of checking out. How do they avoid that in Germany?
> The trouble is they're only seen when you're, say, at the last screen of checking out. How do they avoid that in Germany?
If they're adding a surcharge for something you would reasonably expect to be included in the offering which they advertised at a lower price, it would be false advertising.
You'd at least run afoul of the act against unfair competition:
> A commercial practice is regarded as misleading if it contains false statements or other information suited to deception regarding the following circumstances: [..] 2. the reason for the purchase, such as the existence of a specific price advantage, the price or the manner in which the price is calculated [..]
> The following are also regarded as an omission of information: 1. the hiding of material information, 2. the provision of material information in an unclear, unintelligible or ambiguous manner, 3. the provision of material information in an untimely manner.
> I had the Preisangabengesetz in mind, which is a separate text specifically about listing prices with all taxes and fees included.
That's not what it says though. It merely empowers the BMWK - with agreement of the federal assembly - to decide in which manner prices of consumer goods are be provided and calculated. They then may decide that prices of airline tickets have to be listed a certain way.
It also empowers the BMWK to pretty much turn businesses upside down to make sure they're following these rules.
That's pretty much all it says. It's a really short law of just two paragraphs (used to be three, but one got removed).
By showing them straight away - it's not like it's a difficult concept tbh. And it's enforced by regulations and fines if they are not adhered to. Again, nothing overly complicated there.
A part from taxes, that's almost exactly how it works in Canada. You won't usually see fees just added after you sign up without your consent, especially if you have a contract. Airbnb does not add fees after the booking, IIRC (at least it never happened to me, and I'm a heavy user). You have a price breakdown and a total, including all the obnoxious cleaning fees, before you even get to the payment page.
(Unless you damaged something or trashed the place)
It at least makes sense to unbundle cleaning from per-night charges: cleaning isn’t per-night. How does this work in Germany? Do you see a listing like “€100 per night + €40” or “€140 + €100 per additional night”?
I would love either of these in the US — both would be massive improvements over “you thought it was $100/night until you clicked a couple times and found the $40”.
Don’t you have to set the dates anyway?
If you search for 1 night you get 140$ price.
For 2 nights, 240$, 120$ per night. Etc…
There is usually A/B testing of total vs. per night.
But the most important thing:
Price on the first page you see is the same that gonna be charged.
Same thing for flight bookings, what you see on the search is what you pay!
> If someone tried to add random fees like AirBnB does in the US, you would not have to pay them.
Airbnb adds fees that goes to airbnb ( vs the host). How does that look in germany, its added to the price host sets. Host sees a different price/night on the listing than what she set ?
also, Airbnb lets you see cleaning price in the listing, so its not a hidden fee.
Not sure how it looks in the US, but [1] is how a typical AirBnB listing looks on the German website. Right on the listing it just has line items for the nightly cost, cleaning fee, service fee, taxes, and a total (though this is an Italian place, AirBnB listings for places in Germany typically only charge price per day and service fee).
The price that's advertised in the overview includes all fees, so you can't appear more attractive by shifting costs to the cleaning fee.
> Airbnb adds fees that goes to airbnb ( vs the host). How does that look in germany, its added to the price host sets. Host sees a different price/night on the listing than what she set ?
Australia makes them put that in the price. It's why using the Australian AirBnB site to find an AirBnB is so much nicer.
> also, Airbnb lets you see cleaning price in the listing, so its not a hidden fee.
They make it hard to compare listings based on total price, though. Which is especially bullshit when a bunch of listings are clearly using the cleaning fee to boost profit, not to cover cleaning.
In Germany it's listed as part of the price on every page. There's no bait and switch as you click through. It's always possible to pay the price you initially see.
But it is not taken into account when sorting by lowest price, so you see egregious tricks like "$50/night" AirBnB rooms with a $200 cleaning fee.
Hotels do the same thing on HotelTonight. When the amount of the resort fee/cleaning fee ends up doubling the price, that's just dishonesty - even if the truth does eventually come out.
How about making it compulsory to accept legal tender for events /races and other things? How many times do you sign up to run a race and are forced to purchase through vendors like "Event Dog" or other where paying cash is not even an option. And these companies always tack on up to 10$ "convenience fees" that are unavoidable. In places like Canada where currency is legal tender you can avoid these scummy vendors by paying the merchant cash directly
I think the sentiment is understandable if the terminology isn't precise. Don't charge fees for non-optional things. Especially don't charge a fee to pay the posted price.
I missed that this happened, that's great news. When I saw a few places get away with no longer accepting cash "for the convenience of our customers and the security of our staff," I figured that it was only a matter of time until everywhere else that wasn't doing light tax fraud followed suit.
Tangentially, I'm also pleasantly surprised how easy it still is to buy a physical MetroCard. My understanding a few years back was that contactless payment would be the default by now and if I wanted to buy a physical MetroCard, I'd no longer be able to do that at stations but I would instead need to go to "select retail partners" to do so.
As a guy who used to have to take a zipper bag full of cash to the office safe every night, the convenience of the customer part may be laughable but the safety of the staff part isn't. Offhand I can't think of a more effective way to bring back 1990s mugging culture.
There's a difference between the letter of the law and the word of the law. Having experienced both places I can say there is a difference in how things are run and regulated and if they call it legal tender or whatever it doesn't matter. As a customer it does matter because I end up paying the junk fees so please don't patronize me for saying it.
My county government got in bed with InvoiceCloud and prominently offers the payment option that includes a service fee when paying my property taxes. (The service fee for last half was ~$350.) It's still possible to pay via fee-less bank transfer for now, but the website says in the future I'll need to pay in person by check to avoid fees. This is instead of the original method of receiving paper property bills and sending a check in return.
The website was designed by contractors paid for by tax dollars unassociated with InvoiceCloud.
These are similar problems - billing and payment can be difficult problems due to the way the industry operates. But the trend towards making it more inconvenient (or in some cases, impossible) to pay by any other means that does not include a price gouging service fee is not adding value for consumers.
I hate fees as much as the next guy, if not more. But this doesn’t seem like it’s in the same ballpark:
> We’ll make cable internet and cellphone companies stop charging you up to $200 or more when you decide to switch to another provider.
If your cell provider gives you a subsidized phone and puts you on a contract that has an early termination fee, that seems fair.
If cable companies are doing this sort of thing, then it would be more of an issue since they don’t provide expensive equipment that the customer keeps. But I mostly hear about cell providers doing this.
A cellphone early termination fee tied to the discount provided on on a phone is one thing, but a 200$ fee on month 23 of a 24 month contract does not.
The problem is that there are two separate types of regulation here, as the article alludes to (it admits that the airline seat thing is just a random subsidy).
Resort fees and concert ticketing fees have the problem that you can never figure out what the prices of things are until you get through checkout (or sometimes even later!). Requiring early disclosure of those so consumers can make informed decisions is an easy sell.
Random market distortions, like "no more ETFs on telecommunications plans" and "you can't charge for seats on the airplane if a child is involved", need a little more analysis.
But by bundling these two things together, the whole initiative feels deceptive. "Here's a clear good along with some murky stuff, but the whole thing is good because we at least proposed the clearly good stuff!"
In a lot of cases it's to discourage people from switching providers. It exists in my country (NL) for e.g. energy companies - we have a fairly competitive market. People have to pay €125 if they want to break their contract (which is usually in 1, 2 or 3 year periods, sometimes 5).
However, especially with the energy prices having gone up, the energy companies have just offered to pay this fine outright if someone wants to switch to them.
I'd be very happy to see this. Apparently if you change your currency on AirBnB to Australian dollars, you see the actual price, inclusive of fees, because that's legally required there. (As is showing the after-tax price on things like restaurant menus.)
My understanding is that they are rolling this out to the US this year also - too many US hosts were starting to do the low base cost plus bazillion fees thing and it's causing frustration.
Now if they can just do something about all the hosts that want me to take out the garbage, sweep/vacuum the floor, clean the dishes, wash the linens, tear down the beds - then then charge a cleaning fee on top of all that. I just spent half a day of my vacation cleaning your house, AND you want me to pay you a cleaning fee?
It makes a compelling argument to just go to a hotel, which are regulated, where you're not expected to clean up yourself, and where there are no (or less) hidden fees. Price-wise they have become competitive with airbnb - mainly because of the issues mentioned of e.g. separate cleaning feeas.
The article quotes Republican adviser George Callas arguing that this would be bad economics because it won't eliminate costs, just shift them to the primary price of the services in question.
I disagree. Shifting the costs to the primary price is good economics because it enables consumers to comparison-shop based on price and leads to a more competitive market. That's what companies are trying to hack with hidden fees.
We just need an across the board price transparency law. You should know exactly what you’re going to pay before you agree to any services. It shouldn’t be that hard.
Following in the example of the Airlines I think it should be universally required to disclose all fees up front so that you can do a proper comparison - too frequently you don't receive those numbers until the very last step. Like rental cars that are $0.01/day plus $150 in fees, or GrubHub vendors that have service fees exceeding the costs of an entree. One of the things I like about Amazon is that they provide a total cost when comparing buying options from their marketplace.
Hotels say these are for things like wifi or bottled water in your room etc. that might have been separate charges in the past but are now being bundled into a single fee "for your convenience", which is fine, but if it's not optional then it's just part of your room rate now, right?
Resort fees are becoming common, and they're very different from a tax. They're just a way of hiding the true price of the room. https://en.wikipedia.org/wiki/Resort_fee
The Feds wouldn't really be banning the fee, they'd be banning hiding it in the last checkout step.
They can regulate them, but it's not really about that they exist, it's that they are hidden and/or obfuscated until the last moment, or even until after the customer finalized the contract already.
Prices on e.g. hotel websites should be listed with all fees and taxes included.
Yeah. For instance, let's talk about the $29 I paid to American Airlines recently for "priority boarding," before I found out the flight was less than 1/3 full. I got what was offered, but I got no actual value out of it. AA essentially scammed me out of $29, because I never would have taken the offer had I known there were so few people on the flight.
Edit to add: they made me this offer at the airport kiosk, immediately before my flight boarded. They knew it wasn't anywhere near full.
The fees described in the article aren't optional; resort fees, ticketing fees, etc. tend to be mandatory. They're fundamentally part of the price, but not part of the price shown.
An optional fee for priority boarding is very different. (I don't understand the folks who want to rush onto the plane to sit in a less comfortable seat, but that's a different issue entirely.)
Priority boarding offers a slight bit of insurance against the possibility of the plane running out of overhead compartment space.
The post you're responding to is essentially a complaint that they purchased insurance (at a known negative expected value) and didn't see a payout. Which on its face is ridiculous.
Priority boarding is useful if you want to avoid having your bag checked and being separated from it. (Pretty much guaranteed to happen if the flight is nearly full.)
It doesn’t happen often but checked bags can get lost. Also, waiting 10~15 minutes to pick up your bag can be annoying after a long flight.
The a la carte add-ons American offers are never worth it IMO. There are nine boarding groups and buying the priority boarding doesn't put you in group one, it puts you in (iirc) group four, which means while you will definitely find a place for overhead luggage, you also still need to stand around while everyone starts crowding the main boarding lane as groups 1-3 are called to board and play the "excuse me, are you group X? excuse me, are you group X?" sorting game. The upgrades to first class, main cabin extra, and preferred seating never really become better priced either, even if the flight is empty. Especially do not do the "$80 for 800 more AAdvantage miles" options they give you, which (again, iirc) over-value the miles by 5-10x.
If you fly American a lot, the branded credit card is the way to go. Not sure if the same is true for the other carriers, but I'd suspect it is. Even with the most basic economy ticket you get most of these optional add-ons (one checked bag, better boarding position, select your seats) as a cardholder. Credit card spend also counts towards status qualification for AA now, so CC spend can get you across the line to gold status if you might not have made it otherwise, and at that point you'll start to get upgrades to business/first on flights where everybody on the plane doesn't also have status. That will put you in boarding group 1, which, hey, mission accomplished and you didn't even need to spend $29 at the kiosk :).
Sure it is. They get these stats wrong all the time; it's why they have to pay $600 for a couple volunteers to take a later flight because they've overbooked and got the estimation wrong.
Stats don't lend themselves to perfect predictions.
I doubt that's a case of getting it wrong so much as calculating the acceptable rate of compensation paid in order to maximize profits.
Most of the time, there's somebody who's happy to have the free travel. I've done it and the compensation was approximately one free transatlantic round trip in exchange for spending the night in an airport hotel. The cost to the airline is, of course not the face value of the voucher.
You wanted to board before the other passengers, you got to board before the other passengers. You got what you paid for, and it was entirely optional. That's nothing like the mandatory fees from the article.
No, in fact, I did not truly get what I wanted. I got bumped into the next higher group, which had literally no effect on anything.
To put a finer point on it, I wanted to get some value out of my $29. I got none. If I said "Hey, give me $29. I'm not gonna give you anything, I just want $29," would you give it to me? Transactions in capitalism are supposed to be voluntary, mutually beneficial exchanges. What benefit did I get? AA exploited an information asymmetry to scam me out of $29.
Bullshit. If the flight were full, as per usual, then yes, I would agree. Under normal circumstances, I could evaluate this offer and decide that yes, it was worthwhile.
But, here, they clearly exploited an information asymmetry to make me a zero value offer, knowing there was some probability I'd accept. Caveat emptor only applies when you have some way to evaluate or vet the offer in advance. With the hidden information that was kept from me, I was robbed of such opportunity.
You paid to board in group X rather than group Y (for some value of X < Y). You got that, although it sounds like group X and group Y were boarded together.
Would you be complaining if the entire flight was full of people in group Z (for some value of Z < X)? Or if you'd bought a day-of-travel upgrade when you would've gotten a complimentary upgrade with your frequent-flyer status? Or if you'd paid extra to select a seat at booking when the seat you wanted turned out to be open at check-in time? Or if you paid to change your flight rather than wait on free same-day stand-by?
For all you, or the checkin agent, know there could've been irregular ops that moved the entire passenger complement from another flight to yours after you checked in. Unlikely, but it happens.
If you're really that worried about, write the airline and complain. They may give you a refund or some free miles or something. However, you got exactly what you paid for and entered willing into the transaction.
And, to be clear, literally the entire business of airlines (which is yield management) is based on asymmetry of knowledge between between travelers and carriers.
Eh; if you can choose not to buy the modem, then go ahead and do that if you're willing to configure it yourself - not having to do that might be good value for some.
Forcing you to buy the modem on an over-priced installment plan is obviously not OK.
Xfinity charges $15/mo, IIRC. But if you supply your own modem they’ll blame it whenever there’s a service problem. So using theirs has one benefit, which is they have no one else to blame.
I am on Xfinity and have been using my own modem for 7 years now.
Internet went out randomly a few weeks ago. Their online assistant tried to ping my modem and failed, they sent a tech out and fixed the line and were on their way.
It sucked being without internet for a couple of days, but it was also kind of nice.
The cleaning fee on AirBnB is actually one that has some logic to it. A property needs to be cleaned after each guest, regardless of whether you use it for one night or ten. The owner pays for it to be cleaned either way and it makes sense that this would get passed on to the customer. What needs to go is the "service fee" which is AirBnB's cut of the total. This is usually a fixed percentage and should just be counted as part of the price if I filter for places less than $X a night.
Yes, the place has to be cleaned, but there isnt any reason at all it needs to exist as a separate fee. Just roll it into the price. It isn't negotiable, therefore it is the price.
> The cleaning fee on AirBnB is actually one that has some logic to it.
Yes, but a common phenomenon lately is you arrive and not only is there a significant cleaning fee, but there's a list of chores on the "house rules" you're required to do before leaving that should be part of that cleaning fee.
People have occasionally been asked to mow the lawn.
usually they tack on couple of hundred dollars on top of the price. The per night price is usually slightly cheaper than hotels but with the cleaning fees, the total usually comes out to higher than what a stay at a hotel would cost. AirBnB used to be a cheaper alternative to hotel but not anymore.
Apparently, there was an $11 "content delivery fee" for the TV. As if buying the cable channels and having them "delivered" to my home are different freaking things. As if you can buy the rights to watch cable at the comcast store, but if you want it at home, you gotta pay an extra $11.
These companies are going to whine and scream about these changes, but they really brought this on themselves.