9 ms·
Ending Junk Fees, the Most Annoying Thing in American Commerce
- gruez 3y ago>Junk fees are the flip side of consolidation, because they force prices up across the board by breaking the very structure of a market and forcing even honest actors into cheating. What does "consolidation" have to do with this? A few sentences later the author brings up how consumers are using price comparison sites to choose between multiple vendors, which seems like the exact opposite of consolidation? >Typically, consumers will buy tickets or hotel rooms based on price comparison sites, which show a list price.
- lokar 3y agoI think they mean “aggregation “ ?
- rubyn00bie 3y agoConsolidation means there are only a few possible vendors. It looks like we have choice but we don’t. Comparing between Vacasa and AirBnB isn’t really a comparison when both are directly encouraged to hide fees until you’re ready to checkout. So you spend time comparing options only to realize the one you’ve chosen has +30% per day cleaning fee. Now you’re unable to even appropriately cross compare results because of the hidden fee structure. I used Vacasa and AirBnB mostly as an example, but cable companies and telecoms are worse in that you don’t know about the bullshit fees (and anything that is labeled as a fee is bullshit) until you’ve signed up. Additionally, they can add fees at will; which, I can’t believe is at all legal. Tacking on any fee labeled or not should be illegal unless I directly consented to it.
- metadat 3y agoRelated discussion 6 days ago for California (whereas TFA is federal): Bill to ban hidden fees in California signed into law (oag.ca.gov) https://news.ycombinator.com/item?id=37817112 https://news.ycombinator.com/item?id=37817112 - Oct 2023 (463 comments) Also discussed at the time when the California bill was first introduced 8 months ago: California AG and state senators introduce bill to ban hidden fees (oag.ca.gov) https://news.ycombinator.com/item?id=34870752 https://news.ycombinator.com/item?id=34870752 - March 2023 (377 comments) Edit: Thank you @apsec112 for the correction. I've amended this comment accordingly. Cheers!
- apsec112 3y agoThat was California only, this is federal
- wodenokoto 3y agoI don’t live in the states, but I think it is weird that hotels are allowed to advertise rates before VAT, unlike basically any other business. And it just seems like a common thing globally that hotel and event tickets are allowed to advertise wrong prices. Why do they tend to get a free pass?
- lokar 3y agoIMO part of it is anti-gov libertarians who want any tax to be as painful and annoying as possible.
- Eumenes 3y agoThis is an interesting take ... libertarians are responsible for hotels not including VAT in their totals? Hmm
- lokar 3y agoCertainly US republicans want to make people angry about taxes
- Eumenes 3y agoParent comment was talking about VAT taxes in the EU and you're harping on libertarians and republicans in the US? Strange
- lokar 3y agoI generally assume when people say VAT in a general context they also mean sales tax (and the reverse)
- balls187 3y agoI read the original comment as it didn’t make sense that prices in the US aren’t inclusive of taxes. It’s less about harping on political ideologies and instead provided rationale as to why US prices aren’t transparent. The commenter who brought up Sales tax variations is partially correct, and the lack of political will to adopt a progressive consumption tax is also partially to blame.
- Eumenes 3y agoI haven't experienced the examples provided in the articles except at restaurants (kitchen fees) where I won't return ever again. I reduced the 20% tip to 15% because of that. Sorry. My local municipality charges 5% to use a credit card to pay for automobile or property taxes. Insane. Its not just the US either. Went to Italy on a biz trip recently, and to my surprise, I was forced to pay a daily tax for every night of hotel stay, which had to be paid for in cash.
- FFP999 3y ago> I was forced to pay a daily tax for every night of hotel stay, which had to be paid for in cash. "I also thought it was weird that I had to pay this tax directly to the desk clerk, and we had to meet in a bar down the street for me to hand it over."
- throwaway167 3y agoKitchen fee? A fee for the restaurant to cook something?
- morsch 3y agoI had to Google it, too. https://pos.toasttab.com/blog/on-the-line/kitchen-appreciation-fees https://pos.toasttab.com/blog/on-the-line/kitchen-appreciati...
- bradleyjg 3y agoMy local municipality charges 5% to use a credit card to pay for automobile or property taxes. 5% is high, but so long as it is disclosed up front I don’t have a problem with this one. A merchant is entitled to demand a certain amount of money for what he’s selling, not 97% of that amount and then you and the credit card company split the other 3%.
- Eumenes 3y agoIts disclosed, indeed, but the problem is why is it so high? I can't recall the last time I've ever seen a payment processor so high outside of tax/government paid services.
- eiopa 3y agoIn San Francisco restaurants, I’ve seen this tactic applied liberally. Maybe AirBnb and DoorDash are rubbing off on them:) A common one sees the restaurant charge you separately for the employee health benefits, cynically marketing it to consumers as “healthy SF” and “SF health mandate”. What’s sort of fun is that like cryptocurrencies, you can always materialize new ones out of thin air. One popular establishment demands that you pay a separate “carbon offset fee”.
- workingdog 3y ago"In January 2008, the voter-approved San Francisco Health Care Ordinance went into effect, requiring any business with more than 20 employees to set aside money for their workers' health care." It's ok for business to tell their customers why prices are increasing via line item.
- c22 3y agoNo it isn't. The cost of my widget isn't broken out to material sourcing, transportation, and other overhead. Doing it this way causes unnecessary mental gymnastics and is done for the sole purpose of creating political pressure. I don't mind companies having and sharing political opinions, but keep it off my receipt. Just put up a sign that says "prices have increased due to new regulation" and feel free to hand out pamphlets decrying the state of things, don't be disingenuous about your motives.
- ryandrake 3y agoExactly. If the SF restaurants OP mentions are not also itemizing all their other taxes and expenses on their customers' bills, yet singling out the “SF health mandate” one, it's pretty clear that they are just using those bills to make a passive aggressive political complaint. Nobody cries and moans publicly in front of customers when their business license fees rise 5% or when the cost of their utilities go up, but suddenly when there is a mandate to make their employees' lives marginally better, they weep their crocodile tears all over the customers' checks.
- 3y ago
- jimbob45 3y agoI care less about this with one-off businesses (hotels, restaurants, post) but doing this with rent at apartments seems like they’re duping people into paying more than the advertised rate. It genuinely seems like fraud.
- gs17 3y agoYeah, an apartment I looked at told us there would be an extra $100 for utilities, then an extra $30 for trash, then an extra $100 community fee... If they're mandatory, fixed expenses, those need to be part of the rent and listed up front.
- dboreham 3y agoNever going to happen. The culture has a scammy undercurrent that ultimately thwarts all efforts towards fair civilized behavior in commerce.
- RecycledEle 3y agoWe don't need laws against junk fees. Undisclosed fees are fraud. We need litigation and prosecution over fraud.
- losteric 3y agoWhat would you consider credit card fees? Those are variable hidden costs that are passed on to all customers of that establishment - including cash payers.
- SOLAR_FIELDS 3y agoI would like credit card fees to be prominently displayed on POS at checkout with the option to opt out by using debit be very obvious. Perhaps two prices, one Total with Cash/Debit and another Total with Credit. It’s kind of the opposite situation of the OP in that it’s priced in everywhere in the total advertised price so it’s not fraud in the same way, but it’s still an issue that’s related but tangential
- balls187 3y agoWhat makes a fee undisclosed? If a restaurant raises food prices by 10% to pay for healthcare, is that an undisclosed fee?
- ForkMeOnTinder 3y agoIf they list their real raised prices on the menu, it is not undisclosed. If they expect customers to magically know about the extra fee ahead of time, and add it to the bill after the meal, it is undisclosed.
- gavinsyancey 3y agoIf the prices on the menu are just 10% higher, this is fine. You know what you're getting in to and can always decide to order something cheaper or not eat there. If the prices on the menu are the same, but there's a note at the bottom of the menu saying "additional 10% fee to support our workers' healthcare" (or something similar) they are technically telling you, but this is certainly misleading (possible to miss the note, and it's harder to do math) and is very annoying. I've noticed several restaurants doing this. The new CA law explicitly bans this practice. If the prices are the same and you aren't notified until you get the bill, this is highly unethical and IMO fraud. There's a restaurant near me that does this; they offer to remove the fee if you notice and complain, but also try to guilt you into paying. The new CA law bans this too.
- fallingfrog 3y agoThe great thing about the free market is, we get to run the whole country like it’s a ferengi casino and then tell everyone that it’s their own fault that they work 80 hours a week and can’t afford to buy insulin.
- spacemadness 3y agoThis is a great writeup. I wish more political writing would call out specific names and show specific examples of the shady lobbying industry at work like this. American business culture is so greedy and slimy—with no shame whatsoever these groups push back on what amounts to legislating outright fraud for profit. I’d like to see a similar writeup on the real estate industry as that’s another powerful group actively making our lives miserable for their own profit.
- jjoonathan 3y agoYeah, but homeowners are a majority of the electorate. Our suffering is their free money. A feature, not a bug.
- doctorpangloss 3y agoThe flip side of greedflation is that people keep paying it. Nobody forces you to buy cell service from AT&T. T-Mobile gives you all prices up front. Anyway, T-Mobile is more expensive, so I can’t say that’s a consumer positive. Nobody forces you to buy AppleCare. I’ve probably wasted $3,000 on AppleCare. It’s a phone! I mean, who cares! Nobody forces you to book on United after you discover they cost 20% more than advertised. Nobody forces you to browse flights on Google Flights. Nobody forces you to dine in restaurants in San Francisco, as people in this thread are complaining about. When Tartine started charging $8.00 for a croissant, I just stopped going there. It’s a croissant. Though if you really want to get back at restaurants, drink at home. You talk about American business culture as this big homogenous thing. 60m-70m Americans are employed by bonafide small businesses. The owners are your neighbors, they live in your community. The landlords too! You live there. You’re that community. Nobody forces you to live somewhere with small businesses. This is a stylized and comic comment: If the crazy conspiracy theorists are right, that a GLP-1 inhibitor is going to be a general over-consumption treatment, okay, greedflation is over. It’s an objective fact that like 10-20% of customers of all the consumables and depreciables (I don’t like “durables”) that keeps getting more expensive deliver 80-90% of the profits. We pay prices tuned for people who can’t control themselves, who may have a serious issue with agency. So it goes. It’s a free country. It’s a fantasy that this law is going to make prices go down.
- samtho 3y agoAnother junk fee that disproportionately impacts people who do not have a ton of cash sitting around: reconnect fees. In the past, a utility had to come out to your property and physically disconnect a wire or close a valve with a lock if you didn’t pay your bill. Now with smart metering devices (for utilities) and computerized billing automation, the relay or solenoid is often integrated into the metering system or the service can be suspected electronically because there is no physical connection anymore. The $15-$30 per cell phone line or $60 for power to be restored is an inconceivably expensive excuse to collect money from those who can afford it the least. Paying the reconnect fee doesn't forgive any past due balance - that amount is still due. It also puts increase pressure for customers to agree to payment that they have no hope of making because they just really need power on to be able to cool their home or cell phone to be able to do their job, which creates this cycle of disconnect/reconnect every month that becomes a tax for being poor.
- t3rabytes 3y agoAt least in my major US metro, only the electric utility can toggle their service on/off remotely. Water and gas services have a digital meter but still need a physical action by a human service worker to turn them on/off.
- nick-of-time 3y agoHow does this relate to the GP comment?
- ProfessorLayton 3y agoRelated because it costs the utility company more than zero dollars to send someone over and reconnect water/gas?
- ChrisClark 3y agoBecause it directly references and answers part of the GP comment.
- learn_more 3y agoComplex pricing is intended to impede price shopping.
- deleted 3y ago[deleted]
- JustinGoldberg9 3y agono one gives a sh!t Washington DC butt kissing morons. Why not end visa? End the banks? End the regulatory capture? Monopoly laws ensure that small business never becomes a new monopoly and can never even compete. That's why we have these fees. Bitcoin is the credit default swap for fiat. You'll understand too late. You deserve the cancer you'll get.
- galkk 3y agoI look at car prices now and unavoidable "destination charges" and "document fees" are also outrageous. Just put it into the number that I see first, before the paperwork is started.
- marcus0x62 3y agoI traveled extensively for work for years — around 100 nights/year, on average. So, I’ve stayed at a lot of hotels. “Resort” and “amenity” fees were occasional annoyances, but the number 1 purveyor of junk fees in hospitality is local government. There were nearly always 1 - 3 junk taxes in addition to normal sales tax added on to the bill as a way to extort money from a group of people who have no franchise to contest the predatory taxes. I’ll not hold my breath waiting for the government to do anything about that.
- psd1 3y agoThe outrage isn't from the fee - it's from the hiding of it, which is deceptive. If your point is "tax bad", fair enough - but, off topic. If your point is that the tax is a junk fee, please let us know how the government prevents vendors from disclosing the tax at the time of booking.
- marcus0x62 3y agoYour outrage may be exclusively from the hiding of various fees, but please don’t assume that extends to everyone. My point is not that all taxes are bad. I never said anything remotely like that. My point is also not that the taxes in question are junk fees because they are typically hidden until checkout time. They are junk fees because: * the taxes are discriminatory in nature - they are only levied against hotel customers, nearly all of whom are not residents of the jurisdiction in question and who have no meaningful recourse to have the fees changed. and * the taxes are disproportionate to the local government services that out of town hotel guests might plausibly use. In other words, they provide no value. These taxes are just a stealthy and dishonest way of lowering taxes for the local citizens at the expense of out of town guests.
- psd1 3y agoI have no dispute with your views, but it's tangential to TFA. "The" outrage is not mine - it's the very point of TFA.