26 ms·

From airlines to ticket sellers, companies fight U.S. to keep junk fees

222 points by ctoth 3y ago

m1sta_ 3y ago
Safety, health, corruption, personal freedoms, misleading business practices (imho). The US is a shadow of what it should be.
bojangleslover 3y ago
Looks like pretty much everyone has fallen victim to such fees. Next time you should consider disputing the charge because it's basically all we can do at the individual level.
ralmidani 3y ago
After overdraft fees, probably the most egregious abuse of fees I’ve seen is being forced to pay an “online course fee” on top of university tuition. It made sense when online education was in its infancy, but these days it’s much, much cheaper to deliver online courses - less instructor time, more “scalable”, and less need for large lecture halls. Not to mention that many professors don’t even bother to record any lectures and the assignments are often graded by TAs. So we’re paying you $1,500+ a course plus fees for... what, exactly? Anyway, are universities covered by these policies as well?
deleted 3y ago
[deleted]
batiudrami 3y ago
There are obviously more important things, but when visiting one of the most annoying parts of the US is it is impossible to know what something actually costs. With taxes and fees and gratuities (optional or automatic) it feels like I just have no idea what the relationship between the sticker and the actual cost is.
- finite_depth 3y ago
  [dead]
- chias 3y ago
  It really isn't any better when you live here.
- j1elo 3y ago
  I guess a nice counter would be sticking with cash and saying "I am buying this because the sticker says $19.99 and I got a $20 bill in my pocket, so I'm going to assume I can buy it, right?" I mean, that's silly I know. But in more seriousness, I feel all that BS of extra hidden prices gets worse when everything becomes just a slightly-higher number that the clerk types on a pad when you're paying with card.
  - kelipso 3y ago
    Well the tax shit definitely won't work because they give you a receipt but the tip shit will work. Pretty much you need a law that says sticker price is actual price, fuck all the excuses they make about whatever local bullshit.
no_wizard 3y ago
I would do anything to erase all the lobbying organizations listed in this article to be wiped off the face of the earth and prevent their replacement. Ridiculous. Transparent pricing is a fundamental feature of market economics and distorting that distorts that feature
- shiroiuma 3y ago
  I wish we could get some aliens to abduct all the people in these organizations and not return them. The aliens from "To Serve Man" can have them.
welzel 3y ago
Fun fact: In Europe this kind of junk fees mostly do not exist and taxes are included in prices. It is weird how much easier it gets for customers to compare offers. Comparing political systems, in the US the gov protects revenues and the EU it protects consumer rights. You can experience this for yourself: try booking a flight with a old fashioned carrier like lufthansa.de and then go to a "we will rip you off for sure" travel-portal from uk to book the exact same flight or a low-cost airline like ryanair. You find the portal by a simple google search, as they are so "cheap" compared to the official price. The portal shows a price that is 20% less then the carrier price, but somehow you always end up paying at least 30% more, even IF you are really good at the game of "avoid bullshit upsell checkboxes".
fbdab103 3y ago
>The fees together may cost Americans at least $64 billion annually, according to a rough White House estimate, underscoring its efforts to deliver financial relief to families grappling with high prices. At ~$190/person, that honestly strikes me as low. A single last-second convenience fee to an entertainment venue can be tens of dollars. Monthly, it feels like almost every service I use has an unstated fee above and beyond the quoted sticker price.
- jwagenet 3y ago
  I’d guess that something like 80% of fees are shouldered by 20% of folks (or maybe 60/40, 70/30). The bottom quarter to half of Americans probably don’t have large entertainment and travel budgets.
bmmayer1 3y ago
The junk fee legislation seems like a great way to make companies waste millions of dollars in resources rebuilding their backend systems just to result in the exact same fees being rolled into the remaining SKUs or charged to more customers than necessary.
- jrockway 3y ago
  Hey, more work for software engineers, increasing demand, increasing salaries. Who can complain? Your vacation is easier to plan, and you can take more of them ;)
- fbdab103 3y ago
  At least as a consumer, I can actually price compare my options if the out-the-door price is made public. Nobody made companies hide the prices in the first place. It was a deliberate tactic to trick buyers.
- vanviegen 3y ago
  Systems built to operate in the EU will already have that capability.
- loeg 3y ago
  No, the junk fees were the wasteful change to backend systems. No one forced companies to do that.
- megaman821 3y ago
  Never thought I would find a cheerleader for non-transparent pricing.
  - fbdab103 3y ago
    Maybe they work for Ticketmaster or another fee-heavy industry?
- matsemann 3y ago
  The fees aren't the problem, it's that they're hidden until the very end. Makes it impossible to compare services, feels like extortion when asked for after you've already eaten, and is just misleading. In the EU the advertised price has to be with all fees included. No surprises, and I don't have to care if the hotel is €75 + €25 service fee, or just €100.
noodlesUK 3y ago
These fees seem to be particularly prevalent in the travel and entertainment industries. I stayed at a hotel in NYC relatively recently, and I booked and pre-paid through hotels.com. When I arrived, the hotel sprung me with a $50/night "resort fee", which was apparently required to stay at the hotel (though I am sure they would tell regulators that it's optional). I also don't understand the US practice of not including relevant sales tax charges in the cost of a good. I know that many US states operate a sales tax (which seems like a bad idea as opposed to a VAT or similar system). I don't mind having actually optional extras be charged separately, but if they aren't really optional (like a service fee), it should be part of the price. I'd be very interested if someone has a link to the text of what is actually being proposed.
- Moto7451 3y ago
  Regarding US Sales Tax v.s. VAT. Sales Tax is an indirect tax on consumption that is deferred until the end consumer makes a purchased, and taxed in the area they made the purchase (even online since 2018). Some end consumers are tax exempt and can avoid paying Sales Tax. Companies can write off taxes paid where appropriate. Everyone else in the value chain is tax exempt assuming they filed their paperwork correctly. Ultimately this means that there is no equivalent to a VAT recovery, reverse charing, etc, and the governments that collect sales tax don't see any money if something is never sold. Sales tax is not included in the price because it is based on the price. If a widget is sold for $10 today, there is less tax paid if you sell that widget for $1 tomorrow. It doesn't matter if $9 of additional value was created along the way. States, counties, and cities can have different sales tax rates for various reasons. For example, my city voted to add to the sales tax to pay for road improvements. There is a lot of travel into our area for consumption so it ends up that visitors pay for roads even if they don't refuel their cars in the city. Sales Tax and VAT are not bad ideas, they're just different ideas. At the end of the day if your government wants a Dollar, a Pound, or a Euro, they'll find a way to raise it.
  - kibwen 3y ago
    Regardless of the distinction between sales tax and VAT, if any given US state wanted to have the state sales tax be included in the price that is shown to the end-user (at least in physical stores that exist in that state), I don't think there's any federal law preventing them from doing so. In other words, rather than having the store list a pack of gum for $1.00 and then charging me $1.06 at the register, the state could just require that the store list the pack of gum at $1.06. If that means the price of a can of Arizona Tea has to vary by, like, two cents when you cross state lines, that's a worthwhile tradeoff.
xrd 3y ago
I'm in a hotel in Clearwater Florida right now. The coffee shop added an automatic and mandatory 19% gratuity. I always thought I was only forced to pay 18%! The buffet this morning did the same thing. The receipt says "18% is gratuity, 1% is for operating costs." I thought paying for a meal included the operating costs. I'm shocked to find out those were provided for free up to this point, I feel so grateful that the restaurants didn't need to pass these on to me. And, I'm a little surprised that neither of these two experiences required anything from the servers other than handing me or my kids a drink. I assume this is because this hotel probably has a lot of tourists from countries where they don't tip. And, I always tip my barista at least 20% but that's because I go to the same place and know them beyond just as a server, and a hotel in Clearwater will never foster that relationship between anyone.
- lsaferite 3y ago
  Mandatory gratuity for a non-tipped employees should be 100% forbidden.
  - Analemma_ 3y ago
    Who is a "tipped versus non-tipped employee"? I think for servers coming to your table it's actually spelled out in law, for everything else it's a social convention that businesses can try to shove in one direction.
    - jfengel 3y ago
      It is a legal distinction. In most places there is a lower minimum wage for tipped employees. The law says what jobs qualify for the tipped minimum. (Legally, they have to make up the difference if you didn't make enough in tips. But most servers make more than that via tips, which is why they often fight efforts to eliminate tipping.)
      - bobthepanda 3y ago
        Also, wage theft is one of the most common things that happens to restaurant workers, because a lot of employers try to avoid making up the difference.
jopsen 3y ago
> “If a consumer is led to believe something costs $10, and it costs $20, they’ve been misled.” This is nice. But the US will also need sales taxes included in the advertised price. The EU have generally driven a lot of transparency around fees. Usually under the banner of fostering competition.
- JumpCrisscross 3y ago
  > the US will also need sales taxes included in the advertised price This is totally separate from junk fees, which are controlled by the seller. Sales tax exclusive is a common complaint from visiting Europeans. It is seldom an issue for Americans because most aren’t paying with exact change or calculating budgets to the penny. Go to low-income neighbourhoods, where incomes are closer to those in Europe, and you’ll find tax-inclusive pricing.
  - jcbrand 3y ago
    > Go to low-income neighbourhoods, where incomes are closer to those in Europe, and you’ll find tax-inclusive pricing This is a pretty funny but largely ignorant dig at Europeans. Every country I've ever been to except the US includes VAT in their prices and I've been to over 30. It's not just a European thing but a world thing, where the US once again is the odd one out.
    - biztos 3y ago
      A country with an interesting VAT/sales tax is Thailand, where large shops and chains and places in malls will add tax to the final price (and service charge sometimes) while smaller places will not. (I’m talking restaurants, VAT is included in online stores and I’m pretty sure for physical goods.) I think this is because of the minimum turnover for VAT[0] at least on paper, but there are places obviously making a lot more that just don’t bother with it, so there is probably a lot of adventurous accounting as well. Lovely place, you should add it to your 30+. [0]: https://www.aseanbriefing.com/news/a-guide-to-taxation-in-thailand/ https://www.aseanbriefing.com/news/a-guide-to-taxation-in-th...
    - 3y ago
RadixDLT 3y ago
these companies are acting like vultures, they will scam the customers until they are stopped
lastofthemojito 3y ago
Seems like lobbying groups don't have a good argument for this. The argument I'd always heard was "shady businesses started having these resort fees or fees for choosing your seat, etc, and we needed to do similar or else they'd each our lunch when folks compare prices". If the government is suggesting banning the shady fees, then we're back to a level playing field, no?
techsupporter 3y ago
Nobody wants to raise prices but everybody wants more money. In the past week, I've seen under the line mandatory fees from a pet grooming service ($5.99 required "materials fee"), a large apartment operator ("technology package fee" to have mandatory access to the resident portal), and a bookstore ($2 order handling charge). Hiding the actual cost with sneaky fees is getting out of hand and I have zero sympathy for "oh the poor merchants" or "showing the proper price is too hard." They made the decision to impose the fees, they can make the decision to put them in the price where they belong.
- ed_elliott_asc 3y ago
  I went for dinner tonight and for some reason they decided to charge an extra pot of gravy at £1 when it always used to be free - this is extremely irritating.
  - jrockway 3y ago
    This is not a junk fee. You bought a pot of gravy for £1. Being nickeled and dimed [1] never feels good, but it's somewhat fair. Why should you pay to check luggage if you're not checking luggage? Why should you pay for two pots of gravy if you only want to eat one? [1] I realize this expression probably doesn't translate well to speakers of English that use the Pound as their currency. I apologize.
    - amatecha 3y ago
      Right, a junk fee in this case would be something more like "dishes/utensils cleaning fee" or something else inherent to the business that is for some reason not included in the price presented to the customer.
    - ensignavenger 3y ago
      If the restraunt previosly did not charge for an extra pot of gravy, but now are, it would be common courtesy to their loyal repeat customers to make certain they are aware of the change when they decide to make it. How to best do that may not be straight forward, though.
1024core 3y ago
What got me recently was the fee to select a seat on a flight. I'm traveling with my family, including a 12 yo kid. Am I going to let her sit between two strange men for the flight? Of course not! So I have no choice but to pay the $50/seat (or whatever the amount was) so we can all sit together. This is criminal! Who will be held responsible if my kid gets assaulted in the flight?
- jrockway 3y ago
  The upside of this is that you save $50 on your flight if you're willing to sit alone in a middle seat, thus making air travel more accessible to more people. $50 means a lot to some people. It's really all about how you perceive this. You see it as a hidden cost, others see it as a discount.
  - bruceb 3y ago
    This is right. Cheap seats enable lower income people to travel. Airfare is (generally) cheaper than when it was regulated. That being said the US rule that requires airlines to give you 24hr window to cancel a flight after booking is great.
  - eigenvector 3y ago
    It's not a hidden charge because as you said, you can still travel without paying it. And it provides a method of price discrimination between people who care where they sit and those who don't. A hidden charge would be if you had to pay for seat selection to sit anywhere at all and it wasn't included in the original price.
  - dghlsakjg 3y ago
    The problem is that the person that a kid gets put next to isn’t a babysitter, and shouldn’t have to be one. I don’t want to have to explain to a kid that they need to put their phone in silent or use headphones, I don’t want to have to keep them from kicking the seat in front of them, etc. The reality is that there is a base level of decency that should exist. That includes not splitting up children from their guardians. If you want to charge people for picking their seats, fine. Charging parents to not be separated from their kids is just plain evil. Choosing your seat for $50, and seating a person with their legal companion (or disability aide), even if you didn’t pay extra, are possible at the same time. As an aside, I’m not entirely convinced that my ticket is $50 less than it would have been with seating fees.
Throwfi44 3y ago
Yet another reason to skip US on travel. In EU I may get like extra 3 euro council tax for staying at hotel. In US even basic stuff, like going to restaurant for dinner, is "an experience" that requires reservation and generous bakshish.
- jopsen 3y ago
  > In EU I may get like extra 3 euro council tax for staying at hotel. I do hate those taxes not being included in the price, and I complain every time :)
nobodyandproud 3y ago
This is a classic example of market failure. Consumers will choose the lowest rates—all else being equal—and this leads to artificially low prices. What I don’t understand is whether doing this really protects their profits. If everyone does it, then it’s a race to the bottom anyway. Is it during this “transition period” where profits are made? And if everyone in the US does it, then the natural outcome is for everyone and anyone to avoid doing any business or travel in the US.
- rr808 3y ago
  You can't blame the provider. Eg if you were the only hotel in town without the fee and your rate is higher than everyone else you'll likely be empty. I'm sure most hotels are only too happy if everyone is banned and the playing field is flat.
- fullshark 3y ago
  Just seems like false advertising to me
  - teeray 3y ago
    You just missed the fine print on the advertisement: * plus applicable taxes and fees, taxes on the fees, and fees for assessing the taxes and fees
- Zak 3y ago
  I think in many cases, companies want to keep it because it makes comparison-shopping by price more difficult. There may also be some psychological trickery wherein customers are more likely to accept a higher price after they've started the purchase process.
  - nobodyandproud 3y ago
    Yeah, I agree that’s what the businesses are doing. It’s the psychological trickery where I wonder: Is there really value there in the long term?
  - 3y ago
raincom 3y ago
https://archive.ph/8RLsB https://archive.ph/8RLsB
udhh776 3y ago
All extra fees contribute to GDP growth. Just like cleaning up pollution after spewing it everywhere, selling bombs and rebuilding things they destroy. Its called American genius.
orasis 3y ago
Hotel taxes in many cities has become insane. The hidden fees aren’t just coming from the businesses themselves.
- jopsen 3y ago
  Yeah, but why are hotels not forced to include these taxes in the price? They could, but choose not to.
dalbasal 3y ago
This is the sort of thing, we have to have an adult in the room. When complex, confusing pricing structures exist.. fiddling with them becomes a salesman / marketers main tool. It's what they do everyday, how they operate, the wins bring to the table. These are the knobs that they twiddle, and have for decades been producing reports quantifying the value of their work. They are now panicking, that they won't know how to do their job.. and reporting to CEOs that profits/sales in all those reports will disappear. Irl, this is pulling a Band-Aid. You could make all service charges illegal, from cafes to airlines.. and the industries we'll have forgotten about it within weeks or months.
m_ke 3y ago
I'm currently 60 minutes in, waiting on hold for American Airlines support, because I clicked on the cancel flight button on my trip details page hoping to get a warning page with details of my cancellation options, but instead it just canceled it on the spot with no refund/credit. I've never seen this before from any other airlines, nor any other products that cost thousands of dollars. For some reason they also have no other way to reach support other than phone. EDIT: Googling around it looks like it's standard operating procedure for some airlines: https://www.reddit.com/r/frontierairlines/comments/10svdqb/accidentally_cancelled_flight/ https://www.reddit.com/r/frontierairlines/comments/10svdqb/a...
- ikekkdcjkfke 3y ago
  Newsworthy
- shortcake27 3y ago
  Wow. I’m very careful with clicking Cancel/Modify buttons for this reason. Never actually thought it would happen. Now I feel my paranoia has paid off.
acheron 3y ago
“Junk fees” is obviously manipulative language that has no real definition, which makes me automatically oppose whatever this “ban” is.
- everybodyknows 3y ago
  Right, it should be "hidden", or "deceptive". The irony being that by figuratively speaking marketing this effort as being against "junk fees", the government itself perpetrates a deception.
gnicholas 3y ago
If these fees are outlawed, I wonder what the new equilibrium will be. The govt talks about how this costs Americans hundreds of billions of dollars, which makes it sound like the money will magically be transferred back to consumers. But the reality is more complicated, and likely involves businesses migrating these fees into their base prices. More transparency is good, for sure, but I wonder how much money will actually be saved.
- nerdbert 3y ago
  These proposals don't say you can't charge fees. They say that the actual total price has to be displayed from the beginning. If Ticketmaster wants to break down a $250 concert ticket as $180 for the ticket and $70 for an issuing fee, that's fine. But since the fee is mandatory, they have to advertise it as $250, not $180. They still get the same amount of money but people aren't being lied to, and are better able to make smart decisions about what to buy without having to wade through a morass of fine print.
  - bruceb 3y ago
    President Biden in speeches doesn’t say fees should be visible, he says they be ended. It’s not unreasonable people might think proposals are to end the not just makes the visible when scrolling hotel rooms, tix, etc.
    - Macha 3y ago
      Well, yes, the only reason the fee exists is so they can break it out of the price for a lower sticker price while recieving the same revenue. If it needs to be included in the sticker price, then there's no reason for ticketmaster to designate it a seperate fee at all
- Zak 3y ago
  Of course for many items the advertised price will simply increase to the true price, as some advertised prices are unsustainable without the hidden fees. That alone is a big win for consumers because they won't have to waste time finding out what the real price is. It probably will bring some prices down though, by making comparison shopping easier, and by preventing some sales where the customer would have accepted the fee after getting partway through the buying process, but would have rejected the true price up front.
bastard_op 3y ago
It seems like any fast food moves to some sort of ipad-based cash register deal, they all ask for a gratuity if it's a burger or a coffee as though it's built-in and expected. I know no one is getting a tip in those places that I don't put cash into their pocket, and they'd probably be fired if they did for stealing. It's usually the first and last time I go to them as I feel weird them even asking me for fast food. No one asks for a tip at my preferred dirty old fast food spot of choice still using a cash register from the 80's. As a result, I mostly never eat out anymore, fast food or otherwise with costs gone absurd with or without tips. Let the fools that tip 20% for their coffee keep murica great.

222 points by ctoth 3y ago

Safety, health, corruption, personal freedoms, misleading business practices (imho). The US is a shadow of what it should be.

bojangleslover 3y ago

Looks like pretty much everyone has fallen victim to such fees. Next time you should consider disputing the charge because it's basically all we can do at the individual level.

ralmidani 3y ago

After overdraft fees, probably the most egregious abuse of fees I’ve seen is being forced to pay an “online course fee” on top of university tuition. It made sense when online education was in its infancy, but these days it’s much, much cheaper to deliver online courses - less instructor time, more “scalable”, and less need for large lecture halls. Not to mention that many professors don’t even bother to record any lectures and the assignments are often graded by TAs. So we’re paying you $1,500+ a course plus fees for... what, exactly? Anyway, are universities covered by these policies as well?

deleted 3y ago

[deleted]

batiudrami 3y ago

There are obviously more important things, but when visiting one of the most annoying parts of the US is it is impossible to know what something actually costs. With taxes and fees and gratuities (optional or automatic) it feels like I just have no idea what the relationship between the sticker and the actual cost is.

finite_depth 3y ago
[dead]
chias 3y ago
It really isn't any better when you live here.
j1elo 3y ago
I guess a nice counter would be sticking with cash and saying "I am buying this because the sticker says $19.99 and I got a $20 bill in my pocket, so I'm going to assume I can buy it, right?" I mean, that's silly I know. But in more seriousness, I feel all that BS of extra hidden prices gets worse when everything becomes just a slightly-higher number that the clerk types on a pad when you're paying with card.
- kelipso 3y ago
  Well the tax shit definitely won't work because they give you a receipt but the tip shit will work. Pretty much you need a law that says sticker price is actual price, fuck all the excuses they make about whatever local bullshit.

no_wizard 3y ago

I would do anything to erase all the lobbying organizations listed in this article to be wiped off the face of the earth and prevent their replacement. Ridiculous. Transparent pricing is a fundamental feature of market economics and distorting that distorts that feature

shiroiuma 3y ago
I wish we could get some aliens to abduct all the people in these organizations and not return them. The aliens from "To Serve Man" can have them.

welzel 3y ago

Fun fact: In Europe this kind of junk fees mostly do not exist and taxes are included in prices. It is weird how much easier it gets for customers to compare offers. Comparing political systems, in the US the gov protects revenues and the EU it protects consumer rights. You can experience this for yourself: try booking a flight with a old fashioned carrier like lufthansa.de and then go to a "we will rip you off for sure" travel-portal from uk to book the exact same flight or a low-cost airline like ryanair. You find the portal by a simple google search, as they are so "cheap" compared to the official price. The portal shows a price that is 20% less then the carrier price, but somehow you always end up paying at least 30% more, even IF you are really good at the game of "avoid bullshit upsell checkboxes".

fbdab103 3y ago

>The fees together may cost Americans at least $64 billion annually, according to a rough White House estimate, underscoring its efforts to deliver financial relief to families grappling with high prices. At ~$190/person, that honestly strikes me as low. A single last-second convenience fee to an entertainment venue can be tens of dollars. Monthly, it feels like almost every service I use has an unstated fee above and beyond the quoted sticker price.

jwagenet 3y ago
I’d guess that something like 80% of fees are shouldered by 20% of folks (or maybe 60/40, 70/30). The bottom quarter to half of Americans probably don’t have large entertainment and travel budgets.

bmmayer1 3y ago

The junk fee legislation seems like a great way to make companies waste millions of dollars in resources rebuilding their backend systems just to result in the exact same fees being rolled into the remaining SKUs or charged to more customers than necessary.

jrockway 3y ago
Hey, more work for software engineers, increasing demand, increasing salaries. Who can complain? Your vacation is easier to plan, and you can take more of them ;)
fbdab103 3y ago
At least as a consumer, I can actually price compare my options if the out-the-door price is made public. Nobody made companies hide the prices in the first place. It was a deliberate tactic to trick buyers.
vanviegen 3y ago
Systems built to operate in the EU will already have that capability.
loeg 3y ago
No, the junk fees were the wasteful change to backend systems. No one forced companies to do that.
megaman821 3y ago
Never thought I would find a cheerleader for non-transparent pricing.
- fbdab103 3y ago
  Maybe they work for Ticketmaster or another fee-heavy industry?
matsemann 3y ago
The fees aren't the problem, it's that they're hidden until the very end. Makes it impossible to compare services, feels like extortion when asked for after you've already eaten, and is just misleading. In the EU the advertised price has to be with all fees included. No surprises, and I don't have to care if the hotel is €75 + €25 service fee, or just €100.

noodlesUK 3y ago

These fees seem to be particularly prevalent in the travel and entertainment industries. I stayed at a hotel in NYC relatively recently, and I booked and pre-paid through hotels.com. When I arrived, the hotel sprung me with a $50/night "resort fee", which was apparently required to stay at the hotel (though I am sure they would tell regulators that it's optional). I also don't understand the US practice of not including relevant sales tax charges in the cost of a good. I know that many US states operate a sales tax (which seems like a bad idea as opposed to a VAT or similar system). I don't mind having actually optional extras be charged separately, but if they aren't really optional (like a service fee), it should be part of the price. I'd be very interested if someone has a link to the text of what is actually being proposed.

Moto7451 3y ago
Regarding US Sales Tax v.s. VAT. Sales Tax is an indirect tax on consumption that is deferred until the end consumer makes a purchased, and taxed in the area they made the purchase (even online since 2018). Some end consumers are tax exempt and can avoid paying Sales Tax. Companies can write off taxes paid where appropriate. Everyone else in the value chain is tax exempt assuming they filed their paperwork correctly. Ultimately this means that there is no equivalent to a VAT recovery, reverse charing, etc, and the governments that collect sales tax don't see any money if something is never sold. Sales tax is not included in the price because it is based on the price. If a widget is sold for $10 today, there is less tax paid if you sell that widget for $1 tomorrow. It doesn't matter if $9 of additional value was created along the way. States, counties, and cities can have different sales tax rates for various reasons. For example, my city voted to add to the sales tax to pay for road improvements. There is a lot of travel into our area for consumption so it ends up that visitors pay for roads even if they don't refuel their cars in the city. Sales Tax and VAT are not bad ideas, they're just different ideas. At the end of the day if your government wants a Dollar, a Pound, or a Euro, they'll find a way to raise it.
- kibwen 3y ago
  Regardless of the distinction between sales tax and VAT, if any given US state wanted to have the state sales tax be included in the price that is shown to the end-user (at least in physical stores that exist in that state), I don't think there's any federal law preventing them from doing so. In other words, rather than having the store list a pack of gum for $1.00 and then charging me $1.06 at the register, the state could just require that the store list the pack of gum at $1.06. If that means the price of a can of Arizona Tea has to vary by, like, two cents when you cross state lines, that's a worthwhile tradeoff.

xrd 3y ago

I'm in a hotel in Clearwater Florida right now. The coffee shop added an automatic and mandatory 19% gratuity. I always thought I was only forced to pay 18%! The buffet this morning did the same thing. The receipt says "18% is gratuity, 1% is for operating costs." I thought paying for a meal included the operating costs. I'm shocked to find out those were provided for free up to this point, I feel so grateful that the restaurants didn't need to pass these on to me. And, I'm a little surprised that neither of these two experiences required anything from the servers other than handing me or my kids a drink. I assume this is because this hotel probably has a lot of tourists from countries where they don't tip. And, I always tip my barista at least 20% but that's because I go to the same place and know them beyond just as a server, and a hotel in Clearwater will never foster that relationship between anyone.

lsaferite 3y ago
Mandatory gratuity for a non-tipped employees should be 100% forbidden.
- Analemma_ 3y ago
  Who is a "tipped versus non-tipped employee"? I think for servers coming to your table it's actually spelled out in law, for everything else it's a social convention that businesses can try to shove in one direction.
  - jfengel 3y ago
    It is a legal distinction. In most places there is a lower minimum wage for tipped employees. The law says what jobs qualify for the tipped minimum. (Legally, they have to make up the difference if you didn't make enough in tips. But most servers make more than that via tips, which is why they often fight efforts to eliminate tipping.)
    - bobthepanda 3y ago
      Also, wage theft is one of the most common things that happens to restaurant workers, because a lot of employers try to avoid making up the difference.

jopsen 3y ago

> “If a consumer is led to believe something costs $10, and it costs $20, they’ve been misled.” This is nice. But the US will also need sales taxes included in the advertised price. The EU have generally driven a lot of transparency around fees. Usually under the banner of fostering competition.

JumpCrisscross 3y ago
> the US will also need sales taxes included in the advertised price This is totally separate from junk fees, which are controlled by the seller. Sales tax exclusive is a common complaint from visiting Europeans. It is seldom an issue for Americans because most aren’t paying with exact change or calculating budgets to the penny. Go to low-income neighbourhoods, where incomes are closer to those in Europe, and you’ll find tax-inclusive pricing.
- jcbrand 3y ago
  > Go to low-income neighbourhoods, where incomes are closer to those in Europe, and you’ll find tax-inclusive pricing This is a pretty funny but largely ignorant dig at Europeans. Every country I've ever been to except the US includes VAT in their prices and I've been to over 30. It's not just a European thing but a world thing, where the US once again is the odd one out.
  - biztos 3y ago
    A country with an interesting VAT/sales tax is Thailand, where large shops and chains and places in malls will add tax to the final price (and service charge sometimes) while smaller places will not. (I’m talking restaurants, VAT is included in online stores and I’m pretty sure for physical goods.) I think this is because of the minimum turnover for VAT[0] at least on paper, but there are places obviously making a lot more that just don’t bother with it, so there is probably a lot of adventurous accounting as well. Lovely place, you should add it to your 30+. [0]: https://www.aseanbriefing.com/news/a-guide-to-taxation-in-thailand/ https://www.aseanbriefing.com/news/a-guide-to-taxation-in-th...
  - 3y ago

RadixDLT 3y ago

these companies are acting like vultures, they will scam the customers until they are stopped

lastofthemojito 3y ago

Seems like lobbying groups don't have a good argument for this. The argument I'd always heard was "shady businesses started having these resort fees or fees for choosing your seat, etc, and we needed to do similar or else they'd each our lunch when folks compare prices". If the government is suggesting banning the shady fees, then we're back to a level playing field, no?

techsupporter 3y ago

Nobody wants to raise prices but everybody wants more money. In the past week, I've seen under the line mandatory fees from a pet grooming service ($5.99 required "materials fee"), a large apartment operator ("technology package fee" to have mandatory access to the resident portal), and a bookstore ($2 order handling charge). Hiding the actual cost with sneaky fees is getting out of hand and I have zero sympathy for "oh the poor merchants" or "showing the proper price is too hard." They made the decision to impose the fees, they can make the decision to put them in the price where they belong.

ed_elliott_asc 3y ago
I went for dinner tonight and for some reason they decided to charge an extra pot of gravy at £1 when it always used to be free - this is extremely irritating.
- jrockway 3y ago
  This is not a junk fee. You bought a pot of gravy for £1. Being nickeled and dimed [1] never feels good, but it's somewhat fair. Why should you pay to check luggage if you're not checking luggage? Why should you pay for two pots of gravy if you only want to eat one? [1] I realize this expression probably doesn't translate well to speakers of English that use the Pound as their currency. I apologize.
  - amatecha 3y ago
    Right, a junk fee in this case would be something more like "dishes/utensils cleaning fee" or something else inherent to the business that is for some reason not included in the price presented to the customer.
  - ensignavenger 3y ago
    If the restraunt previosly did not charge for an extra pot of gravy, but now are, it would be common courtesy to their loyal repeat customers to make certain they are aware of the change when they decide to make it. How to best do that may not be straight forward, though.

1024core 3y ago

What got me recently was the fee to select a seat on a flight. I'm traveling with my family, including a 12 yo kid. Am I going to let her sit between two strange men for the flight? Of course not! So I have no choice but to pay the $50/seat (or whatever the amount was) so we can all sit together. This is criminal! Who will be held responsible if my kid gets assaulted in the flight?

jrockway 3y ago
The upside of this is that you save $50 on your flight if you're willing to sit alone in a middle seat, thus making air travel more accessible to more people. $50 means a lot to some people. It's really all about how you perceive this. You see it as a hidden cost, others see it as a discount.
- bruceb 3y ago
  This is right. Cheap seats enable lower income people to travel. Airfare is (generally) cheaper than when it was regulated. That being said the US rule that requires airlines to give you 24hr window to cancel a flight after booking is great.
- eigenvector 3y ago
  It's not a hidden charge because as you said, you can still travel without paying it. And it provides a method of price discrimination between people who care where they sit and those who don't. A hidden charge would be if you had to pay for seat selection to sit anywhere at all and it wasn't included in the original price.
- dghlsakjg 3y ago
  The problem is that the person that a kid gets put next to isn’t a babysitter, and shouldn’t have to be one. I don’t want to have to explain to a kid that they need to put their phone in silent or use headphones, I don’t want to have to keep them from kicking the seat in front of them, etc. The reality is that there is a base level of decency that should exist. That includes not splitting up children from their guardians. If you want to charge people for picking their seats, fine. Charging parents to not be separated from their kids is just plain evil. Choosing your seat for $50, and seating a person with their legal companion (or disability aide), even if you didn’t pay extra, are possible at the same time. As an aside, I’m not entirely convinced that my ticket is $50 less than it would have been with seating fees.

Throwfi44 3y ago

Yet another reason to skip US on travel. In EU I may get like extra 3 euro council tax for staying at hotel. In US even basic stuff, like going to restaurant for dinner, is "an experience" that requires reservation and generous bakshish.

jopsen 3y ago
> In EU I may get like extra 3 euro council tax for staying at hotel. I do hate those taxes not being included in the price, and I complain every time :)

nobodyandproud 3y ago

This is a classic example of market failure. Consumers will choose the lowest rates—all else being equal—and this leads to artificially low prices. What I don’t understand is whether doing this really protects their profits. If everyone does it, then it’s a race to the bottom anyway. Is it during this “transition period” where profits are made? And if everyone in the US does it, then the natural outcome is for everyone and anyone to avoid doing any business or travel in the US.

rr808 3y ago
You can't blame the provider. Eg if you were the only hotel in town without the fee and your rate is higher than everyone else you'll likely be empty. I'm sure most hotels are only too happy if everyone is banned and the playing field is flat.
fullshark 3y ago
Just seems like false advertising to me
- teeray 3y ago
  You just missed the fine print on the advertisement: * plus applicable taxes and fees, taxes on the fees, and fees for assessing the taxes and fees
Zak 3y ago
I think in many cases, companies want to keep it because it makes comparison-shopping by price more difficult. There may also be some psychological trickery wherein customers are more likely to accept a higher price after they've started the purchase process.
- nobodyandproud 3y ago
  Yeah, I agree that’s what the businesses are doing. It’s the psychological trickery where I wonder: Is there really value there in the long term?
- 3y ago

raincom 3y ago

https://archive.ph/8RLsB https://archive.ph/8RLsB

udhh776 3y ago

All extra fees contribute to GDP growth. Just like cleaning up pollution after spewing it everywhere, selling bombs and rebuilding things they destroy. Its called American genius.

orasis 3y ago

Hotel taxes in many cities has become insane. The hidden fees aren’t just coming from the businesses themselves.

jopsen 3y ago
Yeah, but why are hotels not forced to include these taxes in the price? They could, but choose not to.

dalbasal 3y ago

This is the sort of thing, we have to have an adult in the room. When complex, confusing pricing structures exist.. fiddling with them becomes a salesman / marketers main tool. It's what they do everyday, how they operate, the wins bring to the table. These are the knobs that they twiddle, and have for decades been producing reports quantifying the value of their work. They are now panicking, that they won't know how to do their job.. and reporting to CEOs that profits/sales in all those reports will disappear. Irl, this is pulling a Band-Aid. You could make all service charges illegal, from cafes to airlines.. and the industries we'll have forgotten about it within weeks or months.

m_ke 3y ago

I'm currently 60 minutes in, waiting on hold for American Airlines support, because I clicked on the cancel flight button on my trip details page hoping to get a warning page with details of my cancellation options, but instead it just canceled it on the spot with no refund/credit. I've never seen this before from any other airlines, nor any other products that cost thousands of dollars. For some reason they also have no other way to reach support other than phone. EDIT: Googling around it looks like it's standard operating procedure for some airlines: https://www.reddit.com/r/frontierairlines/comments/10svdqb/accidentally_cancelled_flight/ https://www.reddit.com/r/frontierairlines/comments/10svdqb/a...

ikekkdcjkfke 3y ago
Newsworthy
shortcake27 3y ago
Wow. I’m very careful with clicking Cancel/Modify buttons for this reason. Never actually thought it would happen. Now I feel my paranoia has paid off.

acheron 3y ago

“Junk fees” is obviously manipulative language that has no real definition, which makes me automatically oppose whatever this “ban” is.

everybodyknows 3y ago
Right, it should be "hidden", or "deceptive". The irony being that by figuratively speaking marketing this effort as being against "junk fees", the government itself perpetrates a deception.

gnicholas 3y ago

If these fees are outlawed, I wonder what the new equilibrium will be. The govt talks about how this costs Americans hundreds of billions of dollars, which makes it sound like the money will magically be transferred back to consumers. But the reality is more complicated, and likely involves businesses migrating these fees into their base prices. More transparency is good, for sure, but I wonder how much money will actually be saved.

nerdbert 3y ago
These proposals don't say you can't charge fees. They say that the actual total price has to be displayed from the beginning. If Ticketmaster wants to break down a $250 concert ticket as $180 for the ticket and $70 for an issuing fee, that's fine. But since the fee is mandatory, they have to advertise it as $250, not $180. They still get the same amount of money but people aren't being lied to, and are better able to make smart decisions about what to buy without having to wade through a morass of fine print.
- bruceb 3y ago
  President Biden in speeches doesn’t say fees should be visible, he says they be ended. It’s not unreasonable people might think proposals are to end the not just makes the visible when scrolling hotel rooms, tix, etc.
  - Macha 3y ago
    Well, yes, the only reason the fee exists is so they can break it out of the price for a lower sticker price while recieving the same revenue. If it needs to be included in the sticker price, then there's no reason for ticketmaster to designate it a seperate fee at all
Zak 3y ago
Of course for many items the advertised price will simply increase to the true price, as some advertised prices are unsustainable without the hidden fees. That alone is a big win for consumers because they won't have to waste time finding out what the real price is. It probably will bring some prices down though, by making comparison shopping easier, and by preventing some sales where the customer would have accepted the fee after getting partway through the buying process, but would have rejected the true price up front.

bastard_op 3y ago

It seems like any fast food moves to some sort of ipad-based cash register deal, they all ask for a gratuity if it's a burger or a coffee as though it's built-in and expected. I know no one is getting a tip in those places that I don't put cash into their pocket, and they'd probably be fired if they did for stealing. It's usually the first and last time I go to them as I feel weird them even asking me for fast food. No one asks for a tip at my preferred dirty old fast food spot of choice still using a cash register from the 80's. As a result, I mostly never eat out anymore, fast food or otherwise with costs gone absurd with or without tips. Let the fools that tip 20% for their coffee keep murica great.