[HN Gopher] Companies use drip pricing to overcharge consumers
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Companies use drip pricing to overcharge consumers
Author : 27153
Score : 152 points
Date : 2023-01-24 19:49 UTC (3 hours ago)
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| civilized wrote:
| I will sometimes succumb to drip pricing for the reasons given
| (already received service, already done research and made
| purchase choice, etc) but I remember and avoid giving them repeat
| business.
|
| I don't have time for scammers. Best remedy is to cut them out of
| my life.
| mox1 wrote:
| Unfortunately you are in the minority, in general these hidden
| or drip fees increase revenue[1].
|
| 1. https://therooster.com/articles/stubhub-experiment-shows-
| tha...
| civilized wrote:
| Doesn't seem to address the long-term impact. Only shows that
| people will pay what is asked in the moment, which I don't
| dispute.
| vr46 wrote:
| In America. This would not fly in Europe, I hope. Pretty sure
| menus have to be displayed out front with full pricing and
| service charges have their own rules.
| tialaramex wrote:
| Specifically it's illegal under EU rules. The priority is that
| the customer needs to know the final cost up front. You can add
| a surcharge for something customers can choose, e.g. customer
| wants delivery even though they walked into the store and could
| take the product with them, but the EU has repeatedly told
| vendors to knock it off with bogus surcharges that in practice
| just increase the price for all customers, and is currently
| fighting ticket companies for various "dark patterns" like
| "optional" surcharges where the opt out was some tiny
| unobtrusive text no normal user clicks.
| nickthegreek wrote:
| Wouldn't fly in much of America either. Try this in the midwest
| and I'm pretty sure your restaurant would be closing in weeks.
| duxup wrote:
| >In America.
|
| America is a big place, so is Europe. I wouldn't expect this to
| fly in a lot of places in America either. I've seen a place in
| America where they tried it and it failed.
| flumpcakes wrote:
| In Europe it is illegal to sell things without tax and fees
| included (unless it is B2B but they still include VAT listed
| next to the non-VAT price) so they couldn't even try this.
|
| Saying that I have started seeing gratuity automatically
| applied to some of my bills... So perhaps it's not as illegal
| as I thought...
| vr46 wrote:
| I wrote the above and then I thought about Ticketmaster and
| the other members of this cartel of shitcreeps and I
| remembered the booking fee, the insurance fee, the print-at-
| home fee (the you gotta be fuckin' kiddin' me fee) and was
| thankful we weren't allowed easy access to guns because this
| is the sort of nonsense that leads to mild-mannered
| individuals turning to ultra-violence.
|
| Online, you can get away with (figurative) murder.
| blfr wrote:
| I had a sneaky service charge like that (10%) added in a bar in
| Vienna (Austria, EU). Asked them to take it off, and they did,
| but the attempt was certainly made.
|
| Many other places add it routinely and have it listed in their
| menus. Not just for parties of 6 or more, but two guests.
| ok_dad wrote:
| I have had the exact same T-Mobile account and plans for more
| than 10 years now, and I have seen my monthly bill go from ~$82
| to ~$86 today because of additional fees. The bulk of my plan has
| been the exact same, just additional or increased fees for the
| extra $4. It's not much money, but it's the principle that they
| can adjust my costs upwards without me consenting, essentially
| forever, that pisses me off.
| bojangleslover wrote:
| I stayed at a hotel last summer which charged an "urban fee"
| voakbasda wrote:
| Boost Mobile did this recently when my wife and I switched cell
| carriers. They advertised a $30/month/line plan (after a 3-month
| introductory period at an even lower price), but we are now
| paying closer to $45. This has pissed me off enough that I want
| to look for another carrier, but this seems to be SOP for this
| industry. Telcos behave like nothing less than a criminal cartel,
| so I was hardly surprised by this play. Nice to know it has a
| name.
|
| Another comment here pointed out that the FTC is aware of this
| practice and has solicited comments from the public. Quoting from
| their linked article on `ftc.gov`:
|
| > FTC Chairman Jon Leibowitz asked consumers to share their drip
| pricing stories with the FTC. Consumers can call us at
| _1-877-FTC-HELP_.
|
| I gave them a call, and the first thing the automated system
| informed me is that one can file a complaint online:
| https://reportfraud.ftc.gov/
| jrochkind1 wrote:
| I am very impressed that my Cricket bill is what they say it
| would be -- inclusive of taxes even. They say $25, $25 is what
| my card is actually charged, total! I almost couldn't believe
| it until it happened over and over again.
|
| So it's not actually industry-wide... and hopefully even serves
| as a differentiator?
| abawany wrote:
| Most prepaid vendors afaik seem to offer a tax-included price
| - two examples are Visible and Mint.
| post_break wrote:
| Visible is $30 all in.
| ericmcer wrote:
| The same happens with my ISP. I just call customer service and
| tell them I want to cancel. They offer me a significantly
| better price for a year, I take the new price and after the
| year it goes up again and I call to cancel again.
| myself248 wrote:
| Yup, once a year like clockwork. Call the ISP, play a game of
| brinksmanship to avoid being taken to the cleaners.
|
| Meanwhile my conflict-averse friend is paying $94/mo for less
| bandwidth than I get for $25. It's psychological
| discrimination, is what it is.
| michaelmrose wrote:
| There is no right for the timid to receive as much as the
| bold. Your friend also does equally poorly in salary
| negotiation. $25 doesn't keep the lights on and there are
| far more of your friend than there are of you ergo you
| ought to be careful for what you wish for because fair
| pricing looks a lot more like you and your friend both
| paying $94.
| idiotsecant wrote:
| Easy there, Ayn Rand. We can have sane pricing practices
| that don't require carny-level negotiation of each
| individual service every 6 months.
| bryanlarsen wrote:
| Fair pricing would result in reduced profits for the ISP
| otherwise they wouldn't do it.
|
| Therefore consumers would benefit on net from fair
| pricing. Certainly some hard negotiators do benefit from
| discriminatory pricing, but their gains are less than the
| losses incurred by those who aren't.
| voakbasda wrote:
| I am extremely envious, as my local/rural ISP has a
| monopoly in the area. I am paying $100/month for a 20Mbit
| DSL line, because there is no competitive pressure to
| upgrade.
| kjksf wrote:
| Starlink?
| py1 wrote:
| Your conflict-averse friend might want to check out Trim.
| They negotiate lower bills and split the savings with you
| (can't say I've used it myself).
|
| https://www.asktrim.com/
| TuringNYC wrote:
| My favorite is when wireless carriers can charge a "Regulatory
| Recovery Fee", which is basically part of the price, but can
| magically change and magically appear on your bill. The fact
| that the FTC is fussed about free chat apps rather than
| wireless carrier practices in the US is obscene.
| myself248 wrote:
| You know it doesn't have to be one or the other, right? They
| can care about both?
| claytonjy wrote:
| They have limited resources, so caring about one they don't
| currently care about necessarily removes resources from
| something they currently care about.
| TuringNYC wrote:
| Regulatory recovery fees have been around for over 20yrs in
| the US. Sure, the FTC _could_ tackle both, but they 20yrs
| have gone by, and you still cannot actually get the final
| price for a wireless contract in the US until _after_ you
| sign up for a 2yr plan.
|
| Instead we're focusing on chat apps which were born in the
| past decade, require no 2yr plans, and for that matter,
| dont even cost money and have 50 free competitors.
|
| Great prioritization.
| dcdc123 wrote:
| T-Mobile plan prices are inclusive of all fees and taxes.
| renewiltord wrote:
| Interesting. I used to either go to Peets or Starbucks, and after
| a while exclusively the latter because of the annoying Peets tip
| thing which I never know what to put on. Is a $2.5 Americano a $1
| tip? Who the hell knows? Anyway, I eventually stopped going to
| Peets. Then a year passes and Starbucks started this shit. The
| local workers do that embarrassed "and there's a new extra button
| you have to hit" thing, but it was just a bit more annoying and
| now I just use the Nespresso pods at work. We just got a bunch
| more of them.
|
| My colleagues just use the app which doesn't involve that
| interaction and then they go pick up.
|
| It's probably a strange pet peeve of mine, but having to think
| about whether I'm disappointing this service worker or being
| impolite to them or pick the right price or whatever is costly
| enough that I'd rather just not interact with them.
|
| It's also why I like the market delis, Chipotle, and Sweetgreen
| so much. You just show up, grab what you want, pay, and walk out.
| Smooth experience.
| TehShrike wrote:
| When I go to Starbucks now I always order in the app first and
| pick up at the counter, even if I'm already there.
| no_wizard wrote:
| I've never been prompted to tip at the Starbucks drive through
| in my area. I pay using the app after loading up the gift card
| (you get more stars this way).
|
| I'm very much tired of the explosion of tipping culture though.
| Now fast food wants me to tip workers. This was definitely not
| the norm when I was growing up, or even pre COVID, and as far
| as I'm aware, they're all hourly workers that started making
| pretty good wages in due part thanks to staffing shortages
| (McDonalds was hiring for 18-20 USD an hour, pretty big
| increase)
|
| I feel like service industries and restaurants are doing
| anything they can to push costs onto the consumer without
| raising "official" prices. Like they all employed the same
| sociology consultants and they discovered what social levers
| they can instrument to get people to pay more without "paying"
| more. I been seeing these "economic recovery fees", "COVID
| safety fees" and other nonsense too.
|
| I eat alot more at home now.
| gpvos wrote:
| Is this even legal, unless it's marked very clearly on the menu?
| Also it's an excellent way to make sure you have no repeat
| customers.
| idopmstuff wrote:
| What really gets me at restaurants is that they often don't
| disclose this on the menu up front. I've started taking pictures
| of menus when I eat out, so when the bill comes and there's a 4%
| surcharge, I can be sure that it was not disclosed.
|
| I think if you disclose it, it's annoying but hey, free markets
| and all that. If you don't disclose it and charge people extra, I
| think that's just downright dishonest.
|
| The upside is that they will take it off 100% of the time - the
| waiter will almost always do it, and on the rare occasion that
| they have to get a manager, the manager will always do it. I
| never bitch at the waitstaff about it, but if they make me talk
| to a manager, I absolutely bitch at the manager.
| monksy wrote:
| You should be sending the pictures of the reciept and the menu
| to your attorney general. Typically hidden non-tax fees are not
| legal if you never mention it early on.
| idopmstuff wrote:
| Honestly, the cost/benefit ratio isn't just there. Leaving a
| one star review on Yelp is both faster and probably more
| likely to have an impact on the restaurant.
| monksy wrote:
| Those get burried, and maanged out by social media
| marketers. Also it doesn't stop the behavior as quickly.
| Those people are defrauding the people who go there.
| adamwong246 wrote:
| All the more reason to stay home and cook your own food.
| [deleted]
| anigbrowl wrote:
| Great analysis. Adversarial pricing/information strategies are
| offensive and represent a form of cognitive theft from the
| public. I greatly resent the fact that the advertised price of
| goods and services in many US jurisdictions is simply not
| reliable because sales tax is typically not included.
|
| If a vendor wants to display information at the point of sale or
| on a receipt about how X% of the price consists of direct taxes,
| I have no issue with that. But having to pre-emptively apply it
| to every price signal or budgetary allocation adds a non-
| negligible overhead to the detriment of consumers. Consider a
| person doing grocery shopping on a limited budget, say $50.
| Before entering the store, the consumer must mentally reduce the
| $50 in their pocket to $45 (if sales tax is 10%) and then keep
| that limit in mind while shopping, in addition to evaluating
| product value by per-unit cost (which some retailers display
| clearly and others don't), nutritional content, coupon or
| discount offers, and much else.
|
| For utilities and many other services, the opacity level rises
| drastically, making budgeting substantially more difficult. Add
| in the fact that pre-payment for things like phone plans often
| costs more than recurring charges, punishing those who try to
| manage limited or uncertain cash flow with thrift. And the people
| most likely to struggle with economic insecurity are the least
| educated.
|
| In other countries where this is not the norm, prices of many
| goods seem high and disposable income correspondingly looks a lot
| smaller. But if you see something you want to buy advertised for
| EUR100 and you have EUR100 in your pocket, a winner is you.
|
| A few US businesses take a different approach or clearly signal
| '$X out the door' on sales adverts, and I try to make a point of
| thanking them for the practice as well as just giving them my
| money. I think it's important that they get positive feedback.
| NotYourLawyer wrote:
| That's ridiculous. Refuse to pay it, and put the restaurant on
| blast on social media.
| rags2riches wrote:
| "I wanted you to know I apply a 50 per cent After the Fact
| discount to all my meals. The details are on my homepage."
| itronitron wrote:
| "Click accept to continue"
| jimt1234 wrote:
| IMHO, the larger goal of "drip pricing" is breaking down the
| association between products and their price, so that,
| ultimately, the price of a product isn't what consumers are
| willing to pay, but how much money a company decides to charge.
| Confused/powerless consumers isn't a bug, it's a feature of the
| modern consumer economy.
| MDWolinski wrote:
| The concept of tipping is for "tipped" positions in restaurants.
| Someone in a Tipped position earns far less then minimum wage,
| which is made up by customer Tips.
|
| So this leads into my frustration with the proliferation of
| tipping, which seems to have started at Starbucks (edit: at least
| that's where I first saw it occurring for counter services), is
| someone working at Starbucks making tipped wages or at/above
| minimum. If it's the latter, then they shouldn't be tipped except
| in extraordinary customer service situations.
|
| It would be interesting to see how tips in restaurants that have
| drip pricing have changed since the implementation of them.
|
| All that being said, I love in France (and I'm sure other parts
| of Europe) where there's a service charge added to each bill and
| that's it. I can leave some extra coins if I wanted to, but
| otherwise additional tips are expected. There, wait staff are
| paid a livable wage.
| itronitron wrote:
| Our family went out to eat a nice restaurant over the holidays
| and our bill had the '20% economic recovery fee' tacked on at
| the end. Naturally we didn't leave a tip and were happy to
| return a few days later to repeat the process.
|
| I'm usually happy to tip at restaurants, and if there is any
| surcharge on the bill like this then I just consider it the
| tip, as they often tack on for large groups.
| JoeAltmaier wrote:
| Not tipping your waitstaff? That's cruel - that's part of
| their pay, which they need to get to minimum wage. Expect to
| be treated like dirt next visit. I would.
| itronitron wrote:
| Waitstaff should expect that any surcharge, aside from
| taxes, will result in a lower tip especially because those
| surcharges are usually described as tips on the bill.
| Whether or not they are actually distributed as tips by the
| manager isn't my problem.
| reeckoh wrote:
| Regardless of your perception of fairness, you should be
| aware that waitstaff usually remember repeat customers
| who never leave a tip.
|
| It might not be a great idea to frequent the place if
| that's your chosen form of social protest.
| djkivi wrote:
| They were treated like dirt on this visit--being asked to
| pay an unexpected 20% extra.
| lotsofpulp wrote:
| > which seems to have started at Starbucks (edit: at least
| that's where I first saw it occurring for counter services)
|
| In my experience, it existed before in the form of tip jars (in
| NYC area), but really blew up when tablet point of sale systems
| like Clover came into the picture.
|
| They earn a percent of the transaction, so adding a simple
| option to increase the amount of the transaction is a no
| brainer for increasing profits. And the act of actually having
| to press no tip is better at guilting people than simply being
| able to ignore a tip jar.
|
| And then the point of sale providers got even more greedy and
| removed the no tip option, and started making it so users had
| to press "custom tip" in order to tip zero or otherwise
| increase the friction of not tipping.
| gnicholas wrote:
| > _They [Clover] earn a percent of the transaction, so adding
| a simple option to increase the amount of the transaction is
| a no brainer for increasing profits. And the act of actually
| having to press no tip is better at guilting people than
| simply being able to ignore a tip jar._
|
| I have wondered about this as a possible motive. I assumed
| that shops paid a monthly fee, or perhaps a per-transaction
| fee. But they're paying based on gross revenue? Do all POS
| systems work this way?
| password11 wrote:
| I would assume all POS systems have to take a percent cut,
| given that they clear credit card transactions. They have
| to at least take 2-3% to cover the cc transaction fee.
| gnicholas wrote:
| Oh sure, I figured they pass that charge through. But
| even that charge is not a straight percentage, is it? I
| always thought it was a percentage plus a constant.
| woodruffw wrote:
| Every payment processor that I know of takes a percentage.
| The structure might vary (e.g. percentage cliffs based on
| revenue), but it's never fixed on a monthly basis.
|
| (So yes, they're incentivized to introduce friction to the
| tipping flow -- it always means more money for them.)
| password11 wrote:
| There is obviously social pressure against pressing "No Tip".
| I feel it.
|
| But then I remember that a tip is for good customer service.
| Starbucks didn't provide me any customer service, they simply
| transferred the coffee from their vat into my cup. At which
| point I can feel justified in declining.
|
| I guess they're taking advantage of people who aren't
| familiar with this view of tipping, which I'd argue is the
| standard view in the U.S.
| MDWolinski wrote:
| Pre-Covid, wife and I went and tried a Grilled Cheese place
| in town that had been open for at least a year. As we were
| checking out on the tablet they had, my wife asked something
| about the Tip prompt on it. The cashier said, "Don't worry
| about it, the tips just go to management."
|
| So, makes me wonder at every other place, how well the tips
| are distributed.
|
| The other area I have an issue with (although I still tip
| here) is with my barber. She owns the business and she's the
| only one I go to. Technically speaking, she's keeping all the
| profit, so is a tip still warranted?
|
| My water delivery company added the ability to add a tip for
| the delivery driver. I'm waiting for the county trash
| collection to offer the same option.
| crazygringo wrote:
| Were tip jars common in NYC before Starbucks popularized
| them? I don't remember them at all but maybe it depended on
| the type of place?
| lotsofpulp wrote:
| I would say they were common enough per my memory of 2000s,
| certainly not ubiquitous like the POS tipping options
| today.
|
| It was common enough to be part of Seinfeld, at 1m10s:
|
| https://youtu.be/OOZn95g2RDE
|
| However, I do not feel like there was any cultural
| expectation of tips for counter service. Or I did not
| notice because I never used cash anyway.
| crazygringo wrote:
| Oh that's a great catch, and that episode was 1996, so
| wouldn't have been a response to Starbucks.
|
| Now it's really got me wondering how far back those
| plastic tip buckets at mom and pop shops like pizzerias
| and deli counters go.
| dqv wrote:
| It would be nice to have bundle reform that requires all prices
| to be listed as taxes-and-fees-inclusive here in the US. Ok, it's
| not going to happen federally, but I'd at least like it where I
| live.
|
| Changing prices is already regular maintenance, so the idea that
| this would place a burden on businesses is BS. If they have
| metadata at the cash register to know how to tax different items,
| they can have it at the label printer too. And for ecommerce,
| it's even easier.
|
| As to the wellness fee, I would be way more receptive to the 20%
| increase being included in the menu prices with a note about what
| that 20% does.
| phpisthebest wrote:
| >>It would be nice to have bundle reform that requires all
| prices to be listed as taxes-and-fees-inclusive here in the US
|
| No no no no
|
| Taxes should be listed for atleast 3 reasons
|
| 1. The company is not paying the tax, you are. You owe the tax
| not the company, the company is merely collecting the tax for
| the government. In many states the company is paid to collect
| this tax on the governments behalf. If the tax was not
| collected at time of purchase you still owe the government the
| money
|
| 2. Hiding taxation is never a good thing, Taxes we pay should
| be transparent to everyone as they are extractions from the
| economy and we should be fully aware of the amount of money the
| government is stealing errr extracting from us at all times
|
| 3. Tax increases are blamed on the merchant if they are hidden
| in the price instead of on the government where they belong,
| this makes is politically easier to raise the sales taxes if it
| is all hidden from the consumer. If a state goes from 8 to 10%
| people will notice that tax went up instead of the price. This
| is one of the reasons why of you look historically gas taxes
| have increased far more than the sales tax rate, because gas
| taxes are hidden into the price of gas where sales taxes are
| not.
| hyperman1 wrote:
| Here in Belgium (and most of Europe), we basically do both.
| Each line on a bill has 3 numbers: the untaxed price, the tax
| or tax rate, the taxed price. There are also 3 totals.
| yamtaddle wrote:
| So make 'em include the tax amount and percentage in big
| print on the receipt or alongside the price on the price tag
| at some percentage the size & weight of the price itself.
| Both problems solved.
|
| Paying a different price at checkout than what was on the tag
| is dumb and provides cover for exactly this kind of fiddling-
| with-the-price crap.
| rockinghigh wrote:
| You can include the tax in the final price and show the
| breakdown. That's how it works in the rest of the world.
| hansvm wrote:
| Hypothetically, what do you think about requiring a big, up-
| front total and a high-level cost breakdown (section numbers
| for tax codes, overall material cost, amortized facilities
| cost)?
|
| To some of your points:
|
| 1. Isn't super important because on the <<1% of sales that
| could happen that way they're required to inform you of your
| tax burden.
|
| 2. Break it out as a line item. Bold it. Maybe a bit more
| transparency would help with the pattern of stores raking in
| record profits when any upstream supplier has a minor price
| hiccup.
|
| 3. Having to memorize the tax rates in every city for every
| class of goods and apply those accurately on the fly doesn't
| benefit anyone unless it finally pisses off enough people to
| turn our mess of a system into something simpler. Displaying
| the actual tax rate on the receipt should more than suffice.
|
| The thing that worries me about the pattern of tacking on
| crap after a total had already been agreed to is that it
| conditions is to accept that as just something that happens
| once in awhile. Like how SF restaurants started tacking on a
| fixed percentage to cover employee health benefits when that
| law passed. You'd sit down to a meal, choose what you're
| going to eat at least partially based on the price and
| expected tip, and find out after the meal that they expect
| you to pay some amount greater than what was listed and
| societally accepted at the time -- and critically, on average
| it's a much greater fee than is actually required to pay the
| offending tax. That particular instance has gotten a little
| better since at least they usually have small-print signs
| informing you of that fact now, but it repeats itself in car
| dealerships making up line items passing on ordinary costs of
| doing business to consumers as if they were collecting
| ordinary sales tax, in toll companies separating out an
| additional fee for the envelope they're using to send you
| your bill, ....
| phpisthebest wrote:
| I dont think simply putting on the reciept is a solution to
| #3, because people internalize pricing and make the choice
| to buy before the transaction. it would only work if the
| before Tax and After Tax price was displayed before
| purchase.
|
| Anything less is still hiding the taxation IMO
|
| Also I am intrigued by the people that say they are "Having
| to memorize the tax rates in every city" and "apply those
| accurately on the fly" I am not sure I have ever in my life
| needed to that? Why would you need to calculate that on the
| fly? Unless you are buying a big ticket item costing
| thousands of dollars then the tax should not be a factor on
| if you are going to buy X or not so what purpose would it
| have to calculate it in your head like that?
| eadler wrote:
| I like how the UK does it. Total final price is the one on
| the sticker but tax is listed on the receipt. Something like
|
| Sticker : $100
|
| Receipt
|
| Price: $92 Tax: $8 Total: $100
| [deleted]
| olliej wrote:
| The important thing about the bs "fair wage fees", is that
| because they're not tips or anything protected the employer has
| no legal obligation to pass it on to the staff. Which is the
| point.
| crazygringo wrote:
| Note that drip pricing for restaurants (e.g. 10-20% non-tip
| surcharge) is illegal in many jurisdictions (if not
| "conspicuously advertised" before eating), but some restaurants
| try to do it anyways (claiming the policy is "conspicuously
| advertised" on the last page of the menu, or a tiny sign behind
| the bar).
|
| Sometimes you can just refuse to pay it and they'll back down
| because they want a repeat customer more. Sometimes they'll
| insist, but you can still just... not pay it, if you don't plan
| on going back. It's not like they're going to call the police,
| and you're paying the main bill.
|
| Unfortunately, it's not infrequent for restaurants to also
| withhold any unpaid part of the bill from a server's tips. That's
| usually illegal as well, but most servers would rather keep their
| job than complain. So you might think you're not paying the
| restaurant, but then it's the server who suffers.
|
| In other words, literally everything about this sucks.
| lolinder wrote:
| > Sometimes they'll insist, but you can still just... not pay
| it, if you don't plan on going back. It's not like they're
| going to call the police, and you're paying the main bill.
|
| This only works if you have enough cash on hand to cover the
| main bill or you're able to be _really_ pushy and get them to
| run only the main bill on the card.
| crazygringo wrote:
| Yup, you definitely have to be willing to waste 10+ minutes
| of polite arguing and be willing to insist they run only the
| main bill or you'll walk out without paying anything at all.
| Which in many (most?) social situations, it's not worth
| doing. But if you're willing to take a moral stand against
| sneaky surcharges, maybe you care enough.
|
| Again, literally everything about it sucks.
| evancox100 wrote:
| Restaurant down the street from me also has a 20% surcharge added
| but they explicitly tell you a tip is not expected. Asking for
| both is just nuts!
| [deleted]
| Dowwie wrote:
| Contractors have been doing this for decades. Here are two
| examples of the scam.
|
| The roof of your property needs replacing. You call a few roofers
| to come by and give an estimate for work. You choose the cheapest
| roofer, who uses the same materials as the others and has been
| allegedly in the family-run business for the last 125 years.
| After the first half of day's work, the shingles of the old roof
| were removed. The proprietor contacts you and gives you bad news
| that there are several sections of wood that rotted away and they
| recommend you not apply new shingle to it as it will never
| fasten. It will cost additional to replace these parts,
| naturally, and the cost ranges from hundreds to thousands of
| dollars. The problem with this situation is that there is always
| wood paneling that needs replacing. You never just replace
| shingles without replacing a few wood panels.
|
| The next scenario involves masonry. The limestone steps of your
| outdoor stairs is cracking and the brick needs re-pointing. You
| bring in a few contractors to give estimates for the repair work.
| Once you've contracted work, at the end of the first day you are
| contacted by the proprietor who informs you that there is nothing
| but sand holding your stairs up and they cannot work with sand.
| You have to rebuild the stairs, laying concrete for each step.
| Only then, can limestone steps be safely installed. It will cost
| several thousands of dollars more for this work.
|
| Both contractors engage in drip pricing, waiting for you to be
| along the way with their work, leaving you to decide whether to
| stop the project, accuse you of breach of contract, and exploit
| your vulnerabilities for not having a roof or stairs. Both roof
| and stairs projects required work that the contractors were not
| forthright about. Both gave a partial price for estimates and
| wait to have you over a barrel before you pay the full amount.
| lxgr wrote:
| This definitely sounds bad, but at least in custom services, I
| can imagine scenarios where it's not possible to give an
| accurate estimate before starting the actual work (and already
| incurring cost in the process).
|
| There is just no justification at all for goods and services
| with a uniform sticker price, such as a meal in a restaurant.
| If you can program it into a POS, you can print it on the price
| tag.
| davemp wrote:
| In my state roof contractors are required to give the per
| board price for replacing roof decking in the estimate
| newaccount74 wrote:
| An honest contractor tells you ahead of time.
|
| They'll say, this is how much it costs to replace the roof
| tiles, here's how much it would cost to replace the framing
| if necessary. It's not like rotten wood under the roof is a
| complete surprise to anyone.
| JamesSwift wrote:
| Most roof estimates also include an "assumed 20%
| replacement" (or whatever) for unseen issues. At least mine
| did the 1 time I did it.
| pjsg wrote:
| I always object to US retail adding Tax to the price of the
| items. In the UK (and I expect Europe) the price on the shelf is
| the price that you pay. VAT is included.
|
| In the US, you walk into a store and have to become an expert at
| understanding local taxes in order to figure out how much
| anything costs. Hotels often have four of five extra fees tacked
| on.
|
| I'd like "The price you see is the price you pay" to be the rule.
| myself248 wrote:
| Most places in the US, the local tax is the same statewide. Not
| in Ohio, where it can vary by township, sometimes across
| invisible boundaries. I once attended a large flea-market where
| such a boundary cut through the fairgrounds. Taxes were
| different on one side of the line than the other.
|
| It's so bad that Ohio actually has a mobile app that uses your
| phone's GPS to figure out which jurisdiction you're in and show
| the applicable tax rate.
|
| If I say mean things about Ohio from time to time, this is part
| of why.
| lxgr wrote:
| It often even varies by item, or there are weird
| incentives/carve-outs for some products.
|
| For example, shoes are sales tax free in NYC (if they're less
| than $110). This can mean that the difference between a pair
| for $109 and one for $111 is close to $10.
|
| When grocery shopping, I'm always surprised which items are
| taxed and which are tax free. Other than most (but not all)
| produce and basics like pasta, bread etc. I'd consider
| staples usually being tax free, I haven't been able to detect
| any underlying at all so far.
| rockinghigh wrote:
| Most restaurants and companies know which sales tax rate
| applies to you. They could include it in their prices.
| barbazoo wrote:
| > I once attended a large flea-market where such a boundary
| cut through the fairgrounds. Taxes were different on one side
| of the line than the other.
|
| Does this matter though? Even if the tax is different from
| one stall to another, they could still publish a price that
| includes tax.
| crazygringo wrote:
| _They_ could, but a lot of prices are set by national
| chains. They 'll advertise a nationwide or statewide price
| on commercials, website, etc., so they _can 't_ include
| taxes.
|
| Because of this, nobody includes taxes, even if they can,
| because people _expect_ the price not to include tax. If
| you set your price to 8% higher but it includes tax, a lot
| of people will just not buy it because they think it 's too
| expensive, because they assume tax isn't included.
|
| The main exception seems to be certain trendy coffeeshops
| over the past few years, where it's become a thing to have
| whole-dollar prices that include tax. (Part of it might be
| they just don't want to deal with coins.)
| DeRock wrote:
| Same in California, it varies by county and city:
| https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx
|
| Obnoxious to keep track of.
| jldugger wrote:
| > Most places in the US, the local tax is the same statewide.
|
| Is it? Kansas[1] has the same setup:
|
| > Q:What is the sales tax rate in Kansas?
|
| > A: The state rate is 6.50%. However, various cities and
| counties in Kansas have an additional local sales tax.
|
| I feel like I've seen posts on HN in the past about how hard
| it is for online retailers to properly figure sales tax and
| should outsource the lookup to <insert startup here>.
|
| [1]: https://www.ksrevenue.gov/faqs-taxsales.html
| post_break wrote:
| In the US when you buy a vehicle you pay the tax on it. Every
| time. It's ridiculous.
| rqtwteye wrote:
| "I'd like "The price you see is the price you pay" to be the
| rule."
|
| Totally agree. I don't care what other fees or taxes go into
| the price. They are all cost of doing business. Just wait until
| the baker charges you extra for the flour and yeast that went
| into the bread.
| duxup wrote:
| Hotels and some things are a huge mess.
|
| But generally your random consumer buying a random widget has
| some idea about what taxes are involved and roughly what to
| expect when they buy specific consumer goods / the machine
| tells them what to pay.
|
| It's complex if you want to do the math and get the exact
| number each time, but for most transactions it's a fairly small
| amount / not something you need to think about / need to know
| the exact number.
|
| If I go pickup a burrito I'm not worrying about if it is $10 or
| $10.25.
|
| If I wanted to worry about that it is possible to figure that
| out without knowing all the taxes myself.
| lxgr wrote:
| But the vendor needs to figure out the exact number anyway at
| checkout! It's not like they get to avoid the calculation
| effort this way.
| lotsofpulp wrote:
| In my experience, hotels show total cost prominently. Go to
| Marriott/Hilton/Hyatt/IHG/choice/Wyndham websites, and before
| you can reserve, it will show you total cost and list
| potential parking/pet/resort/other fees.
| hdjjhhvvhga wrote:
| In some countries it would be illegal. If you haven't seen the
| additional fee before ordering and they mention it only
| afterwards, it's a fraud. Personally, I can't imagine I would pay
| it. Yes, I don't shy away from a confrontation.
| JTbane wrote:
| It ought to be illegal, I've went to a take-out place that had
| a tiny note card taped to the counter where no one EVER looks
| before ordering: "optional" COVID surcharge.
| duxup wrote:
| A local restaurant tired a wellness fee (it was actually a small
| %) in my area (Midwest USA), got a ton of bad press, traffic when
| I went by looked like it had dropped off significantly. They
| survived but according to the manager I spoke to only because
| they were owned by a restaurant group that had income from other
| restaurant without a wellness fee.
|
| They made a big public statement, emails, flyers, about reverting
| the fee and so on and eventually recovered.
| jasode wrote:
| A reddit thread made the front page with a similar example of
| surprise _" Economic Recovery Fee"_ added onto the restaurant
| bill:
|
| https://old.reddit.com/r/mildlyinfuriating/comments/10gowkx/...
|
| If a government watchdog like FTC doesn't stop this or a new
| explicit law that only allows _" total final price"_ clearly
| displayed before purchase, it means every type of business will
| want to play the "Ticketmaster-convenience-fees" game by
| creatively coming up with new fees.
|
| If businesses are trying to get more money, they should do it by
| _transparently raising prices_ instead of tricking people into
| paying hidden fees.
| silisili wrote:
| > If businesses are trying to get more money, they should do it
| by transparently raising prices instead of tricking people into
| paying hidden fees.
|
| Yup. This seems like a terrible long term strategy. If I'd
| eaten expecting $X, and the total is now $X + $Y, and they have
| the nerve to remind me it's not a tip, I'm probably not leaving
| a tip, and I'm -definitely- not coming back.
|
| Most cities are rather static in populace. This is a great way
| to see yourself out of business for a tiny short term profit.
| bryanlarsen wrote:
| Some restaurants get the vast majority of their business from
| tourists who would never be repeat customers regardless.
| Those restaurants might think they can get away with such
| fees.
|
| But those restaurants are highly dependent on Yelp reviews et
| al; such fees are a great way to get bad reviews.
| junon wrote:
| I would simply walk out. This shouldn't be legal. In every spirit
| of the law, this is malicious.
| jmugan wrote:
| Resort fees at hotels may not be the ultimate evil, but they're
| close.
| karaterobot wrote:
| Well, that made me irrationally angry, considering it's never
| happened to me personally. Has this kind of thing been tested in
| court?
| nhchris wrote:
| How is this not textbook false advertising?
| 27153 wrote:
| Looks like the FTC is aware of it but I'm not sure that there
| have been any regulations against it yet.
| https://www.ftc.gov/news-events/events/2012/05/economics-dri...
|
| According to Wikipedia there were some strongly worded letters
| sent to some hotel operators...
| https://en.wikipedia.org/wiki/Drip_pricing
| bradleyjg wrote:
| This is far worse than Airbnb. As annoying as the cleaning fees
| are, they are disclosed before you obligate yourself.
|
| A 20% fee only disclosed after you've already ordered and eaten
| is just fraud.
| benatkin wrote:
| Not to mention that you can search for AirBnbs that have lower
| cleaning fees.
| hadlock wrote:
| Once they started including cleaning fees on the regular,
| often for as much as a single night's stay, I've largely
| curtailed my use of the service, and have gone back to
| hotels. Very occasionally, like for an out of state wedding,
| especially out in the country where hotel options are
| limited, we'll still at least glance at airbnb type services.
| I used to really like airbnb but instead of undercutting
| hotels on price they're often significantly higher, along
| with significant risk of an unpredictable or even bad
| experience. Staying at a chain hotel virtually guarantees no
| unexpected issues and no unexpected charges or drama. The
| last experience I had with airbnb (two years ago) the host
| grilled me on why I wanted a last minute booking (pandemic
| staycation baby-moon). Was not thrilled with the experience.
| When you book with a hotel all they ask you is for your ID
| and if you want a king or two queen beds.
| benatkin wrote:
| A single night's stay is actually a great use of a cleaning
| fee, because the cost of cleaning can't be spread between
| multiple nights.
| idopmstuff wrote:
| The problem with AirBnb cleaning fees is that they don't
| disclose what's included in them. If you're going to charge me
| $500, fine, but it's not great when I show up and find out that
| you expect me to wash and remake the beds, power wash the deck,
| get rid of that wasp nest that's been there for a month and
| also assemble some Ikea furniture.
|
| These days I ask for a list of cleaning requirements before I
| book.
| spacemadness wrote:
| I don't think I've ever been asked to do laundry, but if I
| would have I'd refuse on principle since I'm paying an
| exorbitant cleaning fee already. These hosts can stuff it.
| adrr wrote:
| Airbnb should set standards. Some places make me do
| absolutely nothing like a hotel room. And some places make
| you wash the linens, dishes and sweep/vacuum the floors while
| paying $300+ for a cleaning fee. Probably why I now prefer
| hotels because i know what i am getting.
| idopmstuff wrote:
| Honestly, I'm fine with hosts charging whatever they want
| and asking guests to do whatever they want, as long as it's
| properly disclosed. If I show up and the house
| rules/cleaning requirements are more onerous than what's
| disclosed, I ought to be able to notify AirBnb and just get
| my cleaning fee refunded or somethin else slightly punitive
| to keep hosts honest.
| benj111 wrote:
| Just don't pay the fee. Or call the manager over and ask why
| they arent paying their staff properly.
|
| Companies only pull this stuff because they get away with it.
| Don't make it worth their while.
| adamc wrote:
| Unfortunately, for many people that ruins their night out. It
| is often more practical to pay it and never return.
| tommoor wrote:
| I'm not defending the restaurant as I hate this as much as the
| next person but I'm sure the fee was mentioned on the menu -
| probably in small print and this was omitted for the sake of a
| good story.
| happymellon wrote:
| That _is_ defending the restaurant.
|
| If it was tiny fine print then it was intended to be missed.
| bradleyjg wrote:
| If you're going to reprint the menu to add that, just bump
| the prices 20% and be an honest business.
| alistairSH wrote:
| This. The other industries mentioned might tack on fees at
| check-out time, but the service/product hasn't yet been
| consumed, so the consumer can back out.
|
| This isn't true with dining out, where you see a price list,
| order, eat, and then get a bill at the end. You can no longer
| opt to eat elsewhere. You either make a scene or pay the
| undisclosed fees. Restaurants should at least put a notice on
| the menu in a highly visible location, but even that isn't
| going to be foolproof.
|
| Really, this practice should be banned everywhere. As a
| consumer, I largely don't give a shit what expenses a vendor
| has; I only care about the final price. I can see an argument
| for disclosing regulatory fees, because as a resident/citizen,
| I can at least lobby politicians to change those fees. But,
| even that's a bit of a crap argument.
| mortenjorck wrote:
| If an establishment adds a 20% surcharge to a dining check,
| that's a tip, and generally considered to be on the higher
| end in the US. I would simply consider them to have chosen my
| tip amount for me and leave it at that.
| giraffe_lady wrote:
| > and generally considered to be on the higher end in the
| US.
|
| Maybe in 1998 but it's pretty much standard now.
| [deleted]
| alistairSH wrote:
| The restaurant in the article claimed the 20% surcharge was
| NOT a tip. :shrug:
| 9WwFaLaTtBDaoS wrote:
| [dead]
| jbirer wrote:
| A little assertiveness can go a long way. "I was not made
| aware of this fee, so I am only paying X" and walking away
| should work.
| tempestn wrote:
| You can only do that if paying cash. And if you do, what
| will effectively happen is that the money you intend to
| leave as tip will go toward the fee instead.
| chamwislothe2nd wrote:
| Unfortunately for everyone involved, the waiter is
| complicit in the fraud and no longer deserves a tip.
| jzb wrote:
| Yes, because as we all know, service staff have enormous
| power and dictate restaurant policy. This is why they're
| so highly paid and aren't abused at all by customers, for
| example. /s
| adamc wrote:
| Their only power is to leave. I don't like sticking them
| either, but it's true that they are complicit.
| unsupp0rted wrote:
| If I work for a company that I've seen screw over our
| customers on a daily basis, and enough customers refuse
| to pay my company, then I don't have a leg to stand on
| when I don't get my full salary all of a sudden.
|
| This is true whether I'm a developer, a ski instructor or
| a waiter.
| chamwislothe2nd wrote:
| As I said, for everyone involved it is unfortunate, but
| the majority of people without power still choose not to
| be complicit in fraud.
| drdec wrote:
| The server could have made sure they were aware of the
| policy before they ordered. Seems like the best way to
| make sure you get a tip to me.
| 9WwFaLaTtBDaoS wrote:
| [dead]
| MichaelNolan wrote:
| You should be able to do that with a card as well. They
| can't charge your card more than you authorize. (And if
| they did a call to the CC company will get it all taken
| care of).
| michaelmrose wrote:
| They can decline to charge payment for anything other
| than the full figure leaving you with the ability to walk
| out or pay. If you opt not to pay you are dining and
| dashing and subject to prosecution the fact that you
| offered to partially pay notwithstanding.
|
| Logically pay the bill then leave a negative review and
| never eat there again.
| 1000100_1000101 wrote:
| The advertised prices form part of a contract you're
| agreeing to. The drip fees are un-advertised extra
| expenses after the contract is signed and completed
| (you're fed). If you're willing to pay the agreed upon
| price, and they're unwilling to accept your payment, that
| should be their problem, not yours.
|
| They have violated the contract, added new fees after the
| fact. They have violated the contract, refusing to accept
| the agreed upon payment.
| MichaelNolan wrote:
| > If you opt not to pay you are dining and dashing and
| subject to prosecution
|
| Is that actually a crime? My understanding is that you
| can leave your contact info, walk out. I'm not aware of
| any cases where police have gotten involved in a payment
| dispute. I used to work in a law enforcement adjacent
| field, and when the topic came up, the cops said it's a
| civil dispute, not a crime.
|
| Edit - after searching online, there are a few cases of
| diners being arrested, though it seems the charges are
| always dropped. Also those cases involved posted notices
| of the fee before the diners ordered.
| lxgr wrote:
| It's still annoying, since they don't show up when you search
| on the map, as far as I remember.
|
| Mostly due to this, I've given up on Airbnb in favor of
| traditional hotel booking sites (specifically the one with a
| capital B). Many private apartments are also listed on them
| these days, and I value not having to play stupid pricing games
| more than the slightly higher availability on Airbnb.
|
| When changing the country to Europe (or currency to EUR?),
| listings even include taxes and local fees, allowing a true
| apples to apples comparison between offers.
| a_c wrote:
| First the tipping. Then the tipping after forced tipping. And the
| consideration is on whether to tip the tip or tip sans tip. Mind
| blown.
|
| Can you not pay the random additional charges on the bill? What
| are the consequences? In UK some restaurants charge an optional
| service charge and we are free to opt out.
|
| What happen to you if you accept a job offer and the employer
| deduct 12.5% from it because HR service fee? Both situations are
| taking money from your pocket with a hidden fee. Would the
| discussiom be "do I pay tax pre or post HR service fee"?
| grouchomarx wrote:
| I've seen this over and over in SF and now rarely eat out. Many
| friends and coworkers are taking the same approach, most of whom
| never used to cook at home. Scamming your customers 5, 10, 20% at
| a time doesn't seem like a great long term strategy
| UberFly wrote:
| Exactly. My solution is also to just not eat out. Like the
| article says though, it's unfair to the businesses that choose
| not to do this. Maybe the solution is to just not pay extras if
| places don't disclose all costs up front.
| time_to_smile wrote:
| > and now rarely eat out.
|
| That's the inevitable outcome of this type of behavior. Like so
| many startup's attempts to squeeze customers in the short term,
| it works for a small window of time but leads to longer term
| consequences that are never properly accounted for.
|
| For most tech workers an extra 20% on top of everything else is
| not _that_ big of a deal, but for anyone who saves up for a
| night out that can be a big upset.
|
| The only companies that can do this drip pricing and hope to
| get away with it long term are essential services without
| serious competition (for example telcos). All of the rest of
| these drip pricing schemes will come back to hurt companies in
| the long run.
| mihaaly wrote:
| I just wanted to say that this practice backfires with me.
| Those want to excercise such tactics better be in the 'deceive
| a large amount of persons once then go under and repeat' kind
| of business because they will never see me again. Assuming they
| could scam me once. Which is harder and harder by each passing
| occasions others give the liberty to themselves. Being tired of
| being scammed got me to reacting harsh even to a faint smell of
| such and make my stand. Especially when they try to wrap it
| into supposedly guilt triggering tactics like calling it Fair
| Wage fee, only to expose how unfair they are with their
| employees. Those wan't to engage in fair and transparent
| practices will meet my appreciation as it is so hard meeting
| such services I want to hang on to them and pay fair prices
| without forcing on me.
| floren wrote:
| https://www.sfchronicle.com/restaurants/article/Explainer-Wh...
| rqtwteye wrote:
| Same for me. I am feeling more and more that a lot of
| businesses are becoming more and more dishonest and are
| basically just trying to rip their customers off. I don't enjoy
| concerts, sports or restaurants anymore because of this and
| lately I also resent going shopping at places that have one of
| the tablet checkouts that tries to guilt trip into a 20% tip.
| One more reason to become cynical. As if the world isn't
| cynical enough already.
| chihuahua wrote:
| Showing one price on the menu and then charging a different
| price is deceptive and dishonest. I don't see how this
| creatively named fee is different from saying "the sandwich
| costs $10" and then later saying "actually you owe us $1000".
|
| I've basically given up on restaurants entirely. Even without
| ridiculous tipping and other surcharges, prices have gotten out
| of control. The food just isn't that great, and restaurant food
| is not known for being healthy, with excessive amounts of fat,
| sugar, and salt. The only function it fulfills is that I'm less
| hungry after eating it.
|
| So these days I just prepare my own food. It's better in so
| many ways: cheaper, healthier, faster, no risk of
| disappointment.
| aetherspawn wrote:
| In Australia it is simpler.
|
| The staff all get paid an award wage that is set by the
| government, and it is plenty, around $24/hr or more depending on
| age. This makes our food somewhat expensive: at least $20 for a
| sit-in meal, around $4.50 for a coffee.
|
| But what you see on the menu is what you pay and includes tax:
| tipping is not in our culture, and I have never seen drip
| charging here except on public holidays ("public holiday
| surcharge").
|
| Our consumer rights laws probably protect our right to walk away
| and not pay undisclosed drip charges, although it has never
| happened to me.
|
| --
|
| Admittedly, the award wage makes it difficult for newly
| established bootstrapped businesses to hire their first staff.
| For example, we were looking at hiring a graduate engineer, but
| the award wage was around $40/hr after benefits (superannuation
| etc), and then there is mandatory Work Cover insurance on top of
| that. Legally we can't hire anyone below this amount because Fair
| Work would have a field day suing us, so we put it off until we
| can afford to pay, but without financing the leap we are maybe
| stuck in a catch 22.
| Psychlist wrote:
| Not just that, it's a legal requirement that the price
| advertised is the price you pay. The ACCC will enforce this.
|
| It's why, for example, the supermarket ogliopoly have a "if
| it's mispriced it's free" policy, they got fined for inaccurate
| pricing and tried to turn it into a PR win.
|
| Airlines and ticketmaster are currently fighting to change it
| but now we have a less right-wing federal government again
| hopefully the ACCC will be allowed to do their job.
| jrochkind1 wrote:
| > at least $20 for a sit-in meal, around $4.50 for a coffee.
|
| That's actually currently pretty much true of the USA too,
| especially after recent inflation. Unless exchange rates make
| the dollar-for-dollar comparison inapplicalble.
|
| But either way, we're paying $20 for a sit-in meal too, but the
| servers are only being paid literally $3-$6 base rate plus
| tips, instead of your $24/hour. (Of course, depending on the
| restaurant, they may make $24 or more after tips... but it
| looks like _median_ after tips is more like $16 /hour, meaning
| half make more half make less...)
| angry_moose wrote:
| Its analogous to that in a lot of the US but the social
| pressure remains and is somehow getting worse.
|
| Where I live, waiters used to be exempted from the minimum wage
| laws, meaning tips were effectively their entire wage.
| Recently, my state removed the tipped employee exemption
| (meaning waiters earn minimum wage plus any tips) and nearly
| doubled the minimum wage.
|
| But, did the expectation to tip go down? Nope, its been
| shooting up from 15% to 20+% instead. I've been dramatically
| cutting back on how much I tip to <10%, which makes me rude and
| a jerk.
| wccrawford wrote:
| I thought it was already illegal to force a change of price after
| fulfilling your half of the deal? Unless the customer agrees to
| these fees before service, I don't think you can legally force
| them to pay it. If they do it without question, of course they
| can get away with it.
| jawns wrote:
| They likely have the sign posted in a place that is easy enough
| for diners to miss as they enter, but still prominent enough to
| fulfill legal requirements about giving customers notice of the
| fee.
| changoplatanero wrote:
| They should get the state attorney general to look into it
| Invictus0 wrote:
| Don't pay it! Tell the restaurant to remove the fee or you walk.
| You can hand the waitress cash for her tip directly.
| lotsofpulp wrote:
| Yes, do not sign the receipt if it includes hidden charges and
| hit them with a chargeback if they refuse.
| avitous wrote:
| Just say no. If the added fees are known up front, take business
| elsewhere. If they're only revealed after the fact, I would
| become That Ugly Customer, and they would never get my business
| again. If enough do this, then behaviors will change, especially
| if such businesses are retaliated against. As they should be.
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