Why do you pay fees?

Posted at 8:34 AM on April 7, 2010 by Bob Collins (9 Comments)
Filed under: Economy

During a discussion on Morning Edition, Cathy Wurzer asked me whether people will rebel against fees like the one that Spirit Airlines is threatening to charge for carry-on luggage. "No," I said. "Consumers are reluctant to use the power they have." Indeed, we make decisions every day on whether fees are worth paying for the service provided, while convincing ourselves that we have no choice.



Want to buy a Twins ticket online? It'll cost you extra to print it on your computer, using your ink and your paper, while saving the Twins the cost of postage and the cost of an envelope and the cost of printing a ticket because it's a convenience that Major League Baseball has decided you'll pay rather than picking up the tickets at "will call" or driving to a Twins outlet to buy the ticket.

It's that way with the current baggage fees, too. Airlines charge them because you pay them, especially if you're flying on business and you're not the one paying.

Renewing your license plate tabs in Minnesota online? Tack on an extra $1.75 "technology fee."

Fees also accomplish another less-publicized function. They prevent you from comparison shopping. Southwest and Delta, for example, might have roughly the same published fare to Chicago, but Delta costs much more because of the fees that Southwest doesn't charge. The price for a cellphone plan in the morning newspaper advertisement isn't the real price because cellphone companies add "regulatory fees." They're not, as many consumers expect, required fees by the government. Cellphone companies make them up and put them on a bill for no other reason than it's a way to increase the cost of their monthly plans without putting it in their advertised price.

But back to Ms. Wurzer's question. When's the last time you decided to go without something because of a "fee"?

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Comments (9)

with the license plate tabs, I'm not aware of any where else I can use a credit card to pay for my tabs other then online. As you pointed out yesterday Credit card companies charge a fee on the transactions, the state passes that fee on to you. Should less of my tab cost go to road work because I payed with a card vs. a check or cash?

At a local small store I shop at there is a sign "to help us stay in business and avoid fees please avoid paying with credit cards." fair enough, I only charge very large purchases there, the state is playing the same game with out violating the credit card processors agreement that says you can't put signs like that up.

Posted by Jon | April 7, 2010 9:25 AM

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I did not print out my own Twins tickets precisely because I would have been charged for doing so. It's not any more convenient to me to print them out myself than to wait a couple days for them to arrive in the mail. I do the same thing for other tickets that charge me more for self-printing.

Posted by Doctor Gonzo | April 7, 2010 9:25 AM

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The price is the thing, with fees or without them. If the price is too high, then I don't buy. If not, then I'm in.

Fees' absence just means that their charges are hidden inside the overall price of the good or service.

Its a 'six of one, half a dozen of the other' issue to me.

Posted by Joe Schaedler | April 7, 2010 9:40 AM

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I recently paid more for an airline ticket b/c the baggage fees were included in the ticket price. Just roll it in and leave me alone.

I also had my twins tickets mailed to me and was baffled why anyone would pay to print their tickets instead of having them mailed. And why the charge would be for the printing vs. the mailing when the team had to pay so ship it (and all the other useless things in the envelopes) to me.

Posted by SareenD | April 7, 2010 9:50 AM

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I believe those signs that are sprouting up about fees for credit card purchases under a certain amount actually violate the terms of service the merchants agree to when they sign their deals with Visa/Mastercard etc.

Posted by Bob Collins | April 7, 2010 10:01 AM

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Two tickets to 'Wait Wait Don't Tell Me' in June at the State Theater: $46 per ticket, $37 more in 'fees' through Ticketmaster. The phone transaction was all electronic so I didn't feel bad hanging up on hearing the grand total. It would sure be nice if the price charged were close to the price advertised.

Posted by Momkat | April 7, 2010 1:31 PM

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I just bought a $10 rollergirls ticket via Ticketmaster online (had an out of town friend show up; we normally have season tickets). Ticketmaster charged me $9 in fees (including a couple of bucks to print out the ticket) and another $1 in tax. If I had had time to drive down to the Roy and buy it, I would have - and next time I will.

I can't believe those jerks don't run afoul of scalping laws.

Posted by teej | April 7, 2010 2:47 PM

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About the Ticketmaster fees, I hate them. So I refused to pay them and just figured I'd stop by First Ave and buy my tickets in person. Too bad I kept forgetting or when I remembered, First Ave was closed. Last night I finally made it to the Electric Fetus (which I forgot was a ticket outlet...my own fault). Good news, I got my Trampled by Turtles tickets and save $20 in fees (for 5 tickets). Unfortunately, I was too late and 2 of the shows I wanted to get tickets for were sold out. I did recently pay over $152 for a pair $56 tickets. But that's because I knew tickets would sell out in hours, and I really love Conan O'Brien.

So I'm guess I'm saying there are trade-offs. And Ticketmaster will never go away as long as some people are willing to pay the fees to ensure they get tickets (and performers / sports teams keep using Ticketmaster to sell the tickets).

That 'tis all for now - Thanks for letting me share my story!

Posted by shleigh | April 7, 2010 5:44 PM

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Onion: American Airlines now charging fees to non-passengers

Posted by Jon | April 12, 2010 11:24 AM

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