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
Companies use drip pricing to overcharge consumers
41–50 of 425 posts
Re: Companies use drip pricing to overcharge consumers
#42Earlier quoted context omitted.
> 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…
> 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 payin…
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.)
Re: Companies use drip pricing to overcharge consumers
#43I 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.
Re: Companies use drip pricing to overcharge consumers
#44Boost 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…
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.
Re: Companies use drip pricing to overcharge consumers
#45Boost 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…
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.
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.
Re: Companies use drip pricing to overcharge consumers
#46Boost 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…
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.
You know it doesn't have to be one or the other, right? They can care about both?
Re: Companies use drip pricing to overcharge consumers
#47I 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 ru…
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.
Re: Companies use drip pricing to overcharge consumers
#48I 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 ru…
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.
Re: Companies use drip pricing to overcharge consumers
#49I'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
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.
Re: Companies use drip pricing to overcharge consumers
#50Earlier quoted context omitted.
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.
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.
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.