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Companies use drip pricing to overcharge consumers

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Re: Companies use drip pricing to overcharge consumers

#71

Post by a_c »

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"?

Re: Companies use drip pricing to overcharge consumers

#72

Post by aetherspawn »

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.

Re: Companies use drip pricing to overcharge consumers

#73

Post by tialaramex »

vr46 wrote: post #9

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.

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.

Re: Companies use drip pricing to overcharge consumers

#74

Post by flumpcakes »

duxup wrote: post #18
vr46 wrote: post #9

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.

>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.

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...

Re: Companies use drip pricing to overcharge consumers

#75

Post by itronitron »

MDWolinski wrote: post #22

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 minimu…

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.

Re: Companies use drip pricing to overcharge consumers

#76

Post by time_to_smile »

grouchomarx wrote: post #19

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

> 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.

Re: Companies use drip pricing to overcharge consumers

#77

Post by claytonjy »

myself248 wrote: post #46
TuringNYC wrote: post #29

Earlier quoted context omitted.

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?

They have limited resources, so caring about one they don't currently care about necessarily removes resources from something they currently care about.

Re: Companies use drip pricing to overcharge consumers

#79

Post by Psychlist »

aetherspawn wrote: post #72

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 (“publ…

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.

Re: Companies use drip pricing to overcharge consumers

#80

Post by idopmstuff »

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.

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