Companies use drip pricing to overcharge consumers • Hacker News Board

Re: Companies use drip pricing to overcharge consumers

#111

Post by chihuahua » Tue, Jan 24, 2023, 9:55 PM UTC

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

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.

Re: Companies use drip pricing to overcharge consumers

#112

Post by MichaelNolan » Tue, Jan 24, 2023, 9:56 PM UTC

michaelmrose wrote: post #103

MichaelNolan wrote: post #87

Earlier quoted context omitted.

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).

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.

> 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.

Re: Companies use drip pricing to overcharge consumers

#113

Post by jldugger » Tue, Jan 24, 2023, 9:56 PM UTC

myself248 wrote: post #48

pjsg wrote: post #43

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 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 th…

> 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 .

[1]: https://www.ksrevenue.gov/faqs-taxsales.html

Re: Companies use drip pricing to overcharge consumers

#114

Post by angry_moose » Tue, Jan 24, 2023, 9:56 PM UTC

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…

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.

Re: Companies use drip pricing to overcharge consumers

#115

Post by reeckoh » Tue, Jan 24, 2023, 9:57 PM UTC

itronitron wrote: post #90

JoeAltmaier wrote: post #82

Earlier quoted context omitted.

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.

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.

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.

Re: Companies use drip pricing to overcharge consumers

#116

Post by silisili » Tue, Jan 24, 2023, 9:57 PM UTC

jasode wrote: post #28

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-fee…

> 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.

Re: Companies use drip pricing to overcharge consumers

#117

Post by lotsofpulp » Tue, Jan 24, 2023, 9:57 PM UTC

crazygringo wrote: post #110

lotsofpulp wrote: post #25

Earlier 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…

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?

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.

Re: Companies use drip pricing to overcharge consumers

#118

Post by spacemadness » Tue, Jan 24, 2023, 9:59 PM UTC

idopmstuff wrote: post #97

bradleyjg wrote: post #4

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.

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.

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.

Re: Companies use drip pricing to overcharge consumers

#119

Post by gnicholas » Tue, Jan 24, 2023, 10:00 PM UTC

password11 wrote: post #38

gnicholas wrote: post #34

Earlier quoted context omitted.

> 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…

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.

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.

Re: Companies use drip pricing to overcharge consumers

#120

Post by monksy » Tue, Jan 24, 2023, 10:07 PM UTC

idopmstuff wrote: post #80

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 upsid…

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.