Live data from Hacker News

Companies use drip pricing to overcharge consumers

passingtime.substack.com

141–150 of 425 posts

Re: Companies use drip pricing to overcharge consumers

#141

Earlier quoted context omitted.

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.

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.

Re: Companies use drip pricing to overcharge consumers

#142
post #120

Earlier quoted context omitted.

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.

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.

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.

Re: Companies use drip pricing to overcharge consumers

#143
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 €100 and you have €100 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.

Re: Companies use drip pricing to overcharge consumers

#144
post #57

Earlier quoted context omitted.

Unfortunately for everyone involved, the waiter is complicit in the fraud and no longer deserves a tip.

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

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.

Re: Companies use drip pricing to overcharge consumers

#145
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 restaurants and companies know which sales tax rate applies to you. They could include it in their prices.

Re: Companies use drip pricing to overcharge consumers

#146

Earlier quoted context omitted.

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.

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.

Easy there, Ayn Rand. We can have sane pricing practices that don't require carny-level negotiation of each individual service every 6 months.

Re: Companies use drip pricing to overcharge consumers

#147

Earlier quoted context omitted.

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.

The restaurant in the article claimed the 20% surcharge was NOT a tip. :shrug:

When I see a delivery fee that's a % I assume it's a tip and don't tip myself.

It's the same thing here. It's not my job to be fair to the employees. I'm generally a very fair tipper but if you put a % fee on my bill I consider it my tip. Most of the time it's less than I would have tipped regardless and I'm ok with that.

I also typically won't go back if a restaurant does this because I fundamentally disagree with it for all except large parties of people.

Re: Companies use drip pricing to overcharge consumers

#148
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.

Re: Companies use drip pricing to overcharge consumers

#149
post #133

Earlier quoted context omitted.

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.

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.

Most roof estimates also include an "assumed 20% replacement" (or whatever) for unseen issues. At least mine did the 1 time I did it.

Re: Companies use drip pricing to overcharge consumers

#150
post #23

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…

>>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…

You can include the tax in the final price and show the breakdown. That's how it works in the rest of the world.
Post reply on HN