Companies use drip pricing to overcharge consumers • Hacker News Board

Re: Companies use drip pricing to overcharge consumers

#271

Post by illumin8 » Wed, Jan 25, 2023, 2:00 AM UTC

crazygringo wrote: post #84

Note that drip pricing for restaurants (e.g. 10-20% non-tip surcharge) is illegal in many jurisdictions (if not "conspicuously advertised" before eating), but some restaurants try to do it anyways (claiming the policy is "conspicuously advertised" on the last page of the menu, or a tiny sign behind the bar). Sometimes you can just refuse to pay it and they'll back down because they want a repeat customer more. Someti…

One thing I've noticed recently on 2 restaurant trips in the last couple weeks: The automatic tip calculations are wrong in the server/restaurant's favor. Most of us typically check the 20% option and don't double-check the math, but in the past these calculations were always done pre-tax. If your food came to $100 and you tipped 20%, the total would be $120 + sales tax.

Now, the last 2 times I've eaten out the automatic tip calculation was done on the post-tax amount. I live in Alameda county where the sales tax is over 10%, so this is a big difference. Not only that, the default tip options were something like 18, 20, and 25%.

The only reason I can see for restaurants to do this is that the minimum wage here is $15/hour, and if tips alone don't make that rate, the restaurant pays out of pocket because it is illegal for them to pay below minimum wage. This seems like yet another example of restaurant owners passing higher labor costs onto customers in a less than ethical way.

Has anyone else noticed a similar practice?

Re: Companies use drip pricing to overcharge consumers

#272

Post by LadyCailin » Wed, Jan 25, 2023, 2:04 AM UTC

spoils19 wrote: post #258

jgeada wrote: post #248

Earlier quoted context omitted.

They know how much to charge you at the till, therefore they know what price to put on the label. It is that simple. For webstores, require customer to disclose location so the right price can be computed; they have to do that when it comes to the billing page so it isn't novel work. Everything else is bullshit reasoning to get away with false pricing/false advertising.

Okay but what happens if the tax changes, do you really expect retailers to reprint their labels every few months?

Taxes change every few months? Anyways, yes, I expect them to reprint them if the price changes as well, which actually is liable to happen somewhat often. If you’re worried about paper waste, they make lcd labels too, which can be reprogrammed on the fly, so you can’t even make the “reprint” argument. It’s really and truly not an unsolved problem.

Re: Companies use drip pricing to overcharge consumers

#273

Post by pas » Wed, Jan 25, 2023, 2:04 AM UTC

phpisthebest wrote: post #61

dqv wrote: 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…

If the company is collecting the tax they owe it after the sale.

Yes it's a tax on consumption/commerce. There's no point saying it's paid by the buyer as there's no transaction without the seller either, and if there were no tax the seller were able to raise prices. (And likely the new market equilibrium would be somewhere between the two extremes, so it means both parties pay it actually.)

And as others mentioned in many places the law says the receipt has to show the applied tax, so it's absolutely not hidden.

Re: Companies use drip pricing to overcharge consumers

#274

Post by LadyCailin » Wed, Jan 25, 2023, 2:05 AM UTC

rockinghigh wrote: post #145

myself248 wrote: post #48

Earlier quoted context omitted.

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.

They MUST. Otherwise, how do they know how much to charge you at the register?

Re: Companies use drip pricing to overcharge consumers

#275

Post by metaphor » Wed, Jan 25, 2023, 2:06 AM 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.

Didn't quite pass my seasonally congested anecdotal sniff test. Turns out[1]:

  - 74% (37 states) vary depending on a local rate
  - 18% (9 states) are fixed at a state level
  - 8% (4 states) don't have sales tax

> Not in Ohio, where it can vary by township, sometimes across invisible boundaries.

Ohio isn't really exceptional in this regard; a few examples that come to mind:

  - San Francisco = 8.625% v. South San Francisco = 9.875% v. Oakland = 10.25%
  - Julington Creek Plantation (FL) = 7.5% v. Fruit Cove (FL) = 6.5%

[1] https://www.sale-tax.com/

Re: Companies use drip pricing to overcharge consumers

#276

Post by CraigRo » Wed, Jan 25, 2023, 2:09 AM UTC

When I see this, I multiply the charge by 2 and deduct it from the tip paid to the server and add a note. I don't like surprise charges, and I feel that the restaurant should charge appropriately and transparently in order to pay its employees. It isn't my responsibility as a guest to pay for the food as well as the back and front of house staff separately.

Re: Companies use drip pricing to overcharge consumers

#277

Post by mrridiculezz » Wed, Jan 25, 2023, 2:10 AM UTC

My favorite drip pricing technique is when you are asked for a tip while picking up carry-out pizza. Just ridiculous.

Re: Companies use drip pricing to overcharge consumers

#278

Post by jaxn » Wed, Jan 25, 2023, 2:10 AM UTC

illumin8 wrote: post #271

crazygringo wrote: post #84

Note that drip pricing for restaurants (e.g. 10-20% non-tip surcharge) is illegal in many jurisdictions (if not "conspicuously advertised" before eating), but some restaurants try to do it anyways (claiming the policy is "conspicuously advertised" on the last page of the menu, or a tiny sign behind the bar). Sometimes you can just refuse to pay it and they'll back down because they want a repeat customer more. Someti…

One thing I've noticed recently on 2 restaurant trips in the last couple weeks: The automatic tip calculations are wrong in the server/restaurant's favor. Most of us typically check the 20% option and don't double-check the math, but in the past these calculations were always done pre-tax. If your food came to $100 and you tipped 20%, the total would be $120 + sales tax. Now, the last 2 times I've eaten out the autom…

I suspect most people tip on the after-tax amount when they calculate it themselves. I get that you don’t. I also know people who tip on the non-alcohol amount. Personally, I have always tipped post-tax.

These are also low-margin businesses. A post-tax surcharge keeps your overall bill lower than if they had raised prices, which would also raise the tax amount. The high labor costs are going to be passed on to consumers regardless. The surcharge shorts the government (which most of us are probably fine with).

Re: Companies use drip pricing to overcharge consumers

#279

Post by fencepost » Wed, Jan 25, 2023, 2:11 AM UTC

JKCalhoun wrote: post #201

crazygringo wrote: post #84

Note that drip pricing for restaurants (e.g. 10-20% non-tip surcharge) is illegal in many jurisdictions (if not "conspicuously advertised" before eating), but some restaurants try to do it anyways (claiming the policy is "conspicuously advertised" on the last page of the menu, or a tiny sign behind the bar). Sometimes you can just refuse to pay it and they'll back down because they want a repeat customer more. Someti…

When I was being trained to work at a McDonald's restaurant (like four decades ago) they had us watch an awesome PSA about "the customer". To this day I remember the closer spoken by the poorly treated customer in the video, "I don't get mad, I just don't come back." I've left notes on my bill explaining to "management" why I'm not returning to a particular restaurant. I don't like doing it, but I think someone needs…

I've left notes on my bill explaining to "management" why I'm not returning

It's likely much more effective explaining in a review why you're not returning.

Re: Companies use drip pricing to overcharge consumers

#280

Post by michaelmrose » Wed, Jan 25, 2023, 2:12 AM UTC

TheCoelacanth wrote: post #260

michaelmrose wrote: post #103

Earlier quoted context omitted.

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.

It's not dine and dash if they refuse to accept payment.

Most employee interfaces don't have a way to represent customer paid arbitrary dollars towards their ticket but not all of it. Try this at retail. I'm only going to pay 50c towards that candy bar because that's what I feel like it should cost and ask to swipe your card for 50c. Most systems could represent a payment of less than the cost of the ticket as a partially completed transaction but would be faced with the decision to either complete the ticket or void it returning all funds.