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Companies use drip pricing to overcharge consumers

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Re: Companies use drip pricing to overcharge consumers

#281

Post by illumin8 »

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…

One small township near us does this. They passed a law that states restaurants must put an additional 2% charge on every bill that is used to pay "kitchen staff." When we asked our server about this surprise charge they said "the law requires that we charge it now."

We decided to simply reduce our normal 20% tip by 2% and pay that. We don't like the fact that the city has stepped in to mandate additional fees like this and think this practice should stop.

Re: Companies use drip pricing to overcharge consumers

#282

Post by hansvm »

phpisthebest wrote: post #253
hansvm wrote: post #247

Earlier quoted context omitted.

> what purpose would it have to calculate it in your head like that? Huge swathes of people in the US struggle to afford food, and an extra 10+% floating around makes a big difference. It's nice that you can afford to spend your time more productively, but that's a luxury a lot of people can't. As something of a side note, it's a bit of an odd position to take that taxe hikes are important enough to make it illegal t…

>US struggle to afford food, and an extra 10+% floating around makes a big I am not aware of any us state that charges sales tax on staple food items. Also I feel sorry for anyone that lives in a place with 10% sales tax that is crazy high >>a bit of an odd position Not really one of the ways I believe we have to keep them low is by ensuring transparency. My state has less 7% sales tax less than 4% state income tax,…

> I am not aware of any us state that charges sales tax on staple food items. Also I feel sorry for anyone that lives in a place with 10% sales tax that is crazy high

Most major US cities are at 8-9%. Many smaller cities (and St Louis) are more than 10. Cumulatively it's a lot of people afflicted.

Also, I'm with you on staples not being taxed, but that's part of the problem with the tax being added later instead of precomputed into the total; if you're shopping at a general purpose store (the Walmart in Mt View AR has been an offender for awhile, but I rarely find perfectly correct tax calculations on receipts for all but the simplest of purchases at any store) and buy a mix of staples and clothes and whatever, very frequently you'll find that staples were taxed, and if you weren't tracking things closely you'll have missed where the extra few dollars went. You don't know till the register what the price will be and can't easily plan ahead.

Another related problem, especially in the poorer parts of the country, the cheapest calories you can buy, especially if you're working too many jobs to have time to cook, are often excluded from such tax exclusions to discourage unhealthy eating habits (note also how obesity negatively correlates strongly with income). If you go into it with a vague notion of food not being taxed you can get surprised with 10% sales tax, a 5% junk food tax, and often a 10-50 cent (on cheap food a non-negligible percentage) plastic use tax or some other crap.

And so on. The problems stemming from not knowing what you'll pay are common and real, and they disproportionately hit people who can least afford it.

Re: Companies use drip pricing to overcharge consumers

#283

Post by renewiltord »

not_the_fda wrote: post #232
carlosjobim wrote: post #218

Earlier quoted context omitted.

So scary, what will they do? Frown as hard as they can?

It usually involves bodily fluids.

I got food poisoning when at an American university and I used the university hospital. They followed up with me to ask me whether I ate out anywhere. Next thing you know they've gone and done an inspection on the place and it's closed for a couple of days. Seems a bit high risk.

Tbh I think I got sick off my own food but I was doing the thing where I just honestly gave them all the info. I never really expected anything to come of it.

Re: Companies use drip pricing to overcharge consumers

#284

Post by jaredhallen »

flandish wrote: post #263
chottocharaii wrote: post #237

Earlier quoted context omitted.

If you live in America you're an asshole if you do this. Tipping is the well-established cultural way for servers to make income. It is -not- something reserved for situations where good service is to be incentivized. Maybe in other countries ... but not the United States.

Truthfully, while it IS well established, this is only because the class of “owners” have beaten it into us (workers/consumers) and it is a great example of capitalism gaslighting more exploitation.

Is it capitalism? That doesn't sound like it's specifically the result of the free market at work. I don't love the situation, but it seems like it's kind of a nuanced history that started with extra incentive for exceptional service, which changed over time. Why? I don't know. But ultimately we (in the US) know that we should be expecting to pay ~20% on top of our bill, and take that into consideration when we're making the decision to eat at a table service establishment.

Re: Companies use drip pricing to overcharge consumers

#285

Post by illumin8 »

jaxn wrote: post #278
illumin8 wrote: post #271

Earlier quoted context omitted.

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 consum…

I always tip on my alcohol purchases, and usually tip 20% regardless of how good or bad the service was.

It's mainly because the sales tax is over 10.25% in our county. If the tax were only 5-6% like in most places in the US, it wouldn't be as big of a deal.

The food prices are also quite a bit higher here than in most places, but that's just due to cost of living. It is not uncommon to spend $200 to feed a party of 4 even without alcohol, so that tip on the extra $20.50 starts to add up.

Re: Companies use drip pricing to overcharge consumers

#286

Post by TuringNYC »

bryanlarsen wrote: post #124
michaelmrose wrote: post #96

Earlier quoted context omitted.

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.

Fair pricing would result in reduced profits for the ISP otherwise they wouldn't do it. Therefore consumers would benefit on net from fair pricing. Certainly some hard negotiators do benefit from discriminatory pricing, but their gains are less than the losses incurred by those who aren't.

>> Fair pricing would result in reduced profits for the ISP otherwise they wouldn't do it.

Possibly, if you think short term. Perhaps not if you think long term. Here are things we would consider purchasing if we could get a real price w/o first signing a 2yr contract

- SIM chip/plan for apple watch (x2 for me + wife)

- SIM chip/plan for iPad (x2 for me + wife)

- SIM for Child 1 in case of emergencies

- SIM for Child 2 in case of emergencies

But I have no clue if the cost of the above would be $100/mo or $300/mo, really there is no transparent pricing that I can see. Would have been great to just bundle all these into my single Verizon bill but i'm so afraid to even touch the plan.

Re: Companies use drip pricing to overcharge consumers

#287

Post by dqv »

phpisthebest wrote: post #253
hansvm wrote: post #247

Earlier quoted context omitted.

> what purpose would it have to calculate it in your head like that? Huge swathes of people in the US struggle to afford food, and an extra 10+% floating around makes a big difference. It's nice that you can afford to spend your time more productively, but that's a luxury a lot of people can't. As something of a side note, it's a bit of an odd position to take that taxe hikes are important enough to make it illegal t…

>US struggle to afford food, and an extra 10+% floating around makes a big I am not aware of any us state that charges sales tax on staple food items. Also I feel sorry for anyone that lives in a place with 10% sales tax that is crazy high >>a bit of an odd position Not really one of the ways I believe we have to keep them low is by ensuring transparency. My state has less 7% sales tax less than 4% state income tax,…

So the reasonable compromise here is to just have both prices on the labels. The pre-tax and post-tax price. I wouldn't be opposed to knowing how much taxes increase the individual price of the item, but I do want to know the final price before I put it in my cart.

Re: Companies use drip pricing to overcharge consumers

#288

Post by z0r »

jaxn wrote: post #278
illumin8 wrote: post #271

Earlier quoted context omitted.

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 consum…

I think tipping post-tax is part of the longer term inflation of tipping. Once 10% pre-tax was the acceptable tip, then 15% during the 90s, and now it has drifted to 18%, 20% and possibly soon above. Somewhere during that drift it went from being pre-tax to sometimes, and even most of the time, post-tax. All this despite it being a percentage of cost and thus scaling with the price of goods naturally.

Re: Companies use drip pricing to overcharge consumers

#289

Post by smileysteve »

HelixEndeavor wrote: post #192
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…

Every day it seems more and more like restaurants in general are a completely unsustainable business unless you want to pay $20 for a cheeseburger.

After tips, taxes, and beer prices; U.S. did has been much more expensive than just European food for the last decade.

Re: Companies use drip pricing to overcharge consumers

#290

Post by voakbasda »

kjksf wrote: post #86
voakbasda wrote: post #50

Earlier quoted context omitted.

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.

Starlink?

Too many trees that I can't just cut down. I tried them out when they first launched, and it wants a view of the North sky. If I could point it to the South (or even straight up), I would give it another try.

However, I am no longer convinced that it would be worth the cost to upgrade. Too many people have reported overall degraded service in the face of rising subscriptions. Moreover, my DSL service includes static IPs, so I can't simply switch over.

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