Companies use drip pricing to overcharge consumers • Hacker News Board

Re: Companies use drip pricing to overcharge consumers

#331

Post by edmundsauto » Wed, Jan 25, 2023, 4:11 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…

UberEats calculates tip after tax, after Ubers fees, and excludes any discounts you received.

Re: Companies use drip pricing to overcharge consumers

#332

Post by deafpolygon » Wed, Jan 25, 2023, 4:20 AM UTC

flandish wrote: post #320

jaredhallen wrote: post #284

Earlier quoted context omitted.

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 ma…

Part of the exploitation process, imho inherent to capitalism, involved a migration from your “tip to good service” to “opportunity to save” (money) by the owners. I am, admittedly, a leftist and incredibly untrusting of anything where workers are not an equal part of the ownership in a business, so I know I jump too conclusion/assumption quicker than I prob should. But, I think there is no doubt that there is a lot…

Tipping is uncommon here in the NL. You just don't do it - even if they deliver your pizza.. they'll have a delivery charge and that's it. You might do it at high end restaurants, where I've heard of it being done. It's a complete contrast to the US. In more and more restaurants (esp. in NY) tips are becoming given directly to the wait staff less often anyways. They'll put all tips to the tip jar, then the restaurant takes some percent (sometimes as much as 50%) and the rest gets divvied up amongst the wait staff or even the entire restaurant.

Re: Companies use drip pricing to overcharge consumers

#333

Post by dhsysusbsjsi » Wed, Jan 25, 2023, 4:21 AM UTC

pedalpete wrote: post #186

Psychlist wrote: post #79

Earlier quoted context omitted.

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 A…

I didn't know about the "if it's mischarged it's free" policy. My local supermarket (not Coles or Woolies) always rings things in at the till wrong and I feel like I'm watching them like a hawk.

It's called the Supermarket Scanning Code of Conduct. If it scans wrong, you get the first one free, and the rest at the proper price. It's designed to keep the ACCC off their back.

I used to do it all the time - it's great when they stuff up prices on expensive items like Razors. One time I went back every day and got a free pack and ended up with several years worth of (free) expensive razors in surplus!

Usually the manager needs to come because the basic checkout person doesn't know about it.

Re: Companies use drip pricing to overcharge consumers

#334

Post by dhsysusbsjsi » Wed, Jan 25, 2023, 4:23 AM UTC

JenrHywy wrote: post #181

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…

IME, once you take tax, tips and the exchange rate into account, Australia in generally on par, or cheaper, than the US (California, at least).

Also in Australia I believe it is illegal to do drip pricing. For example Airlines need to advertise the entire price up-front. It includes all of the hidden fees. The only "extra" at the end is 1% or so if you pay via Credit-Card, however there are free Direct-Transfer options (e.g. POLI), so I think that is fair.

Re: Companies use drip pricing to overcharge consumers

#335

Post by willywanker » Wed, Jan 25, 2023, 4:48 AM UTC

flandish wrote: post #320

jaredhallen wrote: post #284

Earlier quoted context omitted.

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 ma…

Part of the exploitation process, imho inherent to capitalism, involved a migration from your “tip to good service” to “opportunity to save” (money) by the owners. I am, admittedly, a leftist and incredibly untrusting of anything where workers are not an equal part of the ownership in a business, so I know I jump too conclusion/assumption quicker than I prob should. But, I think there is no doubt that there is a lot…

It has nothing to do with 'capitalism', in case you think the alternative is socialism where everything will be perfect (you'll be lucky to get any service at all when salary is not tied to customer satisfaction, as Russians used to their country's culture found to their pleasant surprise when they crowded up at the first McDonald's just before the USSR broke up). And nothing prevents 'workers' from pooling their resources to run a business of their own as a cooperative and split the profits..as well as the losses.

Australia has some of the highest minimum wages in the world (with its own negative effect on small business owners) and you pay exactly the sum total of what you ordered on the menu as all prices are quoted inclusive of applicable taxes. Tipping is your prerogative if you feel the service was exemplary.

The US needs to get rid of the idea that it is the customer's responsibility to pay servers' wages over and above what they're already paying for the food.

Re: Companies use drip pricing to overcharge consumers

#336

Post by KMnO4 » Wed, Jan 25, 2023, 4:52 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…

Here’s a fun one to try next time you use UberEats.

Say your food is $12, and with delivery + fees it comes to $20.

The first “tip %” screen is based on the $20 figure. So 20% would be $4 extra.

If you decline that, you still have the option to tip before/after your food arrives. However, you’ll notice now the percentages reflect the pre-fees figure. So the 20% tip is now only $2.40.

Re: Companies use drip pricing to overcharge consumers

#337

Post by KMnO4 » Wed, Jan 25, 2023, 4:54 AM UTC

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 live in Ontario, and most people don’t (unless they use the button on the card reader). Sales tax is 13%, so a 15% tip is pretty easy to estimate as “whatever the tax is plus a bit more”.

Re: Companies use drip pricing to overcharge consumers

#338

Post by kmoser » Wed, Jan 25, 2023, 4:54 AM UTC

seadan83 wrote: post #311

ApolloFortyNine wrote: post #238

Earlier quoted context omitted.

Still required by law to pay the difference up to minimum wage. Still only 7.25 but let's be accurate.

Law and practice can often be different. Often "the agreement" is cash tips are not declared on taxes, and you don't hassle the company when you make an hourly shortfall. My impression is that arrangement is far more common than companies actually making sure you get minimum wage every hour.

The IRS assumes servers get a certain amount of tips, so if you don't report close to what they expect, you run a high risk of being audited.

Re: Companies use drip pricing to overcharge consumers

#339

Post by happymellon » Wed, Jan 25, 2023, 4:58 AM UTC

barbazoo wrote: post #62

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…

> 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. Does this matter though? Even if the tax is different from one stall to another, they could still publish a price that includes tax.

They would still have to know which side of the grounds they are on to charge that tax anyway. It seems like poor excuses to me.

Re: Companies use drip pricing to overcharge consumers

#340

Post by kmoser » Wed, Jan 25, 2023, 4:58 AM UTC

TuringNYC wrote: post #29

voakbasda wrote: post #20

Boost Mobile did this recently when my wife and I switched cell carriers. They advertised a $30/month/line plan (after a 3-month introductory period at an even lower price), but we are now paying closer to $45. This has pissed me off enough that I want to look for another carrier, but this seems to be SOP for this industry. Telcos behave like nothing less than a criminal cartel, so I was hardly surprised by this play…

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.

This reminds me of the old land line "touch tone fee" you'd pay for touch tone service, even long after nearly everybody had migrated away from the original pulse dialing. Not only did the phone company charge for it long after they really needed to, but you had no assurance the fee was really going to pay for that particular part of the service you were getting.

This is one of the big problems with these add-on fees: they claim to be for one service, but there's nothing preventing the company from using the money for something else entirely.