California AG and state senators introduce bill to ban hidden fees(oag.ca.gov)
oag.ca.gov
California AG and state senators introduce bill to ban hidden fees
https://oag.ca.gov/news/press-releases/attorney-general-bonta-senator-dodd-senator-skinner-introduce-bill-prohibiting
395 comments
>This is also a case where consumers say they want one thing, but their behavior is a different matter. For example, pretty much everyone says they prefer the full price to be shown up front in search result pages. But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion, where there is a lower up-front price and fees are only tacked on during checkout.
This seems to be very misguided logic to me. I can also trick people with fraud but that doesn't mean the victims are indifferent to the fraud. It being effective doesn't mean people like it. Consumers can still hate this hidden fee approach even, and perhaps especially, because it is effective.
This seems to be very misguided logic to me. I can also trick people with fraud but that doesn't mean the victims are indifferent to the fraud. It being effective doesn't mean people like it. Consumers can still hate this hidden fee approach even, and perhaps especially, because it is effective.
It doesn't need to be fraud. A common trick in designing restaurant menus is to make it harder to scan the price list, because people buy the food they prefer when price is one of many considerations rather than prominently highlighted.
> Centred Justification
> When prices are printed in neat, right-justified columns, everyone glances down the line to compare prices. Menu consultants recommend a centred justification that leaves the prices scattered. This gently encourages the diner to order what she wants, not pick the cheapest price. Another way of minimising attention to cost? Omit the pound signs.
https://www.wired.co.uk/article/the-hidden-psychology-of-men...
> Centred Justification
> When prices are printed in neat, right-justified columns, everyone glances down the line to compare prices. Menu consultants recommend a centred justification that leaves the prices scattered. This gently encourages the diner to order what she wants, not pick the cheapest price. Another way of minimising attention to cost? Omit the pound signs.
https://www.wired.co.uk/article/the-hidden-psychology-of-men...
What's weird, at least in the US, is that the higher-end the joint, the easier it is to shop by price, generally. Tax-inclusive, whole-dollar-value (no "$7.99" crap, it's just "8"), all-prices-aligned menus are more common as one heads up-scale.
Makes sense: at the high end of the market, patrons need to be able to identify and get the most expensive option to impress their date/mates, and understandably restaurants want to be helpful.
(See "Veblen goods".)
(See "Veblen goods".)
Never seen the impressing part... usually if you want to eat cheap, you go somewhere cheap, if you want something more expensive, you're prepared to pay more, but you don't want to be surprised after.
So, noone who goes to a place like this cares if one soup is $12 and the other $14 and then pick the cheaper one... but if you have a $79 bottle of wine on the menu and a $7900 bottle of wine on the menu, it's in the interest of the restaurant to have the patrons know clearly that the expensive bottle is really really expensive, and having deceptive pricing there ("$7.9 per 0.7ml") only causes problems when the check arrives.
So, noone who goes to a place like this cares if one soup is $12 and the other $14 and then pick the cheaper one... but if you have a $79 bottle of wine on the menu and a $7900 bottle of wine on the menu, it's in the interest of the restaurant to have the patrons know clearly that the expensive bottle is really really expensive, and having deceptive pricing there ("$7.9 per 0.7ml") only causes problems when the check arrives.
"Sir, the wine is clearly marked as 0.0000000472c per cubic mile. How did you not see this coming?"
That happened to me in Italy. I knew I was in trouble when the chef came out to shake my hand. I did not realize the steak was priced per ounce, was the biggest steak I’d even seen, ended up costing me ~$400.
This is also how shitty clubs scam tourists in many areas... There are bouncers infront of the clubs, "come on, come on, free welcome drink", tourists (mostly western european middle aged men) go inside, a "random, totally not hired by the club" hot girl or two join them, seemingly interested where they are from, flirt a bit, order a glass of wine, then leave.. and the tourists are left with 500eur+ bill for the wine.
Although, bouncers have to distinguish eg. solo german men from eg. balkan construction workers, because the scam is somewhat less effective on those.
Although, bouncers have to distinguish eg. solo german men from eg. balkan construction workers, because the scam is somewhat less effective on those.
> I knew I was in trouble when the chef came out to shake my hand.
That is hilariously brutal. Oh no!
That is hilariously brutal. Oh no!
This is like listening to americans when they try anything to avoid using metric units, but the imperial ones suck with representation... So.. how many cubic lawnmowers is this?
example:
https://twitter.com/KSHB41/status/1158871610876682240?lang=p...
example:
https://twitter.com/KSHB41/status/1158871610876682240?lang=p...
Kinda, but it seems pretty common anywhere remotely "hip", not just fancy $150/head restaurants. It seems to be almost a cultural/class thing rather than being restricted to super-expensive places. You can find $9 (exactly) burgers commonly-enough, and by the time you're up to $35/head being a common bill (without drinks) it's practically the norm. I'll grant the higher end of that range may read as impressive and the kind of thing some demographic might spend for the sake of spending that much money, but I don't think the lower end does. (exact range may vary, but that's what it's like in my city)
For the high end restaurant clientele, the difference between 10 vs 20 or 10 vs 9 is not much (which is what 19.99 and 9.99 tricks are exploiting), and they are optimizing for time and optimal experience, because they have 'less' of that compared to their money. Also seeing the tricks like that is indicative of being lower class, because $10 or $1 prices differences matter at that level.
I don't think it's exactly about letting people order Veblen Goods, but I do agree that it is about signaling class.
The .99 pricing thing is associated with "trying to make it look cheaper", so a restaurant that puts round prices is trying to send the opposite message: we're not cheap, you're not cheap, we won't try to fool you.
The .99 pricing thing is associated with "trying to make it look cheaper", so a restaurant that puts round prices is trying to send the opposite message: we're not cheap, you're not cheap, we won't try to fool you.
Maybe there are some 3 Michelin star restaurants where this is the case (~150 in the world), but otherwise these are not Veblen goods.
Also there seems to be a more normal distribution of last digit prices as well e.g. main courses are $x2, $x1, $x6, $x8, $x5, $x4,etc.
This is exactly right. It's not hard to get better A/B results by using dark patterns and consumers will still rightfully hate it.
I don't think fraud is a good analogy - the whole point with fraud is that you are getting something different after you agreed to it, when it's too late to back out.
Going back to the airline example, most people say they hate getting nickel and dimed on things like paying to pick a seat up front or paying even for the first carry-on, but they will still pick one flight over another if the base rate is $5 cheaper. And in that case there is nothing untoward, fraudulent or "dark pattern" about what the airline is doing, as they are just allowing people to only pay for the services they want. But it's still a clear case of consumers saying they want one thing, but by their actions they are incentivizing airlines to do something else.
But regardless of the underlying reason, I still agree that the best solution is for government to provide "ground rules" that most people agree are better. After all, most consumers would probably prefer cheaper products even if manufacturers used child labor or had no pollution controls, but it's the government's role to ensure these longer term societal goals aren't completely ignored in pursuit of the cheapest price.
Going back to the airline example, most people say they hate getting nickel and dimed on things like paying to pick a seat up front or paying even for the first carry-on, but they will still pick one flight over another if the base rate is $5 cheaper. And in that case there is nothing untoward, fraudulent or "dark pattern" about what the airline is doing, as they are just allowing people to only pay for the services they want. But it's still a clear case of consumers saying they want one thing, but by their actions they are incentivizing airlines to do something else.
But regardless of the underlying reason, I still agree that the best solution is for government to provide "ground rules" that most people agree are better. After all, most consumers would probably prefer cheaper products even if manufacturers used child labor or had no pollution controls, but it's the government's role to ensure these longer term societal goals aren't completely ignored in pursuit of the cheapest price.
> I don't think fraud is a good analogy - the whole point with fraud is that you are getting something different after you agreed to it, when it's too late to back out.
Nah, it’s fraud. It’s a minor, lightweight fraud, but it’s still fraud.
These companies are just lying to customers to get what they want, that’s fraud.
There’s a veneer of legality to it, because they tell you the price before the “contract” is legally complete, but only after making the customer jump through a few hurdles.
The entire point is to make the customer do enough work before you show them the actual price, that they just give up and deal with it.
It’s a moral fraud, even if not legally fraud. Even if not on the dotted line, they’re forcing the customer to spend their time on it under false pretenses, in the hope that the sunk cost is enough to trap the customer.
Nah, it’s fraud. It’s a minor, lightweight fraud, but it’s still fraud.
These companies are just lying to customers to get what they want, that’s fraud.
There’s a veneer of legality to it, because they tell you the price before the “contract” is legally complete, but only after making the customer jump through a few hurdles.
The entire point is to make the customer do enough work before you show them the actual price, that they just give up and deal with it.
It’s a moral fraud, even if not legally fraud. Even if not on the dotted line, they’re forcing the customer to spend their time on it under false pretenses, in the hope that the sunk cost is enough to trap the customer.
You have a very odd definition of "fraud" in my opinion. But I'll just leave it at that, because this feels like the perfect example of the oft-quoted "99% of all Internet arguments are over semantics" line.
Sure, I’ll agree that my definition doesn’t line up 100% with the legal definition.
My definition of fraud is: “lying to someone to induce them to do something they wouldn’t have done without the lie”.
I think the hidden pricing lines up neatly with my definition.
What’s your definition? (We don’t need to come to an agreement, just curious how you think about it)
My definition of fraud is: “lying to someone to induce them to do something they wouldn’t have done without the lie”.
I think the hidden pricing lines up neatly with my definition.
What’s your definition? (We don’t need to come to an agreement, just curious how you think about it)
FWIW, I don't even really feel like the "legal definition" is relevant: a lot of people on Hacker News seem to think the only thing that matters is the law, and then attempt to move every conversation into whether the law says one thing or the other, and yet fraud is a concept that no one has ever questioned exists even when the law isn't in question or involved. The definition from Oxford Languages (the one Google pulls from) has an "or criminal", but that's clearly elidable, so "wrongful deception intended to result in financial or personal gain" is what we are left with, and the question is then just whether or not it is "wrongful"... and frankly, you're going to end up there also, because I'm pretty sure the person you are arguing with is going to say "this isn't lying". I guess what I mean to say is: you are actually trying to have an ethical argument, but are being drawn into a silly semantic argument over the definition and source of a word you used not really because the definition matters but because it has a bad connotation and since they disagree that this is unethical behavior they want a happy word there, when the real problem is the ethical disagreement.
Sure, but I generally think when you get into the semantic discussion, it’s useful to put my operating definition on the table, so that we can quickly get to either the semantic disagreement or the ethical disagreement (that I think knowing saying untrue things is lying, while others may think knowing saying untrue things isn’t lying)
That is the normal definition of fraud. It seems the difference is you think hidden fees are lying, whereas most people don’t think so as long as they are presented before final purchase agreement.
Yes, I think saying something is $199/night when the minimum you can pay for it is $250/night is lying.
Can you think of another word for that? It’s an untrue statement about the price, that they know is untrue. I just can’t think of another word to describe that other than “a lie”.
If the hidden fees were optional, I could see it being a closer call. If I can uncheck the cleaning fee and actually get $199/night, then it’s not as much a lie. This is the budget airline model. A super super cheap flight, but if you want to put a bag in the overhead bin that’s an extra cost. I think there’s something somewhat deceptive about that practice, but I wouldn’t call it a lie.
But, really, if they say a cost is $199/night when the minimum cost is $250/night and they know that to be the case, how can that be anything other than a lie?
Can you think of another word for that? It’s an untrue statement about the price, that they know is untrue. I just can’t think of another word to describe that other than “a lie”.
If the hidden fees were optional, I could see it being a closer call. If I can uncheck the cleaning fee and actually get $199/night, then it’s not as much a lie. This is the budget airline model. A super super cheap flight, but if you want to put a bag in the overhead bin that’s an extra cost. I think there’s something somewhat deceptive about that practice, but I wouldn’t call it a lie.
But, really, if they say a cost is $199/night when the minimum cost is $250/night and they know that to be the case, how can that be anything other than a lie?
According to your definition of lying/fraud, basically all of the following would count as fraud:
1. Pretty much every retail store in existence in the US, because sales taxes aren't calculated until checkout. The sign in the aisle says "3.99" but the minimum you can pay for it is 3.99 x .08 or whatever, so according to your definition that's lying.
2. Every online retail store that charges for shipping and handling, because those charges aren't calculated until checkout (usually because they are variable). Again, according to you, another instance of lying.
3. Even your cleaning fee example isn't as cut-and-dry as you make it out to be. Cleaning fees for vacation rentals are usually assessed only once per stay (i.e. for cleaning the room after checkout), so including the cleaning fee into the nightly rate isn't accurate, even if I enter my rental dates while searching. A place that charges $199/night but has a $100 cleaning fee may or may not be a better deal than a $250/night place with a $40 cleaning fee, depending on my length of stay. If I just lump that in with a nightly rate, and my dates are flexible, I lose information about which place may be the better deal.
4. I've seen customers get irate and demand something was "fraud" when a vacation rental had parking fees. The parking fees were clearly spelled out in the contract (but, again, only on checkout). But this truly is an optional fee - many customers would Uber or whatever to get to the rental without a car. What determined whether the customer thought it was "fraud" was their own personal expectations about what should be included, even if other customers didn't share those expectations.
Furthermore, many/most of these sites that only show details of fees on checkout still say "plus fees" or "plus S/H" on search result pages. Is it still fraud if they tell you there are fees upfront but don't actually tell you what those fees are until checkout?
In general, I just find it very distasteful when folks try to redefine words that have pretty straightforward meanings to meet their personal definition of the what they think the word should mean, especially for topics that have gray areas, and especially when there are other words that better encompass the idea that you're making a statement of opinion rather than fact. E.g. I think most people wouldn't mind you saying "Their marketing practices are deceptive", because most people would think there is some amount of opinion into what constitutes deception, but most people think of fraud as much more of a clear-and-dry instance of lying for financial gain.
1. Pretty much every retail store in existence in the US, because sales taxes aren't calculated until checkout. The sign in the aisle says "3.99" but the minimum you can pay for it is 3.99 x .08 or whatever, so according to your definition that's lying.
2. Every online retail store that charges for shipping and handling, because those charges aren't calculated until checkout (usually because they are variable). Again, according to you, another instance of lying.
3. Even your cleaning fee example isn't as cut-and-dry as you make it out to be. Cleaning fees for vacation rentals are usually assessed only once per stay (i.e. for cleaning the room after checkout), so including the cleaning fee into the nightly rate isn't accurate, even if I enter my rental dates while searching. A place that charges $199/night but has a $100 cleaning fee may or may not be a better deal than a $250/night place with a $40 cleaning fee, depending on my length of stay. If I just lump that in with a nightly rate, and my dates are flexible, I lose information about which place may be the better deal.
4. I've seen customers get irate and demand something was "fraud" when a vacation rental had parking fees. The parking fees were clearly spelled out in the contract (but, again, only on checkout). But this truly is an optional fee - many customers would Uber or whatever to get to the rental without a car. What determined whether the customer thought it was "fraud" was their own personal expectations about what should be included, even if other customers didn't share those expectations.
Furthermore, many/most of these sites that only show details of fees on checkout still say "plus fees" or "plus S/H" on search result pages. Is it still fraud if they tell you there are fees upfront but don't actually tell you what those fees are until checkout?
In general, I just find it very distasteful when folks try to redefine words that have pretty straightforward meanings to meet their personal definition of the what they think the word should mean, especially for topics that have gray areas, and especially when there are other words that better encompass the idea that you're making a statement of opinion rather than fact. E.g. I think most people wouldn't mind you saying "Their marketing practices are deceptive", because most people would think there is some amount of opinion into what constitutes deception, but most people think of fraud as much more of a clear-and-dry instance of lying for financial gain.
>
1. Pretty much every retail store in existence in the US, because sales taxes aren't calculated until checkout
Which is, of course, insane. There is no good reason for taxes to not be rolled into the price. What next? An 'employee wages' line item that gets added at checkout? Maybe a 'mall rental space' one? A 'shareholder dividend' one?
> 2. Every online retail store that charges for shipping and handling.
Depending on where they ship, those are at least unknown until checkout.
> 3. Even your cleaning fee example isn't as cut-and-dry as you make it out to be. Cleaning fees for vacation rentals are usually assessed only once per stay (i.e. for cleaning the room after checkout), so including the cleaning fee into the nightly rate isn't accurate, even if I enter my rental dates while searching.
Rental availability is only known when you enter a date range. If you've entered a date range, there's no reason the fees can't be included in the price. There's nothing fraudulent about selling 5 nights for $180/night, versus 4 nights for $195/night, just like there's nothing fraudulent about charging more for 2x2L jugs of milk than for 1x4L jug.
> 4. I've seen customers get irate and demand something was "fraud" when a vacation rental had parking fees.
Unlike #1 and #3 (Sales tax, cleaning fees), parking fees really are optional.
Which is, of course, insane. There is no good reason for taxes to not be rolled into the price. What next? An 'employee wages' line item that gets added at checkout? Maybe a 'mall rental space' one? A 'shareholder dividend' one?
> 2. Every online retail store that charges for shipping and handling.
Depending on where they ship, those are at least unknown until checkout.
> 3. Even your cleaning fee example isn't as cut-and-dry as you make it out to be. Cleaning fees for vacation rentals are usually assessed only once per stay (i.e. for cleaning the room after checkout), so including the cleaning fee into the nightly rate isn't accurate, even if I enter my rental dates while searching.
Rental availability is only known when you enter a date range. If you've entered a date range, there's no reason the fees can't be included in the price. There's nothing fraudulent about selling 5 nights for $180/night, versus 4 nights for $195/night, just like there's nothing fraudulent about charging more for 2x2L jugs of milk than for 1x4L jug.
> 4. I've seen customers get irate and demand something was "fraud" when a vacation rental had parking fees.
Unlike #1 and #3 (Sales tax, cleaning fees), parking fees really are optional.
What makes you believe that most people don't think hidden fees are lying?
>>The entire point is to make the customer do enough work before you show them the actual price, that they just give up and deal with it.
I think a big part of the point is to compete on search (aggregate search like travel sites especially) with the company's competitors. The first company to start, say, charging for a carry-on realizes that they are forcing everyone to copy that, but for a while they'll have an advantage and make more profit. Any business leader doing this first is trying to dishonestly game the system. The others are just doing what they now have to do to keep the playing field level.
On aggregating vacation rental sites, the owners that choose not to do this (at least on sites like VRBO) can add "no service or management costs" to their listings, or maybe "no hidden costs", but it is not very effective because if you are charging $225 and the customer is searching in the range $100 - $200, you loose and the person advertising a $199.00/night charge (with management fee added later) wins.
I think a big part of the point is to compete on search (aggregate search like travel sites especially) with the company's competitors. The first company to start, say, charging for a carry-on realizes that they are forcing everyone to copy that, but for a while they'll have an advantage and make more profit. Any business leader doing this first is trying to dishonestly game the system. The others are just doing what they now have to do to keep the playing field level.
On aggregating vacation rental sites, the owners that choose not to do this (at least on sites like VRBO) can add "no service or management costs" to their listings, or maybe "no hidden costs", but it is not very effective because if you are charging $225 and the customer is searching in the range $100 - $200, you loose and the person advertising a $199.00/night charge (with management fee added later) wins.
Yep, I understand why people commit this fraud.
And, again, as far as fraud goes I think this is on the fairly low end of frauds.
But, “hey, lots of other people are committing this fraud” goes into the bucket of “helps the person committing fraud sleep at night”.
I do tend to hold the platforms themselves (AirBnB, VRBO) more responsible than the individual hosts that list on these platforms.
It just shouldn’t be possible to even present listings with hidden fees on the platforms. So, in general I look at this as 90% AirBNBs fault, and 10% the individual hosts fault.
And, again, as far as fraud goes I think this is on the fairly low end of frauds.
But, “hey, lots of other people are committing this fraud” goes into the bucket of “helps the person committing fraud sleep at night”.
I do tend to hold the platforms themselves (AirBnB, VRBO) more responsible than the individual hosts that list on these platforms.
It just shouldn’t be possible to even present listings with hidden fees on the platforms. So, in general I look at this as 90% AirBNBs fault, and 10% the individual hosts fault.
I agree with you directionally, it's a problem that VRBO et. al. should solve, perhaps in their search algorithm and UI. For instance, the fee-range search should include the hidden flat fees averaged over the number of nights, in the nightly rate.
I notice VRBO has a search by nightly rate and a search by total cost, so at least you can choose "deceive me" or "don't deceive me".
I notice VRBO has a search by nightly rate and a search by total cost, so at least you can choose "deceive me" or "don't deceive me".
The problem is when the customer chooses the lowest price only to find it stacked with fees before checkout, they don’t think ‘wait a minute, this is more expensive than some of the other flights I saw on the original search page. I’d be better off going back and trying one of them’
The customer assumes that all those other prices would also be lowballing them and that if they went back and chose one they’d end up with an even higher final bill.
Starting with the lowest base price seems like a good strategy to get the lowest total price when all the prices are up charged the same.
The customer assumes that all those other prices would also be lowballing them and that if they went back and chose one they’d end up with an even higher final bill.
Starting with the lowest base price seems like a good strategy to get the lowest total price when all the prices are up charged the same.
This only happens in non competitive markets, or markets where fraudy behavior becomes the norm because profit margins are too low and they can't innovate their way into better profit margins. It's an act of desperation essentially.
> but they will still pick one flight over another if the base rate is $5 cheaper
The other flight also tricks you with in-flight purchase of air, so, might as well choose the lowest base price.
The other flight also tricks you with in-flight purchase of air, so, might as well choose the lowest base price.
I know I’m not an outlier, but this is why I’ve historically stuck with Delta as an airline. They’re not perfect either, but they give you the main things you’d need for a flight in the base price, and are generally pretty flexible and reasonable with things like bag size.
Unless they’re way more expensive, I’ll still pick them for a slightly higher price over the others, because I know that I’ll get a good experience and it’ll be way less stressful. They also always have staff available in the airport when things go wrong.
Frontier has been doing this thing where they make everyone put their backpack into the little measuring box so they have a chance to charge you $100 for being an inch oversized. They haven’t gotten me on that personally, but I’ve sworn off of flying with them entirely because it’s like they want you to suffer. I have 40 other complaints about them but I’ll save it for now
Unless they’re way more expensive, I’ll still pick them for a slightly higher price over the others, because I know that I’ll get a good experience and it’ll be way less stressful. They also always have staff available in the airport when things go wrong.
Frontier has been doing this thing where they make everyone put their backpack into the little measuring box so they have a chance to charge you $100 for being an inch oversized. They haven’t gotten me on that personally, but I’ve sworn off of flying with them entirely because it’s like they want you to suffer. I have 40 other complaints about them but I’ll save it for now
Honestly that backpack measurement sound pretty good to me. I’m sick of subsidizing people with oversized bags while I travel super light.
I don’t support hidden fees but I think price discrimination based on usage is totally reasonable. Just make the costs up front.
I don’t support hidden fees but I think price discrimination based on usage is totally reasonable. Just make the costs up front.
Why stick with delta vs other majors, like united, southwest or american airlines? Frontier acting like that just seems consummate with their low price tier like spirit.
> pretty much everyone says they prefer the full price to be shown up front in search result pages. But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion
That may be true, but those are measuring two separate things - customer desires and customer behavior. Just because it results in more sales doesn't actually mean the customer still wants that. I know I didn't when I rented a car recently but I was pretty much stuck when picking up the car at the airport. I would have definitely found another solution if I knew upfront how much the real cost was going to be.
That may be true, but those are measuring two separate things - customer desires and customer behavior. Just because it results in more sales doesn't actually mean the customer still wants that. I know I didn't when I rented a car recently but I was pretty much stuck when picking up the car at the airport. I would have definitely found another solution if I knew upfront how much the real cost was going to be.
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> This is also a case where consumers say they want one thing, but their behavior is a different matter. For example, pretty much everyone says they prefer the full price to be shown up front in search result pages. But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion, where there is a lower up-front price and fees are only tacked on during checkout.
Consumers are very consistent here. You are comparing what consumers want: clear, upfront pricing so they can pick the lowest cost option, with what companies want: more sales. The fact that putting your pricing upfront causes you to lose customers because your competition is hiding costs is as you point out a dysfunctional market problem. But the consumers involved are not being hypocritical.
Consumers are very consistent here. You are comparing what consumers want: clear, upfront pricing so they can pick the lowest cost option, with what companies want: more sales. The fact that putting your pricing upfront causes you to lose customers because your competition is hiding costs is as you point out a dysfunctional market problem. But the consumers involved are not being hypocritical.
> This is also a case where consumers say they want one
thing, but their behavior is a different matter. For
example, pretty much everyone says they prefer the full
price to be shown up front in search result pages. But,
as someone who is privy to a ton of A/B testing in this
area, the opposite nearly always results in higher
conversion, where there is a lower up-front price and
fees are only tacked on during checkout.
I wouldn’t read the claim as “consumers secretly do like hidden fees” but rather “people say they don’t like them but don’t actually care enough to stop giving money to companies which use them”. It’s like how people might say they want to eat better food if you ask them directly but when you record what they actually eat it ends up looking quite different.
On HN you’ll see a similar dynamic with privacy, business ethics, etc.: people say they don’t like being tracked but won’t even try using a browser other than Chrome or worry about local businesses but won’t consist paying +-10% more not to buy through Amazon.
On HN you’ll see a similar dynamic with privacy, business ethics, etc.: people say they don’t like being tracked but won’t even try using a browser other than Chrome or worry about local businesses but won’t consist paying +-10% more not to buy through Amazon.
People who've already wasted time getting to the point where they can see the fees, and are confident that all your competitors do the same thing anyway, aren't likely to bail over them.
That's probably the most accurate way to state the "preference".
That's probably the most accurate way to state the "preference".
Exactly: there’s a ton of psychology research around that effect and businesses use these techniques because they work. I applaud California for trying to make this illegal since something reliably profitable is not going to stop otherwise.
Incidentally, California mostly [1] already bans hidden fees for cars, and IMO the car-buying experience in California is better for it compared to other states.
[1] the current workaround is dealers listing the MSRP on their websites and arguing that that isn't an advertised sale price... but at least that only works for new cars.
[1] the current workaround is dealers listing the MSRP on their websites and arguing that that isn't an advertised sale price... but at least that only works for new cars.
Yeah, it's that people can be successfully tricked.
People don't like being stolen from, but if you can get away with it, it must be a good thing
People don't like being stolen from, but if you can get away with it, it must be a good thing
I think the problem is that it’s not actually stealing but something in between, like how we might say a salesperson is pushy and not like it but we wouldn’t refer to them as a thief.
Agreed. It seems that the A/B testing proves that humans are easily tricked, not that they like hidden fees.
stillsleepy(2)
I interpreted that as suggesting people would wind up buying nothing if all the options are perceived to be too expensive. But sone people will continue down the rabbit hole if you get them in the funnel to start with
How did you interpret the text to mean that? Higher conversion doesn't mean nothing was purchased.
the opposite nearly always results in higher
conversion, where there is a lower up-front price and
fees are only tacked on during checkout.Your parent meant _some_ people end up purchasing nothing, when the initial price shown is higher.
Basically the top of the funnel is more price sensitive than after they have already progressed a bit towards the purchase.
Basically the top of the funnel is more price sensitive than after they have already progressed a bit towards the purchase.
Thank you. I do understand that, but that comment was in the context of being an interpretation of something that clearly didn't state that, which is why I asked for clarification as to how that interpretation had come about.
> because the fees are hidden and the total cost appears lower
Consumers still understand the total cost, albeit at the end. We aren't tricked into accepting it most of the times.
Take Airbnb for example. Consumers compare and find listings, but at checkout, the extra charges get added. They see what they will pay, but at this point they just "accept it", rather than starting over again.
Consumers still understand the total cost, albeit at the end. We aren't tricked into accepting it most of the times.
Take Airbnb for example. Consumers compare and find listings, but at checkout, the extra charges get added. They see what they will pay, but at this point they just "accept it", rather than starting over again.
> Take Airbnb for example. Consumers compare and find listings, but at checkout, the extra charges get added. They see what they will pay, but at this point they just "accept it", rather than starting over again.
That's the point. These sorts of hidden fees are used to trick consumers. A consumer who just read through two different website offerings, only to see a hidden fee at the end of each likely will give up, despite not actually understanding any more about which possible offering is the lower-cost offering.
Hidden fees are literally lying to the consumers. No the offering isn't actually $0.99, it's $271.
That's the point. These sorts of hidden fees are used to trick consumers. A consumer who just read through two different website offerings, only to see a hidden fee at the end of each likely will give up, despite not actually understanding any more about which possible offering is the lower-cost offering.
Hidden fees are literally lying to the consumers. No the offering isn't actually $0.99, it's $271.
> Heck, I think many businesses would support this change
Also being privy to A/B testing in this area, I can tell you that we developers would looooove this kind of regulation so we don't have to build these kinds of dark patterns while holding our noses and telling ourselves that at least the pay is good.
Also being privy to A/B testing in this area, I can tell you that we developers would looooove this kind of regulation so we don't have to build these kinds of dark patterns while holding our noses and telling ourselves that at least the pay is good.
> this ease of price comparison has resulted in unbundling of services in a number of industries - e.g. airlines where the base price is akin to "we let you hang on to the wing", and everything else is an upcharge.
The issue isn't that everything is an upcharge.
I have no problem with having options. I actually like being able to pay less when I don't need the added options.
With airlines, (at least here in EU) you pretty much know what the base price buys you and that everything is an option on top of it. And as long as the options are reasonable (like paying for additional luggage) and the UI isn't trying to mislead you to buying something you don't intend, I think this is very defensible from the standpoint of making product better and more affordable to people (who don't necessarily need additional luggage, for example).
The issue is in many cases there is not even a possibility to buy the product/service for the advertised price and they will make difficult for you to find out what you are going to pay until it is too late or you have invested time/effort. It is a restaurant where the charges are added to your bill (the tip no longer being voluntary) or a shop where they try to recoup some of their losses with an exaggerated shipment fees. Or when you suddenly find out a critical part of your product is sold separately. Or you buy a printer and then they try to scam you by selling the ink/toner for more than the price of the printer. Or the website UI makes every effort to hide from you the fact you are buying something you don't need.
The issue isn't that everything is an upcharge.
I have no problem with having options. I actually like being able to pay less when I don't need the added options.
With airlines, (at least here in EU) you pretty much know what the base price buys you and that everything is an option on top of it. And as long as the options are reasonable (like paying for additional luggage) and the UI isn't trying to mislead you to buying something you don't intend, I think this is very defensible from the standpoint of making product better and more affordable to people (who don't necessarily need additional luggage, for example).
The issue is in many cases there is not even a possibility to buy the product/service for the advertised price and they will make difficult for you to find out what you are going to pay until it is too late or you have invested time/effort. It is a restaurant where the charges are added to your bill (the tip no longer being voluntary) or a shop where they try to recoup some of their losses with an exaggerated shipment fees. Or when you suddenly find out a critical part of your product is sold separately. Or you buy a printer and then they try to scam you by selling the ink/toner for more than the price of the printer. Or the website UI makes every effort to hide from you the fact you are buying something you don't need.
Extra fees later on is exploiting people who have invested time into the buying process and now have a higher price for saying no vs. whatever the extra fee is. It's rational consumer behavior, but it is not what you actually think it is.
Vast majority of A/B testing schemes that do gotcha pricing cannot measure the 'credit rating' that your essentially burning by doing this, and it's only sustainable if they don't have any other choice of place that doesn't do this. It's classic short term PM metrics hacking in exchange for hurting the business or industry overall.
Vast majority of A/B testing schemes that do gotcha pricing cannot measure the 'credit rating' that your essentially burning by doing this, and it's only sustainable if they don't have any other choice of place that doesn't do this. It's classic short term PM metrics hacking in exchange for hurting the business or industry overall.
> and it's only sustainable if they don't have any other choice of place that doesn't do this.
Unfortunately in many cases "short term" here is long enough to force/encourage the competition to follow suit so you get entire sectors where there is no choice.
Unfortunately in many cases "short term" here is long enough to force/encourage the competition to follow suit so you get entire sectors where there is no choice.
Airlines are an interesting an example because the FAA required them to advertise all-inclusive pricing a decade ago. The extras they charge for now (checked bags, bigger seats, nonstop flights) really are optional —- I routinely pack light and pass on any upgrades. People who need to check a bag can include that in their price comparison. For hotels, it’s fine to charge extra for access to the pool or whatever as long as it’s possible to decline.
One interesting wrinkle is sitting next to another person on your ticket. By all rights it should be optional but person after person books the no assigned seat option and then is outraged that they are not seated next to their companions.
There was an interesting article on United’s new family seating policy, allows families traveling with children under 12 to sit together automatically with no added fees by default. Sounded like a decent way of identifying when sitting together actually would be optional for most people. https://viewfromthewing.com/uniteds-new-family-seating-polic...
I’m fine with this solution, families can use a break in modern America. But if airlines had said from the beginning that bookings with a child under 12 are not eligible for basic economy, it’d hard to see what’s unfair about that.
The airlines aren’t doing this out of kindness, the Department of Transportation is basically telling them they have to. Officially they’re “encouraging” the airlines to seat families together at no charge, but that’s regulator speak for “do it voluntarily or else we’ll make you”. https://www.transportation.gov/individuals/aviation-consumer...
I've flown with South West for years where all tickets are "no assigned seat", and I've yet to see a single person who's 'outraged' by the result. I've not even overheard grumbled complaints. This doesn't seem like a real problem to me.
In my experience hotels are free to add daily “resort fees” that cover whatever they want, no option to decline.
I think the difference being, "the hidden" charges are usually not optional in other cases. Airbnb for example, hotel resort fees, ticket "pickup fees", etc.
For folks taking issue with my "consumers say one thing but act a different way" line, here is a perfect example: https://money.com/stubhub-fees-all-in-ticket-prices/
StubHub tried to do the right thing here, even touting their all-in pricing as an advantage over competitors - and customers still preferred their competitors' more opaque pricing practices anyway.
Point being, no company can afford to "do the right thing" if their competitors can do the "wrong thing" and be rewarded for that wrong thing. This is when government should step in.
StubHub tried to do the right thing here, even touting their all-in pricing as an advantage over competitors - and customers still preferred their competitors' more opaque pricing practices anyway.
Point being, no company can afford to "do the right thing" if their competitors can do the "wrong thing" and be rewarded for that wrong thing. This is when government should step in.
> this ease of price comparison has resulted in unbundling of services in a number of industries - e.g. airlines where the base price is akin to "we let you hang on to the wing"
<cough> I'm literally just booking a trip with Ryanair, Vienna to London, in just less than a month's time. It's costing me a shade less than $20 for a 770 mile flight, no hidden fees during my purchase...
No, it doesn't include a large carry-on bag, never mind a checked bag.
No, it doesn't include priority boarding.
No, it doesn't include reserved seating.
No, I won't earn any frequent-flyer miles/elite status.
Also, the in-flight F+B will be overpriced, so it's safer not to waste money there either.
However, for a two-hour flight and a short trip, I don't need any of those things!
I just want to get from A to B, safely, and preferably on-time. FR is at least as likely to do those two things as any of the 'legacy' carriers I could pick instead.
<cough> I'm literally just booking a trip with Ryanair, Vienna to London, in just less than a month's time. It's costing me a shade less than $20 for a 770 mile flight, no hidden fees during my purchase...
No, it doesn't include a large carry-on bag, never mind a checked bag.
No, it doesn't include priority boarding.
No, it doesn't include reserved seating.
No, I won't earn any frequent-flyer miles/elite status.
Also, the in-flight F+B will be overpriced, so it's safer not to waste money there either.
However, for a two-hour flight and a short trip, I don't need any of those things!
I just want to get from A to B, safely, and preferably on-time. FR is at least as likely to do those two things as any of the 'legacy' carriers I could pick instead.
These are all optional - you don't have to pay them if you don't use those services. They wouldn't be affected by this bill.
"Resort fees" or "amenity fees" are not optional. Even if you don't use the services in those fees, you still have to pay them. Those are what are being clamped down on.
"Resort fees" or "amenity fees" are not optional. Even if you don't use the services in those fees, you still have to pay them. Those are what are being clamped down on.
> These are all optional - you don't have to pay them if you don't use those services. They wouldn't be affected by this bill
I was responding to the comment about what the airlines' base price includes - at least here on this side of the pond, the base price is for safe travel (with a small carry-on bag) from A to B, and if that's all you want, it's all you need to pay.
I was responding to the comment about what the airlines' base price includes - at least here on this side of the pond, the base price is for safe travel (with a small carry-on bag) from A to B, and if that's all you want, it's all you need to pay.
For legitimately separable things—-like a carry-on bag or assigned seats—-I think unbundling is a good thing. Sure it feels a bit annoying to see the price go up and up, but sometimes you don’t need those things and the search engines should be able to get you an apples to apples price with a bit of elbow grease.
It’s the non-optional fees—- resort, regulatory compliance, or living wage—-that are truly pernicious.
It’s the non-optional fees—- resort, regulatory compliance, or living wage—-that are truly pernicious.
> I just want to get from A to B, safely, and preferably on-time
I was surprised to see that spirit is one of the most consistently on time airlines in the US. They really do provide exactly the service I'm looking for.
I was surprised to see that spirit is one of the most consistently on time airlines in the US. They really do provide exactly the service I'm looking for.
> This is also a case where consumers say they want one thing, but their behavior is a different matter. For example, pretty much everyone says they prefer the full price to be shown up front in search result pages. But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion, where there is a lower up-front price and fees are only tacked on during checkout.
You think your customers don't know what they're talking about...because the data you gleaned from abusing them says otherwise?
Dictator logic: "My approval rate is 100%! People clearly love what I'm doing!"
You think your customers don't know what they're talking about...because the data you gleaned from abusing them says otherwise?
Dictator logic: "My approval rate is 100%! People clearly love what I'm doing!"
> airlines where the base price is akin to "we let you hang on to the wing", and everything else is an upcharge
This legislation wouldn't stop that, nor resort fees, because they're not required.
It would however effect Airbnb, one of the worst offenders, because their fees are mandatory and not shown until checkout.
It's funny the government has exempted its own taxes and fees (the largest last minute fees we all pay everyday) from this requirement.
This legislation wouldn't stop that, nor resort fees, because they're not required.
It would however effect Airbnb, one of the worst offenders, because their fees are mandatory and not shown until checkout.
It's funny the government has exempted its own taxes and fees (the largest last minute fees we all pay everyday) from this requirement.
While i agree with you on the taxes front, one hard thing is that not everyone pays it. Depending on what's being sold and who the buyer is, the buyer may have tax exempt status, which may not be known until checkout.
I have lived in areas with sales tax all my life, and with the exception of gasoline, prices being shown with tax is exceedingly rare. At least these could be covered!
>But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion
I suspect this might be the case initially, but eventually consumers will get fed up with being tricked again and again and refuse to deal with that particular industry (and A/B testing won't predict that).
I know this is the case for myself and local services (e.g. cleaning, lawn mowing, appliance repair). I literally will not search for any of those things because I don't want to have to sort through bullshit.
Same thing for restaurants that expect a tip. I might uncomfortably pay it, but would never go back there. (note: tipping culture is very different in Australia compared to the US, as are minimum wage laws. Your local barrista is probably getting $35+ an hour on a weekend.)
I suspect this might be the case initially, but eventually consumers will get fed up with being tricked again and again and refuse to deal with that particular industry (and A/B testing won't predict that).
I know this is the case for myself and local services (e.g. cleaning, lawn mowing, appliance repair). I literally will not search for any of those things because I don't want to have to sort through bullshit.
Same thing for restaurants that expect a tip. I might uncomfortably pay it, but would never go back there. (note: tipping culture is very different in Australia compared to the US, as are minimum wage laws. Your local barrista is probably getting $35+ an hour on a weekend.)
Heh, or they’ll democratically decide to ban you from operating in their society if you use hidden fees. A/B testing won’t predict that, either.
The other reason is continued civic moral debasement.
We used to live in communities, whereing social mores were at least nominally respected or accepted. Even if they were broken, at minimum 'wrong was wrong' and in particular, reputation mattered.
We later moved into larger corporate entities wherein mores could be sidelined, and now we've flipped the game entirely and there are few civic questions to contemplate. It's just "The Funnel" and that's it.
Even if most people don't fully buy Milton Friedman's Chicago School 'the motive is only profit' stuff, the ideal set it.
VC-land and the Valley never even talk bother about civic good, consumer surplus etc. other than maybe in some situations a kind of DEI/Climate specific kind of ideological way. The baseline assumption is 'the product must be doing some kind of 'good' and if not who cares'. Commerce is generally positive but it's pretty easy to see where the frayed edeges are.
Dark Patterns abound, even by supposedly reputable companies. I don't think people realize how perverse this is and how it strongly degrades civil life. It's not good that we have to be worried about how we are being ripped off / misled by major companies we are supposed to trust.
Paradoxically, in the long run, most of it is not worth it. A small optimization in the funnel is not going to change anything.
We used to live in communities, whereing social mores were at least nominally respected or accepted. Even if they were broken, at minimum 'wrong was wrong' and in particular, reputation mattered.
We later moved into larger corporate entities wherein mores could be sidelined, and now we've flipped the game entirely and there are few civic questions to contemplate. It's just "The Funnel" and that's it.
Even if most people don't fully buy Milton Friedman's Chicago School 'the motive is only profit' stuff, the ideal set it.
VC-land and the Valley never even talk bother about civic good, consumer surplus etc. other than maybe in some situations a kind of DEI/Climate specific kind of ideological way. The baseline assumption is 'the product must be doing some kind of 'good' and if not who cares'. Commerce is generally positive but it's pretty easy to see where the frayed edeges are.
Dark Patterns abound, even by supposedly reputable companies. I don't think people realize how perverse this is and how it strongly degrades civil life. It's not good that we have to be worried about how we are being ripped off / misled by major companies we are supposed to trust.
Paradoxically, in the long run, most of it is not worth it. A small optimization in the funnel is not going to change anything.
>But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion, where there is a lower up-front price and fees are only tacked on during checkout.
That is evidence that bait and switch works, not that people want it.
That is evidence that bait and switch works, not that people want it.
I think OP recognizes that, but is simply stating that product decisions are based on user behavior, which rewards bait and switch
> But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion, where there is a lower up-front price and fees are only tacked on during checkout.
This just shows how much of a bubble sales people are in. Just because your sales data shows a better profit it doesn't mean it's not fraudulent.
This just shows how much of a bubble sales people are in. Just because your sales data shows a better profit it doesn't mean it's not fraudulent.
Yes please. Also kill tipping on food delivery apps. It's a mandatory fee, effectively. They ask for tips before service is even rendered. WTF? Just increase the displayed prices by 15%.
Well, of course bait-and-switch is going to result in a higher conversion rate than showing the price up front.
I'd like to not be swindled, but if the marketplace is half-swindlers and half-honest people, it's highly likely I'll be taken in by the former. What the kind of heuristic am I expected to use to avoid getting swindled?
I'd like to not be swindled, but if the marketplace is half-swindlers and half-honest people, it's highly likely I'll be taken in by the former. What the kind of heuristic am I expected to use to avoid getting swindled?
>What the kind of heuristic am I expected to use to avoid getting swindled?
Giant, bold text that says "price is all-inclusive. No additional fees!"
Giant, bold text that says "price is all-inclusive. No additional fees!"
At checkout, when there are no additional fees:
Customer: What is this extra fee on my bill?
Business: There is no extra fee.
Customer: It's this number right here. That's a fee. Why is it there?
Business: No no no. That's not a fee. It's for your benefit.
Consumer: What does that even mean?
Business: That's a final emolument that is used to keep costs for consumers low and fee-free. Everybody pays it, since it is for your safety and benefit. Final emoluments like this are mandated, since we are completely free of hidden fees.
Customer: What is this extra fee on my bill?
Business: There is no extra fee.
Customer: It's this number right here. That's a fee. Why is it there?
Business: No no no. That's not a fee. It's for your benefit.
Consumer: What does that even mean?
Business: That's a final emolument that is used to keep costs for consumers low and fee-free. Everybody pays it, since it is for your safety and benefit. Final emoluments like this are mandated, since we are completely free of hidden fees.
The most consumer-friendly outcome would be if all market participants used transparent pricing at each tier of product/service.
This maximizes what the consumer receives per dollar spent, because they can easily compare apples to apples and oranges to oranges across many competitors.
How about this for an A/B test (rhetorical): show consumers one universe where perfect competition is enforced like I describe above, and one universe where most market participants bait and switch customers, forcing them to shop for hours and then ending up paying more for less.
Or compare shopping at the grocery store vs shopping even the most fungible medical procedures between 2 hospitals :) (if you can even manage to shop the latter)
If you think consumers like to be tricked, you either need to zoom out of the narrow context where that seems to be true, or you’re financially incentivized to swindle the plebs.
This maximizes what the consumer receives per dollar spent, because they can easily compare apples to apples and oranges to oranges across many competitors.
How about this for an A/B test (rhetorical): show consumers one universe where perfect competition is enforced like I describe above, and one universe where most market participants bait and switch customers, forcing them to shop for hours and then ending up paying more for less.
Or compare shopping at the grocery store vs shopping even the most fungible medical procedures between 2 hospitals :) (if you can even manage to shop the latter)
If you think consumers like to be tricked, you either need to zoom out of the narrow context where that seems to be true, or you’re financially incentivized to swindle the plebs.
> This is also a case where consumers say they want one thing, but their behavior is a different matter. For example, pretty much everyone says they prefer the full price to be shown up front in search result pages. But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion, where there is a lower up-front price and fees are only tacked on during checkout.
I'll restate what at least one other commenter pointed out. If I, a consumer, say "I want transparent pricing," and then given transparent pricing I'm less likely to buy your product, that doesn't mean I was mistaken. It means the truth is that I don't want to buy your product, and you would have to lie to me in order to make a purchase more likely.
I'll restate what at least one other commenter pointed out. If I, a consumer, say "I want transparent pricing," and then given transparent pricing I'm less likely to buy your product, that doesn't mean I was mistaken. It means the truth is that I don't want to buy your product, and you would have to lie to me in order to make a purchase more likely.
Basically, bait and switch is an effective tactic, especially after factoring in the sunk cost fallacy.
It's become rampant in travel. Booked a simple vacation to Vegas recently. Between flights with their multiple fees you mentioned, hotels that almost are always charging a per day resort fee, and then ticket sales to any event that has multiple processing fees. I don't know how this happened but it's horrible.
The other thing is that, take airline pricing for example, 80% of consumers fly 0-2 round trips a year, and half of Americans don’t fly in a given year…which means that many consumers don’t do the repeat buying to get screwed and change their behavior, or want to spend several hours researching how to save $35…
It's not just comparison pricing. The online booking portals take a percent of the revenue. The Expedia tax is not very different than App Store taxes.
By requiring part of the fee to be paid directly to the hotel at check-in, it means the hotel gets to keep more of their revenue.
By requiring part of the fee to be paid directly to the hotel at check-in, it means the hotel gets to keep more of their revenue.
[deleted]
> airlines where the base price is akin to "we let you hang on to the wing", and everything else is an upcharge.
This would actually be a better situation. Instead the base price is "this would be what we would theoretically charge you to hang onto the wing, but since that's not legally allowed there's no possible way anyone could buy a ticket for this price." If they were selling food like that, there would be a "state-inspected and legal to sell quality upcharge."
This would actually be a better situation. Instead the base price is "this would be what we would theoretically charge you to hang onto the wing, but since that's not legally allowed there's no possible way anyone could buy a ticket for this price." If they were selling food like that, there would be a "state-inspected and legal to sell quality upcharge."
I read it as "customers would prefer if everyone showed prices upfront", ehich makes sense to me.
Australian ACCC just basically regulates how prices are displayed for everything. It makes it simple. GST inclusive everything is fair.
Tons of industries affected by this, though hospitality comes to mind as being particularly egregious. "resort fees" you can't get out of where they tell you what you're "getting" for those fees, Airbnb service fees, cleaning fees, things that should all be spread across the nightly rate. The feds doing this for airfare was the best thing to happen for consumers shopping for flights.
Ideally we would take it further and include restaurant fees post-covid for fair wages when instead they frankly should just be hiking the cost of food and paying their teams properly. Not sure if this bill affects the service industry specifically but the late tacking-on of mandatory fees is getting egregious.
---
Edit: I'm staying at an IHG property right now that says I'm getting the following for my $29 amenity fee:
• $15 credit for incidentals
• "premium" wifi
• newspaper access
• tablet from the front desk
• free Lyft within two miles (this is kinda useful if you're too lazy to walk)
• free EV charging
• wine reception
• business center
• gym
• free calls within CONUS
I used none of these and yet they won't refund the fee.
Ideally we would take it further and include restaurant fees post-covid for fair wages when instead they frankly should just be hiking the cost of food and paying their teams properly. Not sure if this bill affects the service industry specifically but the late tacking-on of mandatory fees is getting egregious.
---
Edit: I'm staying at an IHG property right now that says I'm getting the following for my $29 amenity fee:
• $15 credit for incidentals
• "premium" wifi
• newspaper access
• tablet from the front desk
• free Lyft within two miles (this is kinda useful if you're too lazy to walk)
• free EV charging
• wine reception
• business center
• gym
• free calls within CONUS
I used none of these and yet they won't refund the fee.
Those resort fees are the absolute worst for corporate travel. E.g., the budget for a hotel might be $300/night so you get one for $290/night. Then they tack on a $45/night "resort fee" and suddenly you're getting yelled at by accounting for going over your budget. That is, if you even remember to expense it since they charge it to your incidental card ...
I have never been surprised by a resort fee. If I search on Hilton/Marriott/etc websites, the total price shown when making the reservation is always what I am asked to pay.
I believe the resort fee is listed separately so that the hotel owner can reduce the amount of royalties paid to the hotel brand, since they get a 10% to 15% cut of revenue for accommodation charges, but presumably not for things like resort fees and whatnot.
I believe the resort fee is listed separately so that the hotel owner can reduce the amount of royalties paid to the hotel brand, since they get a 10% to 15% cut of revenue for accommodation charges, but presumably not for things like resort fees and whatnot.
Congrats. I have. Anecdote fight!
The point is, presumably, the websites of major hotel brands work the same for everyone. I would be interested in seeing an example of a “hidden” fee at a hotel.
Same with airline prices. Google flight search has always shown me the total price, as have the airline websites themselves.
Same with airline prices. Google flight search has always shown me the total price, as have the airline websites themselves.
>I would be interested in seeing an example of a “hidden” fee at a hotel.
Every single hotel room on the Vegas strip has a resort fee, for example. Try it yourself - when searching websites will list, say $50/night but when you actually go book it you'll see an additional significant "resort fee" on top of that. It makes it hard to compare prices - you will have to go to the checkout page to see what you'd actually pay.
Airlines have been required to list all mandatory fees in their prices since Jan. 26, 2012, by federal law.
Every single hotel room on the Vegas strip has a resort fee, for example. Try it yourself - when searching websites will list, say $50/night but when you actually go book it you'll see an additional significant "resort fee" on top of that. It makes it hard to compare prices - you will have to go to the checkout page to see what you'd actually pay.
Airlines have been required to list all mandatory fees in their prices since Jan. 26, 2012, by federal law.
I would not call that hidden, but rather obfuscated prices. Although, legislation to make pricing clearer and easier to compare is always welcome.
My experience is the same as yours. However I think these fees are still hidden in the sense that they're not part of the rate that's advertised everywhere, shown in the thumbnail on the hotel website, etc. It would be better if we could just trust that the advertised price would be the actual price.
I agree, the total average per night cost should be displayed in the same price on the initial search results.
I'm browsing the Marriot site right now and the hotels that are classified as a "resort" [1] all have a resort fee attached, in addition to the sticker price, after I select my room.
That's the default behavior, but a point in Marriot's favor is that you can at least select a checkbox to include taxes & fees in the quoted price. However it then bundles them together and I still can't see how much is required taxes and how much is the hotel's resort fee. I can only see that breakdown once I actually select my room.
[1] https://www.marriott.com/travel-experience/resort-hotels/
That's the default behavior, but a point in Marriot's favor is that you can at least select a checkbox to include taxes & fees in the quoted price. However it then bundles them together and I still can't see how much is required taxes and how much is the hotel's resort fee. I can only see that breakdown once I actually select my room.
[1] https://www.marriott.com/travel-experience/resort-hotels/
At Marriott they don’t charge resort fees for corporate rates.
> cleaning fees, things that should all be spread across the nightly rate.
The thing is, cleaning genuinely costs a bunch when a guest departs. It’s a per-stay cost.
This doesn’t mean it’s reasonable to hide it. Having a rate structure that has a nightly rate plus a per-visit rate or, equivalently, a first-night rate and an additional-night rate is just fine as long as it’s advertised. And a search for a stay of a given duration should show the all-in price.
The thing is, cleaning genuinely costs a bunch when a guest departs. It’s a per-stay cost.
This doesn’t mean it’s reasonable to hide it. Having a rate structure that has a nightly rate plus a per-visit rate or, equivalently, a first-night rate and an additional-night rate is just fine as long as it’s advertised. And a search for a stay of a given duration should show the all-in price.
I'm OK with the concept of cleaning fees as long as
a) when I search for a place to stay for x nights, the cleaning fee should be amortized into the nightly rate (protip- Airbnb's website will do so if it thinks you're in Australia)
b) I don't have to do chores. It's super irritating to pay a $300 cleaning fee, then check in and see that the host expects me to to wash the sheets, do the dishes, take out the trash, sweep the patio, and water the plants.
a) when I search for a place to stay for x nights, the cleaning fee should be amortized into the nightly rate (protip- Airbnb's website will do so if it thinks you're in Australia)
b) I don't have to do chores. It's super irritating to pay a $300 cleaning fee, then check in and see that the host expects me to to wash the sheets, do the dishes, take out the trash, sweep the patio, and water the plants.
> The thing is, cleaning genuinely costs a bunch when a guest departs. It’s a per-stay cost.
And how can hotels magically factor it in the room cost?
Ok maybe not in the US.
And how can hotels magically factor it in the room cost?
Ok maybe not in the US.
> just fine as long as it’s advertised
I completely agree, but would like to make the observation that if they're forced to advertise it properly, then something different is likely to happen.
Businesses like to find places to give "discounts" to make their prices seem cheaper. This is an excellent opportunity. They would list a nightly rate, and offer discounts for multiple night stays.
I completely agree, but would like to make the observation that if they're forced to advertise it properly, then something different is likely to happen.
Businesses like to find places to give "discounts" to make their prices seem cheaper. This is an excellent opportunity. They would list a nightly rate, and offer discounts for multiple night stays.
I agree with you on almost all of this, but I think the cleaning fee is different. It represents an actual cost for an actual activity. I think AirBnb should show initial totals with it included, so you're never surprised by it. But it shouldn't be rolled up into the nightly rate because it really is a one-off.
As an example, right now I'm looking at doing an extended trip, on the order of 2-4 weeks. I just need one cleaning at the end. If they inflate the daily rate to cover cleaning, I'll end up paying a lot more than the average weekender trip. Or if they hide it in a variable price, then I'll have a hard time comparing different lengths of stays across different places.
As an example, right now I'm looking at doing an extended trip, on the order of 2-4 weeks. I just need one cleaning at the end. If they inflate the daily rate to cover cleaning, I'll end up paying a lot more than the average weekender trip. Or if they hide it in a variable price, then I'll have a hard time comparing different lengths of stays across different places.
> I think AirBnb should show initial totals with it included, so you're never surprised by it. But it shouldn't be rolled up into the nightly rate because it really is a one-off.
I disagree with this, and it's easily handled on the backend too. If the cleaning fee is e.g once per trip or once every few days, smear that cost across the cost of the stay for your effective nightly rate.
Frankly, how much it costs to clean a unit shouldn't be a separate calculus when comparing rooms. What ultimately matters is how much I'm out of pocket by the end of the trip, and that's most easily compared by showing the customer the effective nightly rate for the date range being searched. Do the breakdown later, sure, but the effective nightly rate is what should be shown first. Or even just the total for the stay, but no weirdness with fees where those fees can be smeared.
Last tidbit: cleaning fees are another profit vehicle for Airbnb sellers; rarely is the fee the same as what the seller is paying the cleaning service.
I disagree with this, and it's easily handled on the backend too. If the cleaning fee is e.g once per trip or once every few days, smear that cost across the cost of the stay for your effective nightly rate.
Frankly, how much it costs to clean a unit shouldn't be a separate calculus when comparing rooms. What ultimately matters is how much I'm out of pocket by the end of the trip, and that's most easily compared by showing the customer the effective nightly rate for the date range being searched. Do the breakdown later, sure, but the effective nightly rate is what should be shown first. Or even just the total for the stay, but no weirdness with fees where those fees can be smeared.
Last tidbit: cleaning fees are another profit vehicle for Airbnb sellers; rarely is the fee the same as what the seller is paying the cleaning service.
Isn't this:
> shouldn't be a separate calculus when comparing rooms
Solved by this:
> AirBnb should show initial totals with it included, so you're never surprised by it.
The reason I put it that way is that the "smear that cost across the cost of the stay for your effective nightly rate" is hiding a number that I then have to reverse engineer if I'm looking at stays of different lengths. Since I work remotely, I could easily stay an extra week or two, but I won't do it in a place that is going to gouge me for cleaning I don't need.
> shouldn't be a separate calculus when comparing rooms
Solved by this:
> AirBnb should show initial totals with it included, so you're never surprised by it.
The reason I put it that way is that the "smear that cost across the cost of the stay for your effective nightly rate" is hiding a number that I then have to reverse engineer if I'm looking at stays of different lengths. Since I work remotely, I could easily stay an extra week or two, but I won't do it in a place that is going to gouge me for cleaning I don't need.
>If the cleaning fee is e.g once per trip or once every few days, smear that cost across the cost of the stay for your effective nightly rate.
This misses the point that it's useful to have the one-time costs separated from the nightly costs so that consumers can better understand if they can get a better nightly cost by extending their stay (or even ideally from having options over those fixed costs.) It's the same logic as separating shipping costs from unit costs in online sales, because you can often save on shipping by spreading the cost across multiple units and it benefits the consumer to know this.
This misses the point that it's useful to have the one-time costs separated from the nightly costs so that consumers can better understand if they can get a better nightly cost by extending their stay (or even ideally from having options over those fixed costs.) It's the same logic as separating shipping costs from unit costs in online sales, because you can often save on shipping by spreading the cost across multiple units and it benefits the consumer to know this.
This misses the point that it's not useful to have the one-time costs separated from the nightly costs when trying to compare options.
I think we all agree that the totals should include everything, as that makes comparison better. But I am precisely saying that there should be someplace where the legitimate one-time costs should be separated out because it is useful to me.
Multiple people have explained how it's useful to them. Do you think these people are all jointly deluded in the exact same fashion?
Even better, show total price not nightly rate. They'd never do that though because showing the nightly rate holds off the total sticker shock until the user has their credit card in hand.
>how much it costs to clean a unit shouldn't be a separate calculus when comparing rooms
The cost to clean shouldn't. The fact that there's a large fixed charge that's going to be amortized across the number of nights you're staying is relevant though.
Yes, by all means give me the total amount for the stay length. But show me any fixed charges so that I can maybe decide it makes sense to stay longer given part of the cost is fixed.
The cost to clean shouldn't. The fact that there's a large fixed charge that's going to be amortized across the number of nights you're staying is relevant though.
Yes, by all means give me the total amount for the stay length. But show me any fixed charges so that I can maybe decide it makes sense to stay longer given part of the cost is fixed.
I definitely wouldn't mind it broken out in the details section but the main displayed price should always reflect all costs (including taxes!) IMO. If I'm going to need to do math on the pricing it should be for the corner cases like comparing the daily price of stays at different places for different lengths of time not for finding out how much something costs on its own.
Totally agreed. I lived for a time in Australia, where all the prices included tax. The price you saw was the price you paid. When I got back to the US, I wondered what the hell was wrong with me that I spent my life seeing our much more confusing system as reasonable.
That and the way our income taxes work are two of the most annoying things that the anti-tax right have "won" in the US. Everyone's life is made a little worse all the time, in the name of some I-suspect-imaginary "awareness campaign" to increase resistance to taxes. In fact I doubt there'd be any less awareness if they'd just mandate that tax be itemized and given sufficient weight on receipts, and that the IRS mail out some tax-burden statement for the ~90% of people who shouldn't, in a well-functioning system, need to manually fill out and file anything.
It has way less to do with any "awareness campaign" and more to do with how tax rates are different in many municipalities that are very close to each other and how hard that makes advertising.
For instance, the famous "$5 footlong" from Subway couldn't be advertised that way nationally, or even within a single state or metro area due to different taxes on prepared food.
For instance, the famous "$5 footlong" from Subway couldn't be advertised that way nationally, or even within a single state or metro area due to different taxes on prepared food.
I'm pretty skeptical there. Do you have any evidence that was a big motivation?
I'll note that the costs of labor, space, and other inputs also can vary widely across a state, so tax differences don't strike me as unsolvable. And regardless, "prices and participation may vary" is an extremely common disclaimer for ads with prices.
I'll note that the costs of labor, space, and other inputs also can vary widely across a state, so tax differences don't strike me as unsolvable. And regardless, "prices and participation may vary" is an extremely common disclaimer for ads with prices.
Subway national ads & coupons (among other practices) in particular are notorious for immiserating or ruining their own franchisees. My nearest one keeps a sheet with the list of the ones they'll actually honor.
I wanna say Little Caesars had kind of a similar situation. I think they actually had a fight at one point with their franchisees over their too-static-to-be-realistic very-low prices.
In practice, these national campaigns seem to kinda be a bad thing, anyway—either abusing franchisees who can't evade them, or else not actually being offered universally (which is pretty damn close to false advertising, "participating locations" fine-print being more a bullshit dodge than something intended to truly communicate the truth of the offer).
I wanna say Little Caesars had kind of a similar situation. I think they actually had a fight at one point with their franchisees over their too-static-to-be-realistic very-low prices.
In practice, these national campaigns seem to kinda be a bad thing, anyway—either abusing franchisees who can't evade them, or else not actually being offered universally (which is pretty damn close to false advertising, "participating locations" fine-print being more a bullshit dodge than something intended to truly communicate the truth of the offer).
Why is that an issue? Subway could easily find another campaign, such as “$5* footlong (*or less depending on local taxes)”, “affordable footlong”, or whatever. If your advertising campaign depends on being deceptive, I find no issue with it becoming impossible.
Are local sales taxes just a US thing? How do so very many other developed countries manage this just fine?
The US, thanks to being well, states that are united, has a history of devolved government. In a lot of places the power structures are much more unified, but here there's a tradition of independence within broad limits.
There's a short history of California sales taxes here on page 3 (which is ~30 by PDF page count): https://www.ppic.org/wp-content/uploads/content/pubs/report/...
But basically during the depression, state-level sales taxes arose in a lot of places. Some cities/counties/districts then got in on the action. This means that people got to decide their own levels of taxation (and spending) on a much more granular level. Which as somebody who lives in a high-tax/high-service area (relative to America, not to the civilized world) is great by me.
There's a short history of California sales taxes here on page 3 (which is ~30 by PDF page count): https://www.ppic.org/wp-content/uploads/content/pubs/report/...
But basically during the depression, state-level sales taxes arose in a lot of places. Some cities/counties/districts then got in on the action. This means that people got to decide their own levels of taxation (and spending) on a much more granular level. Which as somebody who lives in a high-tax/high-service area (relative to America, not to the civilized world) is great by me.
Careful what you wish for—it causes strong race-to-the-bottom effects and tragedies of the commons / free-rider problems—if tax districts are small enough, I can go enjoy the parks in a neighboring tax district while having chosen to live where taxes are insufficient to pay for such nice parks. Extend for everything, not just parks, and you've got the situation in tons of major US cities, where low-tax suburban and exurban towns attract people who pay taxes in their little town but strain the public resources of the city proper, which city is the only reason those towns are 1/10 the size they are in the first place. City forced to raise taxes by all the free-riding, effect intensifies. It's not great.
interestingly, sales tax in San Francisco (8.63%) is noticeably lower than in the Easy Bay (10.25%).
replacing big ticket items such as a macbook pro 16” ends up being about $40 cheaper, especially for someone commuting into the city for work anyway.
replacing big ticket items such as a macbook pro 16” ends up being about $40 cheaper, especially for someone commuting into the city for work anyway.
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You can, you just do the math backward so it’s $5 everywhere (or $6 or whatever).
From a compliance perspective that would work. However, that means that franchisees in high-tax areas like Chicago make 10% less per sale than those in Oregon or Delaware. That doesn't seem tenable in the long run.
I mean franchises in high cost areas already deal with this and survive. Or, as written, “at participating locations.”
The cleaning fee is part of doing business. I don’t pay my taxi driver for car registration or oil changes either.
The cleaning is a one time fixed cost for a stay. It's the same for a one night stay or a week long stay. There is a one to one expense per "purchase". Not so with your taxi example.
Actually taxis handle this in their fee structure already: a fixed initial cost and a marginal rate for additional mileage/time.
You do, but it is apart of the charging model. They accounted for wear and tear on the car and baked that into their rate. if their rate is 10 cents a mile they transport you, maybe 0.01 cent of that that 0.10/mile is the cost of wear and tear. It isn't a separate charge. Which is how hotels should handle cleaning. Yea, your technically paying for it, but isn't a separate fee. It is just included with the price of the room just as project wear and tear costs are baked into the taxi service rate.
These people are making money hand over fist, cleaning should be on the hosts, it is their duty to provide clean accommodation.
I don't even understand this.
I show up at a clean place. After I leave, somebody needs to clean up after me to make it good for the next person. No matter who does the cleaning, the hosts or somebody they hire, this takes supplies and labor. The only person putting money in is me, so the cleaning obviously has to be on my dime. I just want the pricing to be transparent in the details and included in the headline numbers.
I show up at a clean place. After I leave, somebody needs to clean up after me to make it good for the next person. No matter who does the cleaning, the hosts or somebody they hire, this takes supplies and labor. The only person putting money in is me, so the cleaning obviously has to be on my dime. I just want the pricing to be transparent in the details and included in the headline numbers.
It should be factored into the up-front price. Do they include the cost of the inventory and snacks in the price?
The host wants to make money from a room, it is in their interest to keep it clean for their guest, because they are the ones making profit from it.
Making the room habitable and desirable is their cost in order for you to spend money on their service.
The host wants to make money from a room, it is in their interest to keep it clean for their guest, because they are the ones making profit from it.
Making the room habitable and desirable is their cost in order for you to spend money on their service.
I read it as the person making the money being responsible for cleaning, which makes sense — it’s quite literally their job and they’re way more familiar with the local market for cleaning services.
Huh. I hadn't thought of that. Is there some circumstance in which the hosts aren't responsible for cleaning for the next guest? I was talking about cleaning fees charged by the host, which would seem to imply them responsible in that sense.
> It represents an actual cost for an actual activity.
It really doesn't. It's been a stealth way to increase your rates for a long time now.
> I think AirBnb should show initial totals with it included, so you're never surprised by it.
They do, but it makes comparing rentals (both within AirBnB and across services) a pain in the ass, because it's not factored into the initial rate-per-night that you see and that they sort by if you ask them to show cheapest-first. [EDIT] I glossed over the "should" when reading the parent for this part—whoops. I thought they meant it's included once you're into the actual listing, not on the list-of-listings page, which is already, but which isn't enough. I stand by the first part—cleaning fees rarely represent the "actual cost" of the activity, on US AirBnB.
It really doesn't. It's been a stealth way to increase your rates for a long time now.
> I think AirBnb should show initial totals with it included, so you're never surprised by it.
They do, but it makes comparing rentals (both within AirBnB and across services) a pain in the ass, because it's not factored into the initial rate-per-night that you see and that they sort by if you ask them to show cheapest-first. [EDIT] I glossed over the "should" when reading the parent for this part—whoops. I thought they meant it's included once you're into the actual listing, not on the list-of-listings page, which is already, but which isn't enough. I stand by the first part—cleaning fees rarely represent the "actual cost" of the activity, on US AirBnB.
> > It represents an actual cost for an actual activity.
> It really doesn't. It's been a stealth way to increase your rates for a long time now.
Two things can be true at once.
Cleaning is an actual activity they actually have to do after I leave. There are actual costs. E.g., they might use a service that specializes in vacation rental cleaning: https://cleaningglow.com/san-francisco-services/vacation-ren...
Do some people inflate the fee as a way of increasing your rates? Surely. But that's only a problem when the comparison price doesn't include it, a problem I agree we should solve. I'd just like the fee to also be listed somewhere, as it makes other comparisons easier for some people, me included.
> It really doesn't. It's been a stealth way to increase your rates for a long time now.
Two things can be true at once.
Cleaning is an actual activity they actually have to do after I leave. There are actual costs. E.g., they might use a service that specializes in vacation rental cleaning: https://cleaningglow.com/san-francisco-services/vacation-ren...
Do some people inflate the fee as a way of increasing your rates? Surely. But that's only a problem when the comparison price doesn't include it, a problem I agree we should solve. I'd just like the fee to also be listed somewhere, as it makes other comparisons easier for some people, me included.
It's so common on US airbnb that I expect it's practically necessary to shift some margin to the "cleaning fee" to stay competitive (you'll get out-"bid" by others who have).
I objected to "actual cost", not "actual activity". Yes, they clean (usually...). No, it doesn't cost anywhere near what they're charging, unless you left the place such a wreck that you're getting a 1-star guest rating.
I objected to "actual cost", not "actual activity". Yes, they clean (usually...). No, it doesn't cost anywhere near what they're charging, unless you left the place such a wreck that you're getting a 1-star guest rating.
Depends on the Airbnb, I guess. I've definitely looked at places where the cleaning fee struck me as about market price. And I'm much more likely to stay at a place like that as it increases my trust in the host, so maybe the margin-shifting doesn't work for everybody.
It is factored in here in Europe. So the issue isn't the fee itself, but that in other jurisdictions it's hidden.
Right, if it's factored in, that's fine. It'd also automatically remove the incentive to pad the cleaning fee, which is so common in the US that I expect it's hard to compete in listings without doing it (without hiding some of your margin in the cleaning fee, that is).
By that logic, they should also charge independently for: rolls of toilet paper used, water used, electricity, booking fee, advertising fee, email fee, listing fee...
Probably not, in that those are either too small to be worth the cost of metering or not representative of actual direct costs.
The point isn't that it isn't a real fee (it may or may not be), but that it isn't advertised up front.
A company can throw whatever fees they want at me as long as it's in the up front cost.
> The feds doing this for airfare was the best thing to happen for consumers shopping for flights.
They need to redo it for airfare, because the airlines have figured out how to workaround it by splitting out things that used to be included (seat assignment, baggage, etc). Some airlines now have sliding rates for bags and so you have to know the exact flight to get the price for checked or carry-on bags. Even if it's split out from the total, all of those *potential* fees should be available up-front as well.
They need to redo it for airfare, because the airlines have figured out how to workaround it by splitting out things that used to be included (seat assignment, baggage, etc). Some airlines now have sliding rates for bags and so you have to know the exact flight to get the price for checked or carry-on bags. Even if it's split out from the total, all of those *potential* fees should be available up-front as well.
I remember ages ago, Canadians were getting ads for airfare that was like $67 return to Las Vegas/Cuba/London, and then you get the total and it's "+ $550 in taxes, service fees, fuel surcharges, airport improvement fees" etc.
All my friends found it pretty hilarious; there's such a thing as marking up a sale once the consumer is invested, but when the actual cost is several times more than the advertised price it's a lot easier to say nope, no thanks.
All my friends found it pretty hilarious; there's such a thing as marking up a sale once the consumer is invested, but when the actual cost is several times more than the advertised price it's a lot easier to say nope, no thanks.
We need something for pricing dishes differently based on pick-up or delivery. Stop hiding the actual cost of delivery in the prices of the dishes! You shouldn't have to look at two different menus to figure out how much delivery costs.
The main reason for the resort fee is the 3rd party booking.
3rd party charges 14-18% commission, and a lot of big hotel uses resort fee to reduce the commission.
I just wish the big brand uses the power like airlines (3% commission) and negotiate the commission down to 3%.
3rd party charges 14-18% commission, and a lot of big hotel uses resort fee to reduce the commission.
I just wish the big brand uses the power like airlines (3% commission) and negotiate the commission down to 3%.
Taxes and fees should be mandated for all prices up front.
This is how it works in most of the world, there's no good reason it shouldn't work that way here in the US.
Someone will come along and point out an edge case, but for the vast majority of retail situations this is doable.
This is how it works in most of the world, there's no good reason it shouldn't work that way here in the US.
Someone will come along and point out an edge case, but for the vast majority of retail situations this is doable.
And it's better for businesses too! They get to compete on honest things like quality and cost, not BS like tricking you into weird fees.
If it was better for businesses it would already be the common practice.
Not at all. A great example is health codes.
Serving good, safe food is something pretty much every food business wants to do at the outset. Nobody opens a restaurant thinking, "Let's see who we can get sick!" But imagine your hamburger stand is next to a guy who's willing to cut corners. Use the older meat. Buy from the dodgier supplier. Maybe spend less labor time cleaning. Suddenly his prices are lower and you're losing business. Other restaurants nearby are too. You're faced with a choice: do you cut corners, or go out of business?
So if you talk with restaurateurs, you'll find that most of them are in favor of health codes and health inspections, because although they can be a pain, they're keeping competitors on a level playing field. They like food safety laws for suppliers even though they make prices higher, because they don't want to have to worry about giving their customers unsafe or suspicious food.
Serving good, safe food is something pretty much every food business wants to do at the outset. Nobody opens a restaurant thinking, "Let's see who we can get sick!" But imagine your hamburger stand is next to a guy who's willing to cut corners. Use the older meat. Buy from the dodgier supplier. Maybe spend less labor time cleaning. Suddenly his prices are lower and you're losing business. Other restaurants nearby are too. You're faced with a choice: do you cut corners, or go out of business?
So if you talk with restaurateurs, you'll find that most of them are in favor of health codes and health inspections, because although they can be a pain, they're keeping competitors on a level playing field. They like food safety laws for suppliers even though they make prices higher, because they don't want to have to worry about giving their customers unsafe or suspicious food.
Great analogy, never thought of it this way.
It's not an analogy, it's actually happening. I think you mean "example."
Great analogy, thanks!
No, it’s a coordination problem. If you’re the only one hiding your prices in fees, it can be an advantage since it looks like you’re charging less. Everyone has to do it to keep up, but since everyone does it, no one really gets an advantage. With mandated transparent pricing, no one has an opportunity to “cheat” and everyone can specialize (in cost or quality or features/amenities, or some mix of those).
This is a world wide problem. After traveling in Europe, I think it is a global issue and quite bad in Europe.
https://www.tripadvisor.com/ShowTopic-g187234-i138-k10962835...
https://wise.com/gb/blog/transparency-an-open-letter-from-th...
Banks across the European Union slap customers with hidden fees, offer financial advice that can turn out to be harmful and provide inadequate information to consumers before they sign up for accounts, according to a report released Tuesday by the European Commission.
https://www.tripadvisor.com/ShowTopic-g187234-i138-k10962835...
https://wise.com/gb/blog/transparency-an-open-letter-from-th...
Yes. Just require that the price you see is the price you pay. Full stop, no exceptions, not even tax or tip. But I guess I'll take this step in the right direction.
Or just abolish sales tax. If the states want the money, they can just raise state income tax, which they're already charging, by a few percent. As it is now, it just complicates things and disincentivizes consumers from making purchases, which slows down the local economy.
Income taxes deter saving and investment, but are easier to target.
Sales taxes are hard to make progressive (they're usually regressive) and can be harder to enforce (if they're local).
It depends on your goals. It sort of makes sense that we have both, at differing rates.
Sales taxes are hard to make progressive (they're usually regressive) and can be harder to enforce (if they're local).
It depends on your goals. It sort of makes sense that we have both, at differing rates.
While I agree with you mostly, why wouldn’t you call sales tax progressive? The more you earn, the more you will spend, so the more you pay.
The big issue I have with sales tax is that it is a much worse solution to the problem than a simple value-added tax (VAT). Most countries have figured out that VAT is more difficult to cheat.
The big issue I have with sales tax is that it is a much worse solution to the problem than a simple value-added tax (VAT). Most countries have figured out that VAT is more difficult to cheat.
Poor people tend to spend a higher percentage of their income, and invest a lower percentage. So, they end up paying a higher percentage of their incomes in sales tax, on average.
That’s true but on the other hand if you never spend money then it’s not providing you any advantage. Money is only useful if it’s spent. In that sense a flat sales tax is the “fairest” since it reflects the actual chosen consumption of that individual.
(I know this isn’t true in practice because of exclusions from sales taxes, but we could imagine one that applied to all consumption.)
(I know this isn’t true in practice because of exclusions from sales taxes, but we could imagine one that applied to all consumption.)
No, another thing money does besides fueling consumption is fueling investment, which generates yet more money.
There is some strange axiomatic derivation happening in this thread. The term "regressive tax" has a specific meaning; we can just start with that as an axiom, rather than re-deriving all of economics. A regressive tax is simply one that takes a higher percentage of income from low-income taxpayers than high-income taxpayers.
There is some strange axiomatic derivation happening in this thread. The term "regressive tax" has a specific meaning; we can just start with that as an axiom, rather than re-deriving all of economics. A regressive tax is simply one that takes a higher percentage of income from low-income taxpayers than high-income taxpayers.
Yes that is generally common sense reasoning but it is called regressive because then poor people spend a larger % of their income.
Honestly seems like some mental gymnastics to me to argue that regressive is about what % of income is spent on taxes rather than amount of taxes paid but that's the argument.
Honestly seems like some mental gymnastics to me to argue that regressive is about what % of income is spent on taxes rather than amount of taxes paid but that's the argument.
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That's the definition of a regressive tax.
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Income tax is generally state and federal, sales tax is usually municipal and county.
It's a lot harder for a city to collect income tax than sales tax.
It's a lot harder for a city to collect income tax than sales tax.
You’re describing Oregon.
Sales tax rates change too often in the US for this to work. I like the idea in concept, but I can understand why it doesn't work in practice in the US given the current tax regime.
How often is sales tax changing that it becomes infeasible to update the shelf price tags? The grocery stores seem to handle it just fine changing the "buy one get one" type tags every month!
A lot harder to do online without knowing the zip code . People are sometimes vary of sharing that just to see full price
I think anonymous online price viewing would have to exclude tax for that reason but e.g. being logged into Amazon it would be best to display the default/selected taxes for ship address. I believe this is how most places, including Amazon, do shipping time estimates today - generic unless specified or you're logged in.
In general though I think physical storefronts would be the shoe in. Virtual might require more thought or even changes to how we do taxes to make as much sense.
In general though I think physical storefronts would be the shoe in. Virtual might require more thought or even changes to how we do taxes to make as much sense.
Sites have already solved that for shipping costs - you just have a button that offers to include shipping (and then tax) with a location entered
Two solutions:
a) Universal sales tax within the state. Allow local governments some other varying taxes (such as income or paycheck tax)
b) Put small bracket under the price “(includes 9.5% sales tax for zip 98210 <a>change location</a>)”
a) Universal sales tax within the state. Allow local governments some other varying taxes (such as income or paycheck tax)
b) Put small bracket under the price “(includes 9.5% sales tax for zip 98210 <a>change location</a>)”
They aren't changing every single tag in the store.
I'd hope not every month! But even if taxes changed yearly is that really a large burden? How many things even stay in the same shelf at the same price for 1 year straight as it is, how many dozens of times was that shelf already restocked and inventoried compared to how often the price tag would need to be replaced due to taxes changing?
In my state, taxes change at least twice a year, and usually 3 times at a minimum. Changing what shelf products are on is a continuous, incremental thing- changing every tag in the store for tax changes would have to happen overnight for all products, on specific nights each year.
Many stores like to pre-tag each product package, either at the store or manufacturer- you couldn't do that if the tax had to be included in the price as the stores have many locations each with different tax rates. (I do think the tax rates should be prominently posted at the door).
Sales tax compliance is already a massive PITA for retail stores. Making them include the sales tax on the tag would just be an even bigger PITA.
Many stores like to pre-tag each product package, either at the store or manufacturer- you couldn't do that if the tax had to be included in the price as the stores have many locations each with different tax rates. (I do think the tax rates should be prominently posted at the door).
Sales tax compliance is already a massive PITA for retail stores. Making them include the sales tax on the tag would just be an even bigger PITA.
So what? I'd rather it be a corporate pain - in which people will get paid to deal with bs - rather than a buyer pain - in which all our lives are that much more frustrating. Plus, changing price tags? That's the pain? Changing tags??? Doing the math that's done at the register 1000x/sec and printing it on cards?
3 times a year minimum does sound pretty insane - I'd be all for fixing that before fixing price labeling. Do you mind me asking which state that is? In Indiana we've changed the sales tax 4 times since introducing it in 1963 (and don't actually collect it for the grocery example like most states), I shudder to think what the point of changing it 4 times in a year would be.
Even if they were, Eink tags that can be updated wirelessly are dirt cheap (certainly not as cheap as paper tags, but you also dont have to pay someone to go around and change them).
If they know how much to charge me at the payment step, they know what price to put on the shelf. Everything else is just making excuses for keeping it as opaque as it has always been in the US.
Yes, it can get a bit more complicated for internet based stores, but even there they do already know how much to charge at the payment step, so again I say that it is a (customer hostile) choice not to show the real price up front.
Yes, it can get a bit more complicated for internet based stores, but even there they do already know how much to charge at the payment step, so again I say that it is a (customer hostile) choice not to show the real price up front.
> If they know how much to charge me at the payment step, they know what price to put on the shelf.
On the shelf, yes, but then what's on the shelf wouldn't match what's advertised on the Internet, in the paper, on TV and radio, etc. Because each city can have its own sales tax, and each state can have its own sales tax, if you're, say, McDonald's, you can't say a hamburger is $3.00 in your TV ad because it'll be $3.18 in Michigan, and $3.30 in California, and even within the states, it can vary by city, if I recall correctly from my cash register programming days. It's a stupid system all around, but it does actually make it harder to do what everyone wishes they would do.
On the shelf, yes, but then what's on the shelf wouldn't match what's advertised on the Internet, in the paper, on TV and radio, etc. Because each city can have its own sales tax, and each state can have its own sales tax, if you're, say, McDonald's, you can't say a hamburger is $3.00 in your TV ad because it'll be $3.18 in Michigan, and $3.30 in California, and even within the states, it can vary by city, if I recall correctly from my cash register programming days. It's a stupid system all around, but it does actually make it harder to do what everyone wishes they would do.
> ...if you're, say, McDonald's, you can't say a hamburger is $3.00 in your TV ad because it'll be $3.18 in Michigan, and $3.30 in California...
That really sounds like a McDonalds problem. Why should everyone put up with a bait and switch so huge companies can have an easier time advertising? If they need to advertise a 3$ burger all over the country, then they should be ready to pay the cost differences of providing that burger everywhere.
That really sounds like a McDonalds problem. Why should everyone put up with a bait and switch so huge companies can have an easier time advertising? If they need to advertise a 3$ burger all over the country, then they should be ready to pay the cost differences of providing that burger everywhere.
Even within the same city you can have multiple different sales tax zones.
"there's no good reason it shouldn't work that way here in the US"
There is a good reason for taxes to be shown separately: it draws your attention to how much the government is charging you.
Like you'd, I'd prefer prices to show the total amount I have to pay, but I accept that there is at least one good reason against the situation common where I'm from (the UK).
There is a good reason for taxes to be shown separately: it draws your attention to how much the government is charging you.
Like you'd, I'd prefer prices to show the total amount I have to pay, but I accept that there is at least one good reason against the situation common where I'm from (the UK).
VAT is still shown on receipts in the UK same as it is in the US.
What’s annoying in the US is sales tax isn’t applicable to a range of items depending on the state and often not at all on services. When it’s included in the price there’s no surprises at the register.
What’s annoying in the US is sales tax isn’t applicable to a range of items depending on the state and often not at all on services. When it’s included in the price there’s no surprises at the register.
VAT is still shown on receipts in the UK same as it is in the US.
I think most Brits know VAT is 20%. If they don't it's because it's changed three times in the last 15 years.
I couldn't even tell you what the California sales tax is without referencing this table.
https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx
I couldn't even tell you what the California sales tax is without referencing this table.
https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx
Nothing stops you from printing it on the receipt, or putting it in the sign. Just don't force the buyer to do the math themselves.
This obscures the tax burden from the end user, transparently blending it with the price of the goods and the merchant's profit.
Consumers should be consciously aware of the split.
Consumers should be consciously aware of the split.
Airlines are required to advertise total price, but break out taxes at purchase. This is a solved problem.
https://www.transportation.gov/policy/aviation-policy/airlin...
https://www.transportation.gov/policy/aviation-policy/airlin...
[deleted]
In Europe I still haven't seen a bill without the VAT clearly shown in the final bill. I've also seen shops showing the two prices, one without the VAT, one with. But if only one is shown, it should be the one I will pay.
That's because it's illegal in the EU to display or advertise a price to a consumer (ie not another business) without VAT added.
So, the same reason we can't have the convenience of pre-filled tax returns from the IRS? People need to be able to feel the pain of the taxes they pay, because it might help bring them closer to the ideological conservative viewpoint.
If the taxes are just and sensible, you have nothing to fear.
If the taxes are silly and ridiculous (which many are), then they should be rolled back and people should know about them. That's not conservative, it's just common sense.
If the taxes are silly and ridiculous (which many are), then they should be rolled back and people should know about them. That's not conservative, it's just common sense.
Why would ensuring people know how much they are paying in taxes be a bad thing?
You can do that without making them do all the paperwork. For nearly all taxpayers the IRS already knows how much you owe, and can give you a return that is already filled out. But people like Grover Norquist believe that anything that makes paying taxes easier will cause people to become more accepting of taxation in the first place. So we all need to suffer the pain of filling out a return from scratch, to make sure we have the right attitude towards taxes.
Nobody is having the information hidden from them in any case. Even pre-filled from the IRS, it would be right in front of you.
Nobody is having the information hidden from them in any case. Even pre-filled from the IRS, it would be right in front of you.
It's not so much the concept that's bad as the proposed execution. Bold the amount that came from tax next to the total on the receipt or similar, it'll have the same effect without requiring people agree it's more important than knowing what the actual price of something is going to be.
1) There are other ways to do that that don't annoy people so much.
2) Surveys about understanding of how taxes work, of personal or typical tax burden, and even about whether a given individual believes they were affected by some new high-profile tax law or other (versus whether they actually were...) demonstrate pretty damn conclusively that this approach has entirely failed, anyway.
2) Surveys about understanding of how taxes work, of personal or typical tax burden, and even about whether a given individual believes they were affected by some new high-profile tax law or other (versus whether they actually were...) demonstrate pretty damn conclusively that this approach has entirely failed, anyway.
Sellers can still make it very clear how much of the sum were taxes.
Here in Germany every bill, every receipt will contain that information. (I mean, obviously, it’s legally required.)
Different sellers do this differently in terms of clarity, though I think this has little to do with any kind of price signal to the buyer or sticking it to the government or something like that.
My feeling is that the more likely it is that the customer is a company (which do not have to pay VAT) the more clearly do sellers communicate the VAT part of the price.
In fact, if you are not selling to consumers you can ditch that VAT altogether when you communicate your prices. Alternatively (when talking about online retailers) they may provide a toggle to switch between being a business customers or a private customer, e.g. here the toggle top left next to the Conrad logo: https://www.conrad.de
Here in Germany every bill, every receipt will contain that information. (I mean, obviously, it’s legally required.)
Different sellers do this differently in terms of clarity, though I think this has little to do with any kind of price signal to the buyer or sticking it to the government or something like that.
My feeling is that the more likely it is that the customer is a company (which do not have to pay VAT) the more clearly do sellers communicate the VAT part of the price.
In fact, if you are not selling to consumers you can ditch that VAT altogether when you communicate your prices. Alternatively (when talking about online retailers) they may provide a toggle to switch between being a business customers or a private customer, e.g. here the toggle top left next to the Conrad logo: https://www.conrad.de
As the average consumer, I would much rather see how much money I need to take out of my pocket on the sticker price rather than deeply considering what the tax burden of my jug of milk is.
We can have both. Sticker price can be all-inclusive price with taxes and fees required to be listed in detail on the receipt.
It can be itemized on the receipt but the easily readable advertised price should be the number you pay, period.
So have them put both prices with and without taxes on the label if they want to. The total tax burden will be listed on the receipt anyways.
Why? The business is built on infrastructure that is paid for with taxes.
Tax is included in all end user prices in every European country I’m aware of.
Tax is included in all end user prices in every European country I’m aware of.
No, the business is built on infrastructure that is paid for with a tiny fraction of taxes.
They are not congruent.
Taxes in Europe are also much higher in general. Perhaps this is a result of obscuring the amounts in the advertised prices—it never raises to the level of conscious consideration of the tax burden at point of purchase.
They are not congruent.
Taxes in Europe are also much higher in general. Perhaps this is a result of obscuring the amounts in the advertised prices—it never raises to the level of conscious consideration of the tax burden at point of purchase.
If the government runs a deficit- which it does- then the taxes are literally too low to cover the infrastructure so it can’t be “a fraction”.
Sure you can argue some of that goes to military (a safe nation is kinda infrastructure) and healthcare/Welfare (healthy and fed employees and customers are good for business too) but regardless your view on taxes, they all somehow end up back to helping the nation regardless of how efficiently or directly that happens.
Sure you can argue some of that goes to military (a safe nation is kinda infrastructure) and healthcare/Welfare (healthy and fed employees and customers are good for business too) but regardless your view on taxes, they all somehow end up back to helping the nation regardless of how efficiently or directly that happens.
Infrastructure is essentially a rounding error on most developed countries state expenditures. In many cases it's even self-sustaining due to licensing agreements with companies that managed the infrastructure in return for the toll revenue.
The idea that the primary purpose of taxes is to provide infrastructure hasn't been true ever.
The bulk of expenditures are social welfare programs and other similar handout and wealth transfer programs intended to punish the successful and reward the failures for political purposes.
Social security, healthcare, education often comprise over 50% of expenditures in most first world countries. Interest and debt are also another major expenditure.
The "core responsibilities of the state" , that is the military, justice system and internal security, infrastructure usually consume less than 20% of government expenditures.
The idea that the primary purpose of taxes is to provide infrastructure hasn't been true ever.
The bulk of expenditures are social welfare programs and other similar handout and wealth transfer programs intended to punish the successful and reward the failures for political purposes.
Social security, healthcare, education often comprise over 50% of expenditures in most first world countries. Interest and debt are also another major expenditure.
The "core responsibilities of the state" , that is the military, justice system and internal security, infrastructure usually consume less than 20% of government expenditures.
> The bulk of expenditures are social welfare programs and other similar handout and wealth transfer programs intended to punish the successful and reward the failures for political purposes
In America this is absolutely false in every sense.
It’s not the majority of the budget. They aren’t punishing success and they don’t “reward failure”. If you don’t want to succeed because a subset of your income will go helping those with bad luck then you’re welcome to be a failure.
> The "core responsibilities of the state" , that is the military, justice system and internal security, infrastructure usually consume less than 20% of government expenditures.
Hmm who said that was the core responsibility? I think you’re missing a bit in the list…
> We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
In America this is absolutely false in every sense.
It’s not the majority of the budget. They aren’t punishing success and they don’t “reward failure”. If you don’t want to succeed because a subset of your income will go helping those with bad luck then you’re welcome to be a failure.
> The "core responsibilities of the state" , that is the military, justice system and internal security, infrastructure usually consume less than 20% of government expenditures.
Hmm who said that was the core responsibility? I think you’re missing a bit in the list…
> We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
If you're going to lie you should do so on things that aren't easily checked and disproved. [0]
If the 6820 billion spent by the US government in 2021, 4394 billion were spent on income security, social security, health and medicare. That's almost 65% of government expenditures going directly to wealth transfer programs.
Mind you that doesn't account for all such programs (notably that value excludes education, housing, agricultural subsidies,etc...) So the real rate is actually higher.
The us is not unique in these ratios in the western world.
[0] https://preview.redd.it/us-government-revenue-spending-and-d...
If the 6820 billion spent by the US government in 2021, 4394 billion were spent on income security, social security, health and medicare. That's almost 65% of government expenditures going directly to wealth transfer programs.
Mind you that doesn't account for all such programs (notably that value excludes education, housing, agricultural subsidies,etc...) So the real rate is actually higher.
The us is not unique in these ratios in the western world.
[0] https://preview.redd.it/us-government-revenue-spending-and-d...
Personally I find it very interesting that a $20 restaurant meal might only be netting $1 to the owner. Makes me feel like going out isn’t actually that bad of a deal.
Lots of retail businesses have less than 5% profit margin. Even insurance companies, including health insurance, have less than 5% profit margins.
Well I do wonder about the exec compensation at insurance companies though. 5% profit but mega million compensation packages…
Why would insurance company executives have any more (or less) negotiating power than any other similar sized business?
Cursory look at insurance company executive pay does not show any anomalies.
Cursory look at insurance company executive pay does not show any anomalies.
Nb. health insurance profit margins are now capped, in the US.
At 15% to 20%. So smaller profit margins indicate downward pressure on pricing from competitors.
Well, in point of fact, the limit is actually a mandate on how much they must spend on medical care. Their own operating expenses, salaries, advertising, et c., have to come out after that. So they could theoretically make 15% under that limit—except in practice that's actually impossible. Which means margins aren't necessarily 5% because of competition.
[EDIT] That is, I'm skeptical that if one removed that limit, competition would keep margins where they are. Forcing all profit to come out of 15% of revenue probably does play a major role in keeping the actual margin as low as it is.
[EDIT] That is, I'm skeptical that if one removed that limit, competition would keep margins where they are. Forcing all profit to come out of 15% of revenue probably does play a major role in keeping the actual margin as low as it is.
It also encourages healthcare price increases, since the best way for them to increase profits becomes increasing revenues, rather than reducing costs
The fact that they settle for sub 5% profit margins means they individually do not have the pricing power to do that. Clearly, a competing insurance company will steal business via lower premiums.
I suppose one could assert they are all in cahoots and have a secret deal to accept low single digit profit margins to keep out of the news cycle, while simultaneously agreeing to pay healthcare providers more and more each year, but I would want proof.
I suppose one could assert they are all in cahoots and have a secret deal to accept low single digit profit margins to keep out of the news cycle, while simultaneously agreeing to pay healthcare providers more and more each year, but I would want proof.
A lot more of it goes to the landowner in the form of rent. It could be around 25-35%.
As a foreigner who lived in the USA for a few years, I always thought the US runs in hidden fees.
From tipping, to taxes not in the sale price, to insurances not being able to give a price for a procedure, to hotel fees… I could never actually guess how much anything would cost.
Either the wording of the law will have a ton of exclusions per industry.
From tipping, to taxes not in the sale price, to insurances not being able to give a price for a procedure, to hotel fees… I could never actually guess how much anything would cost.
Either the wording of the law will have a ton of exclusions per industry.
> to taxes not in the sale price
This gets complicated and there's good reason.
The taxes depend on where you take possession of the goods. If you purchase an item and walk up to the checkout counter, you pay the taxes there. On the other hand, if you are buying lumber in Kansas City, KS to be delivered in Kanas City, MO - you pay the MO taxes (4.225%) rather than the KS taxes (6.5%). So, putting the taxes on the lumber ($3.35) in KS would be $0.22 and if it was to be delivered on the other side of the state line, that would be $0.15.
If you were to say "ahh! Lets solve this by having taxes paid for where you buy it instead" then everyone incorporates in Delaware and you get some sizable data centers in Oregon and sell everything online from there... and you've got other problems with states trying to collect sales tax on goods delivered there.
This gets complicated and there's good reason.
The taxes depend on where you take possession of the goods. If you purchase an item and walk up to the checkout counter, you pay the taxes there. On the other hand, if you are buying lumber in Kansas City, KS to be delivered in Kanas City, MO - you pay the MO taxes (4.225%) rather than the KS taxes (6.5%). So, putting the taxes on the lumber ($3.35) in KS would be $0.22 and if it was to be delivered on the other side of the state line, that would be $0.15.
If you were to say "ahh! Lets solve this by having taxes paid for where you buy it instead" then everyone incorporates in Delaware and you get some sizable data centers in Oregon and sell everything online from there... and you've got other problems with states trying to collect sales tax on goods delivered there.
If you buy something in one state and drive it to another then you’re supposed to be taxes based on the destination when you “import” it.
If you sell to Missouri, you pay Missouri tax. It’s not actually complicated. I’m not sure what you’re trying to solve?
If you sell to Missouri, you pay Missouri tax. It’s not actually complicated. I’m not sure what you’re trying to solve?
That the easiest solution is to have "tax not included" on the price of the item. If you buy it in MO and import it to another state, that is tax added on to the overall price of the item that is "hidden". Trying to put that on the sticker price gets complicated.
I am not saying there's an easy solution but rather a "the easy solution misses every complicated case for which there are many."
I am not saying there's an easy solution but rather a "the easy solution misses every complicated case for which there are many."
This is not necessarily a bad thing. This incentivizes states and districts to compete on taxation and would likely drive sales tax down nationally.
As there are states that are 0%, this would mean "no sales tax at all" which would really hit states where they don't have any income tax and instead just have sales tax.
Under that approach, live in Texas and buy everything online from Oregon and you'll never pay any taxes.
States need to raise revenue somehow and playing that form of tax arbitrage shifts the burden of taxes to the people who don't have the resources to do that.
Under that approach, live in Texas and buy everything online from Oregon and you'll never pay any taxes.
States need to raise revenue somehow and playing that form of tax arbitrage shifts the burden of taxes to the people who don't have the resources to do that.
No; in fact sales tax is what’s shifting the burden in that direction. Income tax on the other hand is a progressive tax that keeps impact more proportional.
If you have the resources to declare residency in Texas and pay sales taxes from Oregon you are able to avoid paying most taxes.
I am saying that most people don't have the resources to play tax arbitrage. Those that do are the ones that should likely be paying the most taxes.
Going to a system were sales taxes go to 0 based on where you buy it (online in Oregon) doesn't mean that states will abandon the sales tax but rather that the tax burden that local governments can collect (sales, property) will go up and disproportionately impact the people who can least afford it.
As it is, that approach would be overturning South Dakota vs Wayfair https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc. --- https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf
Sales tax is regressive and a worse option for taxation. It is, however, one of the few options that local governments have for raising funds.
The tax system needs an overhaul (though frankly my confidence in congress not just doing another tax cut for the rich is low). Disrupting sales tax without a corresponding overhaul would likely make things much worse in many of the poorer areas of the nation and those where much of the economy is based on non-residents visiting.
I am saying that most people don't have the resources to play tax arbitrage. Those that do are the ones that should likely be paying the most taxes.
Going to a system were sales taxes go to 0 based on where you buy it (online in Oregon) doesn't mean that states will abandon the sales tax but rather that the tax burden that local governments can collect (sales, property) will go up and disproportionately impact the people who can least afford it.
As it is, that approach would be overturning South Dakota vs Wayfair https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc. --- https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf
Sales tax is regressive and a worse option for taxation. It is, however, one of the few options that local governments have for raising funds.
The tax system needs an overhaul (though frankly my confidence in congress not just doing another tax cut for the rich is low). Disrupting sales tax without a corresponding overhaul would likely make things much worse in many of the poorer areas of the nation and those where much of the economy is based on non-residents visiting.
Interesting point; yeah, I agree that a significant population does not have the ability to move around. If I understand you correctly, you’re saying that in a world where all sales tax is zero, the wealthier population will be able to arbitrage/optimize over the remaining tax types they pay more easily than those less wealthy, resulting in a larger wealth gap. This argument could also apply inductively in a sense over those remaining types as well, since the optimization problem gets easier as we have fewer dimensions of tax types to worry about. What I’m thinking then is the improvement here isn’t to remove taxes entirely but to remove flat taxes like sales tax and replace them with more/varying progressive taxes that make arbitrage difficult?
I hope I’m not coming off as rude—really appreciate the discussion thus far!
I hope I’m not coming off as rude—really appreciate the discussion thus far!
Yep - we're on the same page now.
Also consider things like Nevada which has no income tax and one of the higher combined sales tax because they are able to extract money from out of state people as tourists there.
California also shows up in the "rather high combined sales tax" in part because local governments arne't able to reliably use property tax (yes, its another regressive tax - and California is a special case there) to raise local funds. ( https://www.lao.ca.gov/reports/2015/finance/sales-tax/unders... ).
There are some progressiveish aspects to sales tax as it selects which items are taxable. In Minnesota (for example), clothing is not taxed. On the other hand, from Wisconsin, its sometimes cheaper to shop online and have Ikea delivered rather than go to Chicago and pay local taxes there ( https://upload.wikimedia.org/wikipedia/commons/a/ae/State_Sa... )
In many cases, sales taxes try to tax the more "luxury" items though it gets complicated (food eaten in the place of purchase gets taxed while food that is not hot and to be consumed elsewhere is not taxed).
This comes from experience working in the tax part of point of sales software a few years ago. The "it gets complicated" gets really complicated... and even worse when you then start looking at it from the fiscal policy side for local governments.
Also consider things like Nevada which has no income tax and one of the higher combined sales tax because they are able to extract money from out of state people as tourists there.
California also shows up in the "rather high combined sales tax" in part because local governments arne't able to reliably use property tax (yes, its another regressive tax - and California is a special case there) to raise local funds. ( https://www.lao.ca.gov/reports/2015/finance/sales-tax/unders... ).
There are some progressiveish aspects to sales tax as it selects which items are taxable. In Minnesota (for example), clothing is not taxed. On the other hand, from Wisconsin, its sometimes cheaper to shop online and have Ikea delivered rather than go to Chicago and pay local taxes there ( https://upload.wikimedia.org/wikipedia/commons/a/ae/State_Sa... )
In many cases, sales taxes try to tax the more "luxury" items though it gets complicated (food eaten in the place of purchase gets taxed while food that is not hot and to be consumed elsewhere is not taxed).
This comes from experience working in the tax part of point of sales software a few years ago. The "it gets complicated" gets really complicated... and even worse when you then start looking at it from the fiscal policy side for local governments.
> if you are buying lumber in Kansas City, KS to be delivered in Kanas City, MO - you pay the MO taxes (4.225%) rather than the KS taxes (6.5%)
It gets even better. In some places (e.g. Washington) you pay use tax[0][1] if the use tax would be higher than the sales tax you did pay. So if for example you buy something in Oregon and bring it home to Washington, you pay all of the use tax. If you bought something in a state with a sales tax that is lower than the Washington use tax, you pay the difference. (It isn't immediately clear if you can try to recoup the difference if you buy something in a higher sales tax location than your local use tax rate).
[0] It's the same as your sales tax rate.
[1] https://dor.wa.gov/taxes-rates/use-tax
It gets even better. In some places (e.g. Washington) you pay use tax[0][1] if the use tax would be higher than the sales tax you did pay. So if for example you buy something in Oregon and bring it home to Washington, you pay all of the use tax. If you bought something in a state with a sales tax that is lower than the Washington use tax, you pay the difference. (It isn't immediately clear if you can try to recoup the difference if you buy something in a higher sales tax location than your local use tax rate).
[0] It's the same as your sales tax rate.
[1] https://dor.wa.gov/taxes-rates/use-tax
That was the case before and is still the case, just most of the time they ignore it. It is really looked at when a state borders another one with no sales tax.
Some time back that was also the case with online sales. That you paid the tax of the state where you bought if it if that state had a tax nexus there - otherwise you didn't pay sales tax and were expected to self report the use tax.
Except no one did. So sales tax was required to be collected by online sellers always.
https://www.cnbc.com/2018/06/21/heres-what-that-supreme-cour...
As to the use tax - when I bought clothes at Mall of America in MN (2010ish) and lived in northern Wisconsin I'd remember to add that to the tax reporting.
Some time back that was also the case with online sales. That you paid the tax of the state where you bought if it if that state had a tax nexus there - otherwise you didn't pay sales tax and were expected to self report the use tax.
Except no one did. So sales tax was required to be collected by online sellers always.
https://www.cnbc.com/2018/06/21/heres-what-that-supreme-cour...
As to the use tax - when I bought clothes at Mall of America in MN (2010ish) and lived in northern Wisconsin I'd remember to add that to the tax reporting.
Well, you're supposed to. I expect very few consumers pay the use tax except in situations like purchasing a car where they can't hide it.
This is a good example, but it should be a problem of whoever finds themselves in that situation and not the rest of us. I’m eating a sandwich in Des Moins, Iowa and there’s no reason I should do a mental math of $6.99 + 10% tax + 22% tip. Why not just print the final price? Or at least offer two versions of the menu: for nerds and for the rest of us.
Another annoying thing about the USA is the willingness to complicate everyones life based on a caveat only affecting a few.
Most people are only employed by one job, take the standard deduction, and have no other tax complications. But they are forced to file a tax return because they *might* have something to declare the IRS doesn't already know about.
Removing the sales tax from milk I am buying at a supermarket because a person might purchase lumber is insane, ..., right?
Most people are only employed by one job, take the standard deduction, and have no other tax complications. But they are forced to file a tax return because they *might* have something to declare the IRS doesn't already know about.
Removing the sales tax from milk I am buying at a supermarket because a person might purchase lumber is insane, ..., right?
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> tipping
This has gotten ridiculous past 2-3 year. Buy a $3.00 coffee , $1 tip is expected. I hate those ipad type payment consoles.
This has gotten ridiculous past 2-3 year. Buy a $3.00 coffee , $1 tip is expected. I hate those ipad type payment consoles.
The night after my first haircut in the US I was like “oh shit” and I googled “do you tip for a haircut” and realized I fucked up. The results were anywhere from 10%-50% tip.
The next haircut I got I asked “what is a good tip” and the hair cutter would not tell me. I guessed 20% and went about my day. Then someone told me “that was too low”.
I ended up cutting my own hair, or waiting until I was in another sane country.
The next haircut I got I asked “what is a good tip” and the hair cutter would not tell me. I guessed 20% and went about my day. Then someone told me “that was too low”.
I ended up cutting my own hair, or waiting until I was in another sane country.
I always tip $10 which is around 50%. But I’m only going every 2 months so it doesn’t matter much and I’d rather not risk the disfavour of someone with sharp tools near my face.
20% is fine for a haircut. It's perfectly acceptable.
No it's not. Hair stylists should set there prices accordingly in a way that they make a livable wage.
Some places hairstylists are more like contractors who actually pay to get a seat to cut peoples hair in. So tipping is a larger portion of their income.
If they are employees they can negotiate a living wage. They all should band together and ask more if it is not livable.
In fact, we all should stop to frequent places that exploit employees by not paying them a livable wage. And if the solution to this means an increase in price, so be it.
The defense of 'they might be contractors', which rent a seat for a fixed price or on a % revenue sharing with the salon is even more ridiculous.
They are contractors, so they have all the means to set their own price.
In fact, we all should stop to frequent places that exploit employees by not paying them a livable wage. And if the solution to this means an increase in price, so be it.
The defense of 'they might be contractors', which rent a seat for a fixed price or on a % revenue sharing with the salon is even more ridiculous.
They are contractors, so they have all the means to set their own price.
20% was fine when haircuts were a lot cheaper.
My barber and most in the area have increased their prices significantly. 20% at $20 isn't bad. When my haircut is now pushing 35-40 range it becomes harder to stomach.
My barber and most in the area have increased their prices significantly. 20% at $20 isn't bad. When my haircut is now pushing 35-40 range it becomes harder to stomach.
Hmmm I guess a lot changed since my last vacation to the US 10 years ago.
I remember all the travel advisories said something about 10 to 15 percent.
I remember all the travel advisories said something about 10 to 15 percent.
Not only that, but now everyone wants tips for things which never expected it before. Food cart? Tip. Fast food drive-thru? Tip.
Heck, my barber now charges $25 for a haircut (which takes all of 15 minutes) and we're expected to tip for that too.
Then there are tips that I apparently don't really know about but if I don't, I'm the jerk. I never knew I was supposed to tip the natural gas guy when he comes by to do some service (which is 'free', this is service from the actual gas company on the meter). My neighbor tips the garbage truck driver.
If someone put an initiative on the ballot that explicitly banned tipping, I'd vote for it.
Heck, my barber now charges $25 for a haircut (which takes all of 15 minutes) and we're expected to tip for that too.
Then there are tips that I apparently don't really know about but if I don't, I'm the jerk. I never knew I was supposed to tip the natural gas guy when he comes by to do some service (which is 'free', this is service from the actual gas company on the meter). My neighbor tips the garbage truck driver.
If someone put an initiative on the ballot that explicitly banned tipping, I'd vote for it.
> Heck, my barber now charges $25 for a haircut (which takes all of 15 minutes) and we're expected to tip for that too.
It's been customary to tip barbers since forever, hasn't it? When I was just 8, my father gave me money to tip the barber. I think the principle is, you tip so that the server remembers you. With haircuts, that can make a difference.
My hair is now so thin and wispy that no barber can make it look OK. I cut it very short myself, with electric clippers. I haven't been to a barbers in 8 years.
It's been customary to tip barbers since forever, hasn't it? When I was just 8, my father gave me money to tip the barber. I think the principle is, you tip so that the server remembers you. With haircuts, that can make a difference.
My hair is now so thin and wispy that no barber can make it look OK. I cut it very short myself, with electric clippers. I haven't been to a barbers in 8 years.
The way barber shops/salons work is the barber typically rents a chair from the business, some proportion of the fee you pay goes to the house and it is expected that the barber will earn some proportion of their money via tips. They also provide their own tools and products. Tipping barbers goes back at least to the 80's if not longer.
It doesn't matter if that's how a barber typically works. Your average consumer doesn't and shouldn't have to understand how every business they frequent works behind the scenes. I shouldn't need a degree in economics just to get a freakin' hair cut.
It's really only wait staff, bellhops, valets, catering for private events, hotel maids and barbers that need a tip historically.
Yeah I guess I should be more specific. It's not really a barber, I think it's more 'hair stylist' I guess? Just a place that does all kinds of haircuts. No barber pole on the front or anything like that. Rarely get the same stylist twice, and they just pull up my cutting preferences from their computer when I check in.
> My hair is now so thin and wispy that no barber can make it look OK. I cut it very short myself, with electric clippers. I haven't been to a barbers in 8 years.
Ha! I'm getting there fast. I can still get it cut so it doesn't look terrible, but it quickly grows out and starts to look patchy, and worse, like I'm trying to have some kind of hangover. I'm this ---><--- close to just taking the clippers to it myself and calling it good.
> My hair is now so thin and wispy that no barber can make it look OK. I cut it very short myself, with electric clippers. I haven't been to a barbers in 8 years.
Ha! I'm getting there fast. I can still get it cut so it doesn't look terrible, but it quickly grows out and starts to look patchy, and worse, like I'm trying to have some kind of hangover. I'm this ---><--- close to just taking the clippers to it myself and calling it good.
> Heck, my barber now charges $25 for a haircut (which takes all of 15 minutes) and we're expected to tip for that too.
I think this comment perfectly encapsulates why tipping has exploded and why it's never going away. People say they hate tips, but they complain vehemently when the base price of those goods rises to a decent wage.
In most urban areas I'd posit the reason for the explosion of tipping is because of the growing wealth inequality and explosion in housing costs. I'd bet that your barber is having a hell of a harder time making ends meet than, say, your average software developer compared to 10 years ago.
I think this comment perfectly encapsulates why tipping has exploded and why it's never going away. People say they hate tips, but they complain vehemently when the base price of those goods rises to a decent wage.
In most urban areas I'd posit the reason for the explosion of tipping is because of the growing wealth inequality and explosion in housing costs. I'd bet that your barber is having a hell of a harder time making ends meet than, say, your average software developer compared to 10 years ago.
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> I think this comment perfectly encapsulates why tipping has exploded and why it's never going away. People say they hate tips, but they complain vehemently when the base price of those goods rises to a decent wage.
I'm not complaining about the price of the haircut, per se. I guess I could have phrased it better. What's getting me is that they're raising the price steadily, every few months it seems. That's cool, inflation is real, they have to make a living, I get it. But if they're doing a good job ratcheting up prices to keep up with inflation, why do I need to worry about tipping them so they can make ends meet?
Yes, they're not up to software developer levels. But they do get carpal tunnel, so there's that. And they require a bit of training and licensing before they can work. But at $100/hr, lets assume the stylist is getting 50% of that. They're not poor, they're more than 3x our local minimum wage.
Even then, it would bother me that my tipping was required for them to make ends meet. I'd much rather pay a fair price and not feel guilty based on how much I tip, wondering if it's enough, etc.
I'm not complaining about the price of the haircut, per se. I guess I could have phrased it better. What's getting me is that they're raising the price steadily, every few months it seems. That's cool, inflation is real, they have to make a living, I get it. But if they're doing a good job ratcheting up prices to keep up with inflation, why do I need to worry about tipping them so they can make ends meet?
Yes, they're not up to software developer levels. But they do get carpal tunnel, so there's that. And they require a bit of training and licensing before they can work. But at $100/hr, lets assume the stylist is getting 50% of that. They're not poor, they're more than 3x our local minimum wage.
Even then, it would bother me that my tipping was required for them to make ends meet. I'd much rather pay a fair price and not feel guilty based on how much I tip, wondering if it's enough, etc.
I have started inputting a custom amount. Recently, I've noticed some places keeping the machine out of my hands and flat out asking, "what should I do here?"
It's way over the top aggressive now.
It's way over the top aggressive now.
Meta: I missed my edit window, and apologize for the reply on my own post here.
Soon, I will just start asking them to input something that takes work: "Please input $0.57, thank you SO MUCH!"[0]
I expect the "custom amount" button to go away, at which point I will say something about making sure the average amount is about what I wanted to pay, and that means skipping some tips, and paying others, and oh by the way can you make a note of that. Is your manager here... Sorry about that, but getting this stuff right is really important...
This is all a really craptastic game I would rather not play.[1]
[0] I expect someone to get it wrong, or try and skate out on that little bit of work. Hoo boy! "Nope, let's make sure it is right please. Yeah, go back, hit custom, and yes $0.57 please. Yeah, you got it! Thank you!"
[1] Like the check your bags Nazi they forced some poor soul to be. What I ended up doing was to get a gift receipt.
Then, as I am walking right out with the stuff they have my money for, I hand it to them, "Here, please hold on to this for me, thanks!"
Soon, I will just start asking them to input something that takes work: "Please input $0.57, thank you SO MUCH!"[0]
I expect the "custom amount" button to go away, at which point I will say something about making sure the average amount is about what I wanted to pay, and that means skipping some tips, and paying others, and oh by the way can you make a note of that. Is your manager here... Sorry about that, but getting this stuff right is really important...
This is all a really craptastic game I would rather not play.[1]
[0] I expect someone to get it wrong, or try and skate out on that little bit of work. Hoo boy! "Nope, let's make sure it is right please. Yeah, go back, hit custom, and yes $0.57 please. Yeah, you got it! Thank you!"
[1] Like the check your bags Nazi they forced some poor soul to be. What I ended up doing was to get a gift receipt.
Then, as I am walking right out with the stuff they have my money for, I hand it to them, "Here, please hold on to this for me, thanks!"
Just because the option is there on the tablet doesn't mean it's expected. Counter serve food/takeout and basic coffee will 95% of the time not get a tip from me.
> Just because the option is there on the tablet doesn't mean it's expected.
Yes i am too much of wuss to not tip when the person behind the counter is staring right at me making that choice.
Yes i am too much of wuss to not tip when the person behind the counter is staring right at me making that choice.
>Buy a $3.00 coffee , $1 tip is expected.
Is this a fancy coffee shop thing? I admittedly don't go to cafes often, but my impression was that it's a "tipping optional" type of place (as opposed to something like full service restaurants which are tipping defacto mandatory).
Is this a fancy coffee shop thing? I admittedly don't go to cafes often, but my impression was that it's a "tipping optional" type of place (as opposed to something like full service restaurants which are tipping defacto mandatory).
It's a side-effect (uh, or, deliberate feature) of modern POS systems. Defaulting to having a tip line on receipts for e.g. a carry-out meal from a restaurant, which people never used to tip for, or showing a tip option on an iPad in a situation that never, ever called for tipping before and the worker is standing right there watching you fill tap or fill out the receipt so you feel like maybe you're being a dick (what's the norm now? Are you one of those assholes abusing sub-minimum-wage tip workers if you don't tip? Who knows!) if you don't.
Tipping was just not even considered in these transactions, before.
[EDIT] Oh, and percentage-tip defaults for situations where the norm before was maybe you toss your extra change or a $1 bill in the tip jar, and it was pretty normal not to tip at all most of the time. "18%, 20%, 25%, Custom, Skip".
Tipping was just not even considered in these transactions, before.
[EDIT] Oh, and percentage-tip defaults for situations where the norm before was maybe you toss your extra change or a $1 bill in the tip jar, and it was pretty normal not to tip at all most of the time. "18%, 20%, 25%, Custom, Skip".
And if the POS systems made you feel like a bit of a cheapskate before, they sure made you feel like one in 2020/2021 comfortably working at home while young service workers were pouring coffee or flipping burgers.
"Either the wording of the law will have a ton of exclusions per industry."
Even if it does it's better than no law.
Even if it does it's better than no law.
A complicated law only helps big business that has the resources to follow it.
Look no further than the shit show of the 11 chapter 99 section GDPR.
Look no further than the shit show of the 11 chapter 99 section GDPR.
Businesses already have the total price for the checkout they can easily display it earlier.
This over-regulation will interfere with the God-given right of companies to screw over the suckers. Next they'll be coming after payday loans for usury.
I know this is sarcastic and if you didn't post it first I would have.
The inconsistencies some people have when complaining about regulation, California, and Democrats is just irritating
The inconsistencies some people have when complaining about regulation, California, and Democrats is just irritating
Regulation isn't a singular thing. People want more good regulations and less bad regulations. Even when good regulations exist, people want competent enforcement of the regulations.
California passes a lot regulations, so there is a lot of red meat for either side of the regulations good/bad arguments.
California passes a lot regulations, so there is a lot of red meat for either side of the regulations good/bad arguments.
Republicans say they don't want more legislation, not "bad" legislation.
Also good and bad are subjective
Also good and bad are subjective
You can't think of a single thing that Republicans want to legislate?
Of course good and bad are subjective. That is the whole point, the concept of regulations can't be generally put into a good or bad basket. No one is advocating for absolutely no regulations. You are arguing against a straw man that you made up.
Of course good and bad are subjective. That is the whole point, the concept of regulations can't be generally put into a good or bad basket. No one is advocating for absolutely no regulations. You are arguing against a straw man that you made up.
How is it a strawman? Republicans constantly talk about their dislike for excess regulation and big government. You need quotes, seriously?
Since every politician and person wants good legislation and not bad legislation there's no difference between republicans and democrats. Given that why have Republicans made is a core part of their party. It's like saying "I want what's best for America".
Since every politician and person wants good legislation and not bad legislation there's no difference between republicans and democrats. Given that why have Republicans made is a core part of their party. It's like saying "I want what's best for America".
Florida begs to differ
>>> The legislation — the first bill of its type across the state — would prohibit advertising a price for a good or service that does not include all required charges other than taxes and fees imposed by a government.
>>> “Californians are sick and tired of dishonest fees being tacked on to seemingly everything,” said state Senator Bill Dodd. “It’s an underhanded trick...
Why do government-imposed fees get a special exemption these "dishonest" and "underhanded" tricks? :thinking:
;)
Note: In Europe, the advertised price always includes the related taxes: https://www.quora.com/Do-prices-in-Europe-include-taxes
>>> “Californians are sick and tired of dishonest fees being tacked on to seemingly everything,” said state Senator Bill Dodd. “It’s an underhanded trick...
Why do government-imposed fees get a special exemption these "dishonest" and "underhanded" tricks? :thinking:
;)
Note: In Europe, the advertised price always includes the related taxes: https://www.quora.com/Do-prices-in-Europe-include-taxes
> Note: In Europe, the advertised price always includes the related taxes
How does that work for prices in broadcast ads that reach multiple countries? VAT can vary from country to country so which country's VAT rate do you use in the ad?
How does that work for prices in broadcast ads that reach multiple countries? VAT can vary from country to country so which country's VAT rate do you use in the ad?
There really isn't a lot of multi-country advertising in Europe. You're going to run into bigger problems than showing correct VAT rates - language being probably the most obvious one, but also different regulatory requirements for things like mandatory warnings, watershed rules, etc.
In practice, advertising is always going to need to be adapted for every European market.
In practice, advertising is always going to need to be adapted for every European market.
Because they vary based on the municipality you live in.
Government taxes are at least fairly consistent so it doesn’t matter for comparison shopping.
Every business has started doing this and I'm glad there is finally some consumer protection happening.. It's worse than the bronze/gold/platinum 'memberships' or 'package' schemes that have shown up everywhere. My dog's boarding place hit me with three fees on pickup (they also have like 200 permutations of packages that try monetize every possible marginal activity - taking pictures with your dog, letting them hang out with staff 'up front', allegedly watching movies with them, each individual toy or treat, etc).
It's sad that we have to look to government to solve basic stuff like this. I'd rather not regulate everything to death but the alternative is annoying shit like this. Like I could try to go to another dog boarding place, but there just aren't that many of them and they probably do the same thing. I bet they're all owned by the same private equity firm anyway.
It's sad that we have to look to government to solve basic stuff like this. I'd rather not regulate everything to death but the alternative is annoying shit like this. Like I could try to go to another dog boarding place, but there just aren't that many of them and they probably do the same thing. I bet they're all owned by the same private equity firm anyway.
While different, it irks me that there are a bunch of hidden fees with UberEats and DoorDash. Not only do delivery companies charge the consumer fees, but restaurants generally raise their prices by 50% if you are buying through an app. That delta is not shown anywhere.
Include Instacart in that group that charges more than the price on the shelf at the store, then adds on service and delivery fees on top of that.
And then they get half the items wrong anyway
> The legislation — the first bill of its type across the state — would prohibit advertising a price for a good or service that does not include all required charges other than taxes and fees imposed by a government.
I don't get it, so it's OK for government to hide its fees but not the business?
I wish the government were to lead by example and also try to eliminate hidden government fees. Here in California, different cities can have different sales tax, and knowing the final price can seem like a guessing game.
I would love if taxes, tips, and other business fees were all included in a final price that were stated upfront.
I don't get it, so it's OK for government to hide its fees but not the business?
I wish the government were to lead by example and also try to eliminate hidden government fees. Here in California, different cities can have different sales tax, and knowing the final price can seem like a guessing game.
I would love if taxes, tips, and other business fees were all included in a final price that were stated upfront.
> I don't get it, so it's OK for government to hide its fees but not the business?
Other way round; the bill would make it mandatory to include all fees except the government's fees.
Other way round; the bill would make it mandatory to include all fees except the government's fees.
Yeah, I think they'd have a stronger argument if they mandated all fees to be included, including government fees.
I hope this applies to "resort fees" that hotels charge and the dozens of types of service fees that restaurants invent (one around here had an ACA surcharge for political reasons).
I almost booked a Turo for an extended period of time, peer to peer rental cars, it gave me a 40% discount for that time length, but all of that discount was erased by fees and it was more expensive than the previous page said it would be.
Curb stomp them please, thanks.
Curb stomp them please, thanks.
> Curb stomp them please, thanks.
I'm not sure I've ever seen such a casual use of such violent imagery. I did not care for it.
I'm not sure I've ever seen such a casual use of such violent imagery. I did not care for it.
Interesting that fees imposed by the government are specifically exempted in this bill.
When the state has a monopoly on something, does it really matter? It's not like you can go to the competition to renew your driver's license...
This is welcome news.
An egregious example of what they are (hopefully) aiming to stop: https://passingtime.substack.com/p/perfidious-pricing
Also, a 2021 story from the Times about how drip pricing is getting out of control: https://www.nytimes.com/2021/08/02/opinion/consumers-drip-pr...
An egregious example of what they are (hopefully) aiming to stop: https://passingtime.substack.com/p/perfidious-pricing
Also, a 2021 story from the Times about how drip pricing is getting out of control: https://www.nytimes.com/2021/08/02/opinion/consumers-drip-pr...
I have always been disgusted by the AirBnB practice where they charge YOU a service fee and take out a % of the nightly fee the owner charges.
Like who are they working for? Me? Or the b&b owner?
Like who are they working for? Me? Or the b&b owner?
Not to mention the cleaning fee that's only disclosed when you make it to the purchase page, with the additional "House Rules" that you are required to take out the trash, strip the beds, and run the dishwasher before you leave.
All the while, you don't get daily cleaning like you would in a hotel.
It's pretty bad, and I'm gradually moving back to hotels, which are a known quantity.
All the while, you don't get daily cleaning like you would in a hotel.
It's pretty bad, and I'm gradually moving back to hotels, which are a known quantity.
Does this mean hospitals will have to tell you what they charge upfront?
Income tax also feels like a hidden fee since it's automatically deducted from your paycheck and is out of sight/out of mind for most people, despite it taking anywhere from a quarter to a third of your income. If people had to pay a monthly tax bill every month, I think they'd think very differently about their level of taxes. Note: I'm not actually advocating that, I think it sounds awful. But the hidden-fee experience feels very similar
I don’t know where you’ve worked but you can choose to not let your employer deduct anything. Normally it’s done automatically to ensure that you don’t get it with an unaffordable tax bill at the end of the year.
In the US, employers are legally required to withhold. You can only ask them not to if: "the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year."
I don't use things like Uber Eats very much.. but I did last week. It would literally NOT SHOW ME the all in price before I had to click order. It only showed me what the restaurant was charging me. I think earlier in the process it did show the delivery fees of some sort, to be fair.
But at the very final point they hide it from you, which is absolutely insane it's even legal.
But at the very final point they hide it from you, which is absolutely insane it's even legal.
> The legislation — the first bill of its type across the state — would prohibit advertising a price for a good or service that does not include all required charges other than taxes and fees imposed by a government.
I wish it included the taxes and government fees also. The whole hidden fee culture seems to be enabled by us all being so accustomed to paying extra at checkout.
I wish it included the taxes and government fees also. The whole hidden fee culture seems to be enabled by us all being so accustomed to paying extra at checkout.
The only purpose of a “resort fee” is to deceive. Customers are more likely to book if a lower rate is advertised. Taxing authorities lose revenue because hotel rooms are taxed at a much higher rate than “fees”. Travel agents are shorted their full commissions because they are based on the room rate.
The resort fee scam has spread to other areas. Where do you think Ticketmaster and airlines got the idea to deconstruct their pricing schemes? How about restaurants now adding fees in the fine print for everything from mandated health care to “area marketing plans” to higher cfedit card charges…instead of simply adjusting prices on the menu?
This consumer fraud has been ongoing since at least 1994 in Hawaii and 2010 elsewhere it escaped its “Maui Quarantine”. It is long past time that honesty in pricing be recognized and an enforced as a basic consumer protection.
The resort fee scam has spread to other areas. Where do you think Ticketmaster and airlines got the idea to deconstruct their pricing schemes? How about restaurants now adding fees in the fine print for everything from mandated health care to “area marketing plans” to higher cfedit card charges…instead of simply adjusting prices on the menu?
This consumer fraud has been ongoing since at least 1994 in Hawaii and 2010 elsewhere it escaped its “Maui Quarantine”. It is long past time that honesty in pricing be recognized and an enforced as a basic consumer protection.
I wish this bill was "ban ALL FEES" period. Classifying something as "junk" or "hidden" sounds like a nightmare that plenty of businesses and industries will find way around. Get back to bottom line pricing, taxes included, and watch competition rise while prices fall
Does this law include taxes like Social Security?
Many people think they only pay 7.5% and the company pays the other 7.5% but this is wrong. The employee pays the whole 15%, they just don't see it come out of their check.
Does that count as a "hidden fee?" What about VAT taxes?
Many people think they only pay 7.5% and the company pays the other 7.5% but this is wrong. The employee pays the whole 15%, they just don't see it come out of their check.
Does that count as a "hidden fee?" What about VAT taxes?
You could argue the same about corporate income taxes but everyone here seems to love those
I find it very hard to believe that in the long run companies actually profit from having such a confrontational relationship with their customers. Like is getting an extra five dollars a month from me really worth me hating you?
Companies know that the number of people who would boycott them for a small fee is extraordinarily small. Most people take their medicine and move on with their lives, since its not like you have an alternative for most of these goods and services in life, or the alternative operates the exact same way. If it didn't work well these practices wouldn't be so widespread.
The problem is that shareholders and "activist investors" aren't exactly thinking about the long term. It's in their best interests to covert a company's goodwill into hard cash, do a series of share buybacks with the money, and then get out of the position.
A lot of it too is just lemmings being lemmings. There are no shareholder activist investors involved when your local brewpub tacks on a 25% service fee. That's just them doing what their other asshole small business owner friends have been doing and not a farsighted play or anything. I know they are assholes because I've overheard conversations of these types many times, especially during the pandemic complaining how none of their staff wants to return to work for the wages they are offering. For a lot of business owners, they end up looking at the numbers alone, weighing what they mean for their immediate cash flow much more than how those numbers impact their employees or even overall customer relations.
[deleted]
As others have said, I hope this applies to "resort fees" What makes it worse is many hotels having this hidden charge in parallel advertise a "complimentary" breakfast.
I love how this January, my ISP added one new fee and increased the price of an existing fee and the rental cost of my modem (which was bought by a previous ISP to begin with, it's pure profit until it breaks), and those three random fee increases magically total to increasing my bill by exactly ten dollars.
While it was framed as three little fee changes, it's obvious there was a directive to up the bill by $10 a month, and then they just found lines to bump without touching the actual main one.
While it was framed as three little fee changes, it's obvious there was a directive to up the bill by $10 a month, and then they just found lines to bump without touching the actual main one.
> other than taxes and fees imposed by a government
IMO, taxes need to be part of the advertised price.
Part of the reason we tolerate hidden fees in the US is because we're used to paying more than the sticker price for something because it doesn't include taxes (and tip.)
If I lived in CA, I'd contact my reps and ask them to redo the bill to also include taxes and tips. It's not right to eliminate some kinds of hidden fees while still keeping government hidden fees.
IMO, taxes need to be part of the advertised price.
Part of the reason we tolerate hidden fees in the US is because we're used to paying more than the sticker price for something because it doesn't include taxes (and tip.)
If I lived in CA, I'd contact my reps and ask them to redo the bill to also include taxes and tips. It's not right to eliminate some kinds of hidden fees while still keeping government hidden fees.
I agree but worry that could derail this good legislation.
Guess all of us outside of CA are going make up the difference via higher hidden fees. :(
I started writing this comment as a joke, but I no longer am sure that it is.
I started writing this comment as a joke, but I no longer am sure that it is.
> other than taxes and fees imposed by a government.
Why that exclusion? Why not require the price on the label to be the price you pay?
Why that exclusion? Why not require the price on the label to be the price you pay?
This makes sense for location specific services. If you are trying to compare two hotel rooms, by so means, they should be forced to include all the taxes they require since that doesn't involve your location and is important when comparing prices.
But should not be a requirement for products where I would need to pay my local tax as that would require me to enter my location and would not provide any interesting extra information between products.
But should not be a requirement for products where I would need to pay my local tax as that would require me to enter my location and would not provide any interesting extra information between products.
I hope this applies to like Airbnb, Ticketmaster and so on who disclose late service fees.
Can we also mandate any included taxes in the listed price, like elsewhere in the world?
kthxbai
kthxbai
I'm sure every Californian, appropriately for this time of year, are taking a look at that state income tax return looming thinking "God what an amazing use of my tax dollars.. "
The hotel industry has the most egregious fees in my opinion.
You pay online, then you show up and they demand $90 for cleaning and other fees. I hope this goes through and moves us towards a sane direction.
You pay online, then you show up and they demand $90 for cleaning and other fees. I hope this goes through and moves us towards a sane direction.
[deleted]
I can’t wait to see the unintended effects of this bill on healthcare. If we’re lucky, this bill might actually accomplish something!
Are hidden fees like the fuel taxes that get bundled into the stated price, or like sales taxes that are calculated at purchase time?
No.
Hidden fees are for items that are broken out from the sales price and they aren’t optional. A good example used earlier in this thread is hotel resort fees. Even if you don’t use any of the amenities that the charge is for, you are still charged that fee and it isn’t part of the advertised price.
Hidden fees are for items that are broken out from the sales price and they aren’t optional. A good example used earlier in this thread is hotel resort fees. Even if you don’t use any of the amenities that the charge is for, you are still charged that fee and it isn’t part of the advertised price.
It is unfortunate that there is no group that sits down and harmonizes all these laws across state lines. Why should it be that the way to do business is slightly different in CA vs NC? If this remains the situation, then the only companies which thrive will be the ones with an army of lawyers. There is not much hope for smaller businesses in such an environment
I wish they would treat sales tax as a hidden fee. Just show the actual damn price up front plzkthx.
If we had a standard sales tax, sure. But when sales taxes vary by city and county, like they do in California, it's very painful to do that -- and that's only 1 of the 50 states!
> it's very painful to do that
Sure it's hard. Do I care? Not in even the slightest. I have not one picogram of care.
The calculation is made at the point of sale. They can list a final price and work backwards. Does that make it harder for a business to set the price? Yeah maybe. I still don't care.
It's a clearly solvable problem. It'd provide a superior consumer experience. It'd be slightly inconvenient for businesses. SHIP IT.
Sure it's hard. Do I care? Not in even the slightest. I have not one picogram of care.
The calculation is made at the point of sale. They can list a final price and work backwards. Does that make it harder for a business to set the price? Yeah maybe. I still don't care.
It's a clearly solvable problem. It'd provide a superior consumer experience. It'd be slightly inconvenient for businesses. SHIP IT.
> like they do in California, it's very painful to do that -- and that's only 1 of the 50 states
Not all 50 states have a tax system as absurd as California's, where it matters down to the exact part of the street you're standing on when buying something.
Other states are the example CA should follow, not the other way around.
Not all 50 states have a tax system as absurd as California's, where it matters down to the exact part of the street you're standing on when buying something.
Other states are the example CA should follow, not the other way around.
It's also very painful for me to have to guess the final price with all these different sales taxes. I think maybe if it had to be included in the final price, then the cities and counties might standardize a bit more.
They're still having to make that calculation at the register. There's no reason they can't calculate it when making price tags.
Sales Tax probably should be done-away with.
In California, you are taxed when you earn a dollar, and taxed when you spend that same dollar.
If you look at your bank account and it's balance is $100, you do not actually have $100 in purchasing power, but rather 7-12% less, because sales tax will be computed when you spend this money.
Why not just charge the appropriate amount for Income Tax and be done with it...
In California, you are taxed when you earn a dollar, and taxed when you spend that same dollar.
If you look at your bank account and it's balance is $100, you do not actually have $100 in purchasing power, but rather 7-12% less, because sales tax will be computed when you spend this money.
Why not just charge the appropriate amount for Income Tax and be done with it...
Sales taxes penalize poorer people, who spend a greater proportion of their income. They are regressive and unfair.
In the UK we have two different kinds of income tax; one is called National Insurance, but it's not insurance at all. It's there so that the government can brag about reducing income tax.
When the UK joined the EU, we had to introduce sales tax (VAT). Part of the VAT receipts were to fund the EU. Note that VAT is much higher than US sales taxes (20%). Now we're out: whoopee! No more VAT! Oh, hang on...
In the UK we have two different kinds of income tax; one is called National Insurance, but it's not insurance at all. It's there so that the government can brag about reducing income tax.
When the UK joined the EU, we had to introduce sales tax (VAT). Part of the VAT receipts were to fund the EU. Note that VAT is much higher than US sales taxes (20%). Now we're out: whoopee! No more VAT! Oh, hang on...
> Sales taxes penalize poorer people, who spend a greater proportion of their income. They are regressive and unfair.
It's only unfair if the collected tax revenue isn't used to benefit the poor.
The US has one of the most progressive tax systems on the planet. Sweden has one of the most regressive [1]. A tax being regressive or progressive doesn't make it inherently bad or good. And if a country can't effectively utilize tax revenue then it doesn't matter who foots the bill.
[1] https://www.vox.com/2014/10/8/6946565/progressive-taxes-are-...
It's only unfair if the collected tax revenue isn't used to benefit the poor.
The US has one of the most progressive tax systems on the planet. Sweden has one of the most regressive [1]. A tax being regressive or progressive doesn't make it inherently bad or good. And if a country can't effectively utilize tax revenue then it doesn't matter who foots the bill.
[1] https://www.vox.com/2014/10/8/6946565/progressive-taxes-are-...
As a matter of cross-party practice over many years, UK sales tax (VAT) just goes into the government's general funds, same as income tax, national insurance, road tax, capital gains tax, inheritance tax and so on. There is a strong aversion here to hypothecation. That is: sales taxes are not used to benefit the poor, particularly. They are used to finance defence expenditure, tax cuts for bankers, and fees for pharma and consulting companies, same as other tax revenues.
I think the only exception is local property tax ("Council tax"), which partially props up the funding of local government. But that's capped, and most local authorities charge the maximum. So it might as well be paid by central government, out of the general fund.
[Edit] I take your point about regressive/progressive. The Vox article didn't use the term "progressive"; they said "broad-based". It's right that a tax-hike should hit everybody; but it's also fair that it should hit high earners harder than the poor, roughly in proportion to what they earn.
Wealth tax, as a tax on savings and property, is iniquitous.
I think the only exception is local property tax ("Council tax"), which partially props up the funding of local government. But that's capped, and most local authorities charge the maximum. So it might as well be paid by central government, out of the general fund.
[Edit] I take your point about regressive/progressive. The Vox article didn't use the term "progressive"; they said "broad-based". It's right that a tax-hike should hit everybody; but it's also fair that it should hit high earners harder than the poor, roughly in proportion to what they earn.
Wealth tax, as a tax on savings and property, is iniquitous.
WRT the Vox article. The infographic the x-axis is from "least progressive" to "most progressive" with the United States most progressive and Sweden/Denmark as least progressive. That's what I was directly referring to. The y-axis is "least redistributive" to "most redistributive" with US least and Sweden/Denmark most.
Hmmm. Perhaps I'm using one or more of these terms incorrectly.
Sales tax is at least easy to calculate back of the envelope.
> Sellers often hide these additional, mandatory charges by using small type, vague descriptions or misleading wording such as “service fees,” by bundling them with legitimate charges like taxes, or revealing them clearly only after the consumer has invested time in the transaction.
The tiny libertarian inside of me recoils at the description of taxes as legitimate, but that's a point for a different type of discussion. I'd just like to call attention to the concept of hidden fees being called out. And remember, that's fees, as in plural.
Government officials are pointing out that multiple end of sale charges can be confusing and misleading dark patterns? Ok, great, lets analyze that logic through for consistency.
Governments are engaging in the same bullshit.
Look at how many Government Fees and taxes are on my basic phone bill.
> City District Sales Tax - Telecom
> City Sales Tax - Telecom
> County Public Safety Communications Surcharge
> State Sales Tax - Telecom
> State Public Safety Communications Surcharge
There might be at least a few more, but I can't quite confirm if they're actually taxes or not.
You might say that paying a tax is a necessary part of a functional society. Again, I'm not here to debate that.
But why the bullshit with having an entire pile of random taxes given in a piecemeal fashion? If it's misleading and complicated for consumers to understand payments with 500 different surcharges and fees, certainly consumers also aren't understanding their true tax burden if they're nickle and dimed with tons of extra taxes that are only visible at the end of the process and not spelled out up front. If it's good for consumers to know about all of their commercial fees, shouldn't the same logic apply to taxation? Shouldn't voters be made to understand their true tax burden in the simplest fashion possible?
The tiny libertarian inside of me recoils at the description of taxes as legitimate, but that's a point for a different type of discussion. I'd just like to call attention to the concept of hidden fees being called out. And remember, that's fees, as in plural.
Government officials are pointing out that multiple end of sale charges can be confusing and misleading dark patterns? Ok, great, lets analyze that logic through for consistency.
Governments are engaging in the same bullshit.
Look at how many Government Fees and taxes are on my basic phone bill.
> City District Sales Tax - Telecom
> City Sales Tax - Telecom
> County Public Safety Communications Surcharge
> State Sales Tax - Telecom
> State Public Safety Communications Surcharge
There might be at least a few more, but I can't quite confirm if they're actually taxes or not.
You might say that paying a tax is a necessary part of a functional society. Again, I'm not here to debate that.
But why the bullshit with having an entire pile of random taxes given in a piecemeal fashion? If it's misleading and complicated for consumers to understand payments with 500 different surcharges and fees, certainly consumers also aren't understanding their true tax burden if they're nickle and dimed with tons of extra taxes that are only visible at the end of the process and not spelled out up front. If it's good for consumers to know about all of their commercial fees, shouldn't the same logic apply to taxation? Shouldn't voters be made to understand their true tax burden in the simplest fashion possible?
No mention of the ludicrous conglomeration of mobile phone fees?
Yeah that is annoying as hell. Comcast mobile is actually very clear and open- they have no hidden fees. Surprising from them.
Verizon can f off, 20%+ extra "fees" all the time.. glad I'm done with them.
Verizon can f off, 20%+ extra "fees" all the time.. glad I'm done with them.
Yeah it's interesting that I find myself saying something positive about Comcast. Their Internet pricing is similar. Advertised at $72/month, that's exactly what I pay. No additional fees tacked on.
T-mobile advertises monthly fees inclusive of all taxes and fees
im using hotels more and more often over Air BnB as their clickbait pricing reminds and makes me feel like Im dealing with a cable TV company such as Comcast.
Can't wait. AirBnB is one of the worst offenders here.
Interestingly, I believe Australia already did this, and so if you go to Airbnb’s Australia site you see the real prices.
Personally I hope this apppies to “resort fees” at hotels; it’s ridiculous that hotels can have a mandatory fee that they can exclude from their posted price.
Personally I hope this apppies to “resort fees” at hotels; it’s ridiculous that hotels can have a mandatory fee that they can exclude from their posted price.
Indeed, in Australia it's already a law. It's a well-known hack - go to airbnb dot com site and append .au to get the the full price including all fees.
Agreed— “resort fees” are totally insane in places like Vegas and Hawaii. Even at hotels that aren’t actually resorts! Just because you have a pool and a gym doesn’t make you a resort!
Airbnb isn’t even cheaper or more convenient for most travel situations.
This has been very true for several years now, unless you need a kitchen.
Never?
Obviously you can never say never, but in my experience AirBnB is very rarely more economical than a full service hotel. And residential homes are rarely in as convenient a location as a hotel.
It wasn't always so, but the hotel industry is large and powerful.
Airfares are another big culprit for this. When oil was at a high price, airlines started charging "fuel surcharges". There's no such thing. That service simply costs more. I think they also did it to (further) erode awards redemptions because they still had to pay any additional fees.
Uber famously did this with a safety fee when there was a string of negative news reports. What did this fee do? Literally nothing. They just pocketed it.
Airbnb is an obvious one of course.
Whenever I see anything like lack of transparent pricing and the necessary for such legislation, I have to chuckle at the expense of anarchists and libertarians because a strong government is necessary for any market to function. How are there any anarchists or libertarians at all?
Uber famously did this with a safety fee when there was a string of negative news reports. What did this fee do? Literally nothing. They just pocketed it.
Airbnb is an obvious one of course.
Whenever I see anything like lack of transparent pricing and the necessary for such legislation, I have to chuckle at the expense of anarchists and libertarians because a strong government is necessary for any market to function. How are there any anarchists or libertarians at all?
This is coming pretty hot on the heels of Biden's announcement. Does anyone know if this was already underway when Biden made this a key aspect of his SOTU address? It seems kind of weird to front-run the President (of your own party, in particular).
So like... what about the way CA taxes people who live in other states...
Seems kind of like hidden fees to me... folks livign out of state, but went on vacation to CA, or flew to the the bay area on a business trip, or whatever...
The biggest hidden fee of all time is CA taxing out of state entities.
Seems kind of like hidden fees to me... folks livign out of state, but went on vacation to CA, or flew to the the bay area on a business trip, or whatever...
The biggest hidden fee of all time is CA taxing out of state entities.
"Californians are fed up with being bombarded by junk fees that, more and more, are making it unaffordable to attend a concert, go to a sporting event, take a vacation, or stay at a hotel."
Oh, believe me, state Senator Nancy Skinner, requiring businesses to disclose these fees up front is not going to make these purchases any more affordable. Companies will either maintain the fees but comply with the disclosure requirement or remove the fees and jack up the base price accordingly. Either way, the goods and services they sell will not magically become cheaper.
What it will do, however, is level the playing field, which is good for competition, and may have some indirect benefits for consumers. So I'm very much in support of requiring up-front pricing. (In fact, it would be lovely to see pricing that's inclusive of all taxes as well.)
Oh, believe me, state Senator Nancy Skinner, requiring businesses to disclose these fees up front is not going to make these purchases any more affordable. Companies will either maintain the fees but comply with the disclosure requirement or remove the fees and jack up the base price accordingly. Either way, the goods and services they sell will not magically become cheaper.
What it will do, however, is level the playing field, which is good for competition, and may have some indirect benefits for consumers. So I'm very much in support of requiring up-front pricing. (In fact, it would be lovely to see pricing that's inclusive of all taxes as well.)
Leveling the playing field means increased competition which means better prices for consumers. It does make it more affordable. Your listed examples are discretionary purchases. So it might not matter much to higher earners, but I'm sure some median earners bounce when they make it to the final step in the checkout flow when all the fees are revealed and now it's out of budget.
Unbundling is a real thing, with some pronounced second order affects. The first order effect of charging for in flight food service and checked bagged is purely redistributive, but rise of low cost, heavily unbundled airlines has increased the total market for air travel, increasing net economic activity in the sector.
Assuming the companies are not hiding the fees for shits and giggles, we should see an impact albeit not as large as the entire fees but not $0 either.
increasing competition lowers prices.
The Republican response:
There is a point hidden in there, in that banning optional fees makes the price go up for people who refuse the option.
But when the fee is mandatory, hiding it is basically pure evil.
Much more developed argument than my pure evil comment: https://www.slowboring.com/p/junk-fees
Smart politics, but bad economics.
Ban baggage fees = higher ticket prices
Ban resort fees = higher room prices
Ban credit card late fees = higher interest rates
These proposals just make some consumers pay more to cover the costs of other consumers.
There is a point hidden in there, in that banning optional fees makes the price go up for people who refuse the option.
But when the fee is mandatory, hiding it is basically pure evil.
Much more developed argument than my pure evil comment: https://www.slowboring.com/p/junk-fees
It's not a terrible argument, except for resort fees. Tell me how I can opt out.
Consumers always pay the same. It's just not clear until it's too late.
Thus, there is a huge incentive for companies to lower the base price and then get it back with these types of fees. Even if they didn't add BS fees, this ease of price comparison has resulted in unbundling of services in a number of industries - e.g. airlines where the base price is akin to "we let you hang on to the wing", and everything else is an upcharge.
This is also a case where consumers say they want one thing, but their behavior is a different matter. For example, pretty much everyone says they prefer the full price to be shown up front in search result pages. But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion, where there is a lower up-front price and fees are only tacked on during checkout.
To be clear, I'm 100% in favor of this regulation because I think it's the perfect example of where what is good for any individual company leads to a dysfunctional market, and so government can provide a level playing field. Heck, I think many businesses would support this change, because they no longer need to try to one-up their competitors by overcomplicating their pricing structure.