Saturday, December 17, 2011

"Just Tell Me the Real Price, Please!"

     Something's been bothering me lately. It's all the extra surcharges that seem to have cropped up, anywhere and everywhere you buy something.

     It hit home when I started booking my February trip to Arizona and California. Forget the airline, which is going to charge me for having the audacity, the sheer nerve, to bring a suitcase along with me. I'm thinking of the one-week rental I'm taking in San Diego. There's the base price of $1,299 for the week. It's expensive; but four of us will be there for at least part of the time, so we need two bedrooms, and when we split up the cost it's not all that much.

     But wait ... that just scratches the surface. There's an 11 percent hotel tax. Okay ... you gotta pay the government. Then there's a $125 cleaning fee. Don'cha think that's kind of steep for a two-bedroom townhouse?

     But that's not all. There's a "Peace of Mind" damage insurance fee of $25 that covers breakage. It's mandatory. You pay $25 whether you break something or not.

     You can opt for additional coverage, at more expense of course. And you can buy travel insurance -- because if you cancel for any reason, including serious illness, the rental office will only refund your money if they rent out the premises to someone else. And even then they'll exact a 10% penalty.

     There are yet more optional charges, but you get the picture. The $1,299 rental will really end up costing north of $1,600.

     Okay, you say, don't deal with these people if you don't like it. But, unfortunately, I see this kind of transaction becoming the norm, rather than the exception.

     It used to be only car dealers who tried to pull these shenanigans. They advertise one low price. But before you drive out of the showroom, they’ve somehow added on a list of fees like the “sports package,” the “safety option” and the “destination charge.” Then there’s the sales tax. And the financing charges. And if you lease a car? The extra fees just pile up faster.

     Last year I bought a car through one of the big box stores. I refused all the extra options. It was about as simple a purchase as you can get. Yet even with that, there was quite a difference between the advertised price, or what I think of as the “base price” and the real price I had to pay.

     The price of the car was $27,653. But that was the base price. Once we added the destination charge, the state tax, and three or four hidden charges (including something called a “Dealer Optional Fee,” whatever that is) the actual cost was $30,385. An extra $2,732. Almost 10 percent more. And that’s without the financing costs.

     Unfortunately, instead of the car companies getting better, the rest of the consumer universe is getting worse. I bought two new tires. “Oh, it’s not bad,” the auto mechanic assured me, “only 99 bucks a piece.” But once he added the weight charge, the EPA tire fee, the balancing fee and the local tax, the real price for two tires was $258. An extra 30 percent!

     Auto insurance? By the time they tote it all up, it’s twice what the basic rate is. And the bill adds insult to injury with a $5 “Law Enforcement Fee.” I don’t know what that is, except it probably makes it easier for the police to give me a ticket.

     And have you looked at your cable bill, or your cellphone bill? My basic phone and email charge is $101. But add up all the service charges, administrative charges, usage charges, surcharges and state and local taxes, and the monthly bill comes to $155.

     I bought two tickets to a sports event, for $60 each. They wanted to charge me extra -- to print the ticket from my computer! I skipped that (they sent tickets by mail for free), but still got assessed a “convenience fee” and an “order processing fee” and instead of $120, it was $139.25.

     I purchased two tickets to a Shakespeare production. In addition to the ticket price, I had to pay a “facilities fee” and an “online processing fee.” What would the Bard say about that?

     I’m not detailing all these annoying, and ultimately expensive, fees just to complain. Instead, consider this a warning. A wake-up call. When you budget for a new purchase, make sure you account for the difference between the “base price” and the real price. And you might consider this:  The bigger the difference, the more the business is being dishonest. It’s trying to “bait” you with a seemingly low price, then “switch” you to a higher price.

     Avoid those fees if you can. If you can’t, say something, just so they know you’re “on” to them.

     Unless . . . if we could figure out how to add some extra fees into our paychecks or Social Security checks. Imagine looking at your pay stub and seeing a couple of extra line items – you collect an extra $140 as a “work optional” fee and another $75 as a “showing up” fee.

     Yeah, that’ll happen.


schmidleysscribblins, said...

I worked for Bell when it went through the breakup ordered by a Democrat appointed judge. You can thank him for the messy phone bill. The phone company (Verizon) is trying to get the whole thing back together again under one billing system. I hate to think about what the new health care law will do to our insurance nightmare next year. Dianne

Linda Myers said...

Annoying, for sure.

June said...

I dragged your "new tire" story past used car dealer husband.
"Yup," he said. "$50 per tire to dispose of them..." That must be the "EPA fee."
Remember when you used to be able to go to a new car dealership and get a price for a new car? And then several years ago they started NOT TELLING what the price of the vehicle was, but only what the monthly payment would be. You couldn't GET 'EM to tell you the bottom line price. They DIDN'T WANT you to pay for the car, cash on the barrel head.
The reason: Finance fees.

Stephen Hayes said...

A while back Mrs. Chatterbox and I decided to refinance our house. One of the fees we had to pay ($150.00) was for someone from the bank to drive over to see if there was actually a piece of property at our location. And we hadn't even changed banks! This was the bank we had our original loan with and so they'd already charged this fee the first time round.

Olga said...

At least "creative thinkers" who can come up with an endless variety of fees to charge consumers are still employed.

Catch Her in the Wry said...

You can thank the government for many of the additional fees.

Retail and ticket outlets are now charging processing fees which generally represent their cost for credit card charges. Credit card fees are so high now that rather than raise the product prices which would irate customers, they pass the the credit card fee on to the credit customer. This in essence gives a discount to customers paying cash.

Banks charge "drive by" appraisal fees even on loans they already have so they can be assured the property is being maintained and still worth the value of the loan. They can still get burned on the loan if the interior is wrecked, but that would cost the borrower more money for a full interior/exterior appraisal.

I've walked away from sales people on big ticket items when they began adding on to an already agreed price. 9 times out of 10 they call me back and say they'll absorb the costs to seal the deal.

Nance said...

We'll be heading for San Diego for the middle two weeks of February. Shoot me an email, please at maturelandscaping(dot)gmail and let me in on the not-so-fabulously-priced spot you chose to rent. We go at least twice a year to visit family and there aren't a lot of good deals to be found.

Also, maybe a blogger meet-up opportunity in the making. Thanks for reminding me that we need to be booking flights, etc., now!

Grumble on.

Kay Dennison said...

I feel the same way!!!!

Douglas said...

It's nothing new, really, it's been this way for as long as I remember. The thing about new cars that is different in the last couple of decades is the concept of option packages. When I was a young lad, you went to your local car dealer of choice, selected the model you wanted then bought the options like heater, radio, and so on. The dealer assessed your trade-in, you agreed on the price and he put the order in. In a week or two, he called you to tell you your car came in and to come get it. Now, you buy safety packages, luxury packages, technology packages, and each of them includes items you probably don't want but have to take to get the one or two you do want.

And I always tell the dealer I will not pay a destination fee or a dealer prep fee. The car's already here , isn't it? And I can run a car through a car wash for $6.

You can tell I haven't bought a car in 6 years.

Jono said...

I grew up in Delaware, a state with no sales tax. It took years to get used to that "extra fee" in most of the other states. The smart thing was that people in Pennsylvania, Maryland, and New Jersey came over to spend their money. It was terrific for merchants.

Dr. Kathy McCoy said...

I so empathize with your frustration, Tom! Those extra fees are everywhere and unbalancing even the most carefully planned budgets.

Pearl said...

I very much concur with your conclusion. :-)


Robert the Skeptic said...

This is why I love to eat at Asian restaurants... the menu items are almost always like $8.00, not $7.95 and there is no tax, add on, or special handling fee.

I used to work for a bank years ago. We had an "origination" fee for a mortgage loan. This was supposed to be the cost of drawing up the documents. But then they added a "document fee" for that purpose, so what was the "origination" fee for?

The bottom line is all these fees, be it "fuel surcharges" or "handling fees" are completely made up because they CAN. Your choice is to choose not to buy the product/service or pay the fees. Welcome to Capitalism.

Knatolee said...

Our government has announced regulations forcing airlines to advertise exactly what the passenger must pay. No more $99 seat sales for tickets that actually cost $250 after tax and surcharges! I think this is a good thing.