Thursday, June 26, 2008

There's a fee to read this blog

I visited a web site the other day that listed vacation properties - places to rent if you want to get away for a week. I discovered (in time, thankfully) that to book through them, you were required to pay a $75 "transaction fee".

Now, many of you are surely wondering what the big deal is. But think about it - a fee to process the transaction?! Every business in the world processes a transaction at some point. This is purely a way to appear less expensive, when really they aren't. In this case (as an example), booking a rental through them costs $925... plus a transaction fee (in mice type of course). They are hoping that you will compare that price to another agency renting the same place for $1000 (with no extra fees) and assume the $925 price is that much better.

They are assuming that we are stupid, and that bothers me.

It is clear to me that "transaction fees", "processing fees" and "administrative fees" are sneaky pricing illusions designed to disguise the real price and fool the consumer. And often times, it's too late - you go through the (usually online) transaction process only to discover that the "transaction fee" makes the price higher than one of the other options you may have considered.

The airline and automotive industries are notorious. Two Hondas ago, I actually challenged the dealer about that. I asked "what is the $250 administrative fee for?" Without a word of a lie, he couldn't tell me. Neither could anyone else in the dealership (I made him ask). Now, I'm a big fan of Hondas, so I bought the car anyway. And Honda is not the only perpetrator in the industry. The point is, that was Honda's way of adding $250 to their bottom line without making the car $250 more expensive... in the consumer's mind. It's backhanded, deceitful and arguably unethical.

Don't do it.

Make the price the price. When the consumer gets to the part where they have to pay, all that should be added is any applicable tax. Otherwise, you're just being deceitful.

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