California AG and state senators introduce bill to ban hidden fees | Hacker News Reader

California AG and state senators introduce bill to ban hidden fees

oag.ca.gov

399 pointsmiguelazo377 comments

I think a lot of comments here are missing the reason as to why these hidden fees have become so much more prevalent in the past 20 or so years. The short of it is that comparison pricing is now much easier to do because of the Internet, and many, if not a majority, of shoppers will just sort by price ascending and pick the first result (or, only pick from the first couple results).

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.

>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.

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...

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".)

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.

> 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.

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.

>>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.

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.

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.

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

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.

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.

> 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.

  > 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.

That's completely wrong. People don't want hidden fees. They chose those options that have hidden fees, because the fees are hidden and the total cost appears lower. Your AB tests don't compare what consumers want but what consumers are tricked into accepting.

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.

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".

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.

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

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.

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.

> 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.

> 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.

> 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.

> 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.

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.

> 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.

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.

My expectation for a no-assigned-seat group ticket is that we should be seated together but not anywhere particular (front/back, window/aisle, whatever).

At 2 that means a window or aisle seat, at 3 both. For the cheapest kind of ticket I’d expect they’d want to fill middles.

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.

> 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.

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.

> 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.

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.

> 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.

> 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!"

> 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.

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.)

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.

>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.

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.

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?

>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!"

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.

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 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.

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.

> 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."

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.

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.

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.

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.

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.

> 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.

> 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 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.

> 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.

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.

>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 not useful to have the one-time costs separated from the nightly costs when trying to compare options.

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.

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.

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.

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.

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.

> 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 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'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.

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.

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.

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%.

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.

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.

Great analogy, never thought of it this way.

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.

  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.wsj.com/articles/SB125363506624231121

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.

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.

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.

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.

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.

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.

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>)”

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?

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.

> 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.

> ...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.

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).

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.

  VAT is still shown on receipts in the UK same as it is in the US.

Even so, I'd bet that most Brits couldn't tell you what the standard rate of VAT is, or guess something between 17% to 23% (i.e. to within 15%). I'd imagine that a greater proportion of Californians could tell you that sales tax is about 10%.

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

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.

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...

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.

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.

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.

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

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.

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.

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.

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…

Nb. health insurance profit margins are now capped, in the US.

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.

> 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.

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?

This is not necessarily a bad thing. This incentivizes states and districts to compete on taxation and would likely drive sales tax down nationally.

> 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

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?

> 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.

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.

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.

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.

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.

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.

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.

>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).

"Either the wording of the law will have a ton of exclusions per industry."

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.

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

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.

Republicans say they don't want more legislation, not "bad" legislation.

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.

Florida begs to differ

What does a consumer protection bill have to do with regulation?

Uh...

It interferes with the sacred Right of Contract.

>>> 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

> 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?

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.

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.

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?

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.

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...

Very Californian

Yes, we should look at Texas where such a law doesn't exist.

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...

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?

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.

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.

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.

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?

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.

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.

> 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.

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.

> 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?

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.

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

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.

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.

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.

> 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.

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...

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...

Sales tax is at least easy to calculate back of the envelope.

Yes I think CA should be the next state to rid itself of sales tax!

As an opportunity to move to a more progressive tax system? Helping to reduce the tax load on lower income folks and shifting it up the tax bracket?

> 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?

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.

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.

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.

"most"

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?

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.

"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.)

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:

    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.

https://twitter.com/George_A_Callas/status/16233291827793182...

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.

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