The Other Side of Cheap
As the old song said, “Strange Things Are Happening.”
Thanks largely to the computer, it is easier than ever to shop for price. You name it, you can find out who is selling it cheaply. That has forced prices down to rock bottom on everything from cameras to hotel rooms. Sounds like a good thing to me.
But there is another side of the story.
Look at banks for example. Back in the dark ages (around 1970, I believe), the Truth In Lending Act required lenders to disclose to the borrower the Annual Percentage Rate (APR) being charged. APR was just the “real” interest rate. Before that, it was absolutely criminal the way interest rates were quoted and charged. Most of us, however, grew up with APR and have learned to see it spelled out in the loan application. That was a good thing. You could shop among local lenders for the lowest APR and that led to lower rates.
Then—within the last few years—banks became adept at adding fees along the way. You would be quoted a certain APR, then the fees would drive the total higher. And have you paid any loan even one day late recently? You wouldn’t believe the fees and even the raising of the interest rate for the balance of the loan.
Hotels did the same thing. They’d quote a rate of, say, $89 per night (I stay in cheap hotels) without mentioning fees like “gas increase fee” charged at checkout (I am proud to say I never paid one of those—I just said I called you, you quoted your price and that’s all you’re getting. They always knocked it off the bill.).
Recently, American Airlines announced a new fee of $15 for one checked bag. That allows them to quote low fares then collect extra money.
Here’s the rub. We tend to shop for the lowest price. These fees add a little sleaze factor to the bottom line. Further, they make it hard for even good suppliers to compete without the sleaze factor.
What we can do? Always, no matter what you are buying, ask for the total price, including any and all fees. Then ask questions about fines.
It won’t work perfectly, but it will help.
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Dave–
And how about rental cars! I just rented a car for a business trip to Gainesville, FL. The “Taxes Surcharges and Fees” (they don’t want me to know which is which) include: Customer Facility Charge, Concession Recoup Fee, Florida Surcharge, Tire/Battery Fee. Damn! I am paying for their rent, their concession on the airport, and for tires and batteries on top of the rental charge!
Seems like all that should be included in the rental charges, doesn’t it. I gave up fighting it and just ask for the total, all-inclusive price.
Ralph Hood
Cell Phone is the worst on fees and elec co is a close 2nd. Soon their will be a charge for Exc wash room toilet paper on the bill! But Net 10 is the best cell deal around if you want to pay as you go and dont talk a lot. Buy the cards in a tax free state and you can have a Phone for 15.00 a Mo. I now see it on 100LL some airports bill tax etc as another line Idem. Thanks their are still good places in GA and crew cars. I always gas them up and thank the aiport Mgr several times. At 68 years old I found a dream job flying Pipe Line in a 172, apx 30hrs per week, not that I need the time but I get around to seven states and meet a lot of great people! Dave Denning
Home Base Farmers Pride 9N7.
Good gosh, Mike, don’t give them any ideas about those sorry, guvmint-approved toilets.
(For readers, Mike is an old pro in aviation and has been for decades. I’m proud to get his comments.)
Ralph Hood
How about the charge for using the phone in your hotel room? This makes about as much sense as charging for each time you flush the toilet.