Smart SpendingSmart Spending

4 stupid fee names

One of the stupidest is Spirit Airlines' $2 'Unintended Consequences Fee,' which the airline seems to be assessing just to make a point.

By MSN Money Partner Mar 16, 2012 12:58PM

This post comes from Matt Brownell at partner site MainStreet.

 

MainStreet on MSN MoneyHere at MainStreet, we're not crazy about fees. Airlines have made billions by charging fees to consumers for checking (and in some cases, carrying on) bags, while banks have tried desperately to recoup money lost to new regulations by charging checking account customers fees to use their own money.

 

Image: Airline (© Christie & Cole/Corbis)But what can be even more galling are the names they come up with to sell these fees to customers. Here are a few that we can't stand.

 

"Unintended Consequences Fee"

Hey, tell us how you really feel, Spirit Airlines. The carrier tacked this $2 fee onto its tickets in response to a new rule by the U.S. Department of Transportation mandating that airlines allow customers to get a full refund on their tickets within 24 hours of purchase.

"While this may appear to be a consumer-friendly rule at first, the USDOT has ignored the cost impact to consumers," Spirit said at the time. "As the transparency leader, Spirit believes that consumers have a right to know that this misguided regulation is expensive and is hitting consumers directly in their pocketbooks."

 

Spirit is correct that regulations do indeed have unintended consequences, and that giving consumers the ability to get a full refund will indeed lead to seats not being filled, which in turn hurts the airline's bottom line. But Spirit's claim that the rule is bad for consumers seems to rely on the notion that anything bad for the airline is in turn bad for the consumer. It feels as if Spirit -- which is notorious for charging fees on everything from carry-on bags to not paying your baggage fee early -- is assessing this fee just to make a point. (Post continues below.)

"Gift ticket fee"

What, exactly, is a "gift ticket"? Does it come in a special envelope tied with a bow? Is it delivered by an owl?

 

Those are a couple of the questions we asked when we heard that Greyhound was charging an $18 "gift ticket" fee. If the company is charging that much and calling it a "gift," there must be some great perks in the offing for the recipient. But it turns out that all you get in exchange for paying this fee is the ability to use your credit card to buy a bus ticket for someone else and have the person pick it up at the will-call window.

 

We sort of get why picking up at will-call might cost a bit extra -- after all, the company has to pay the employee who runs the ticket window. And Greyhound further explains that it covers the cost of fraud prevention services, the idea apparently being that if a ticket is bought with a credit card not belonging to the passenger, the company needs to make sure there's no theft involved.

 

That said, we can't think of another company that charges anywhere near this much money for the privilege of buying something for someone else, and the mind boggles at the idea that buying someone a gift is an action that requires an extra fee.

 

"September 11 Security Fee"

This $2.50 fee is collected by the airlines, but it actually goes toward funding the Transportation Security Administration's extensive security operations. And while we understand that 9/11 necessitated heightened security and that it makes sense for airline passengers to pitch in to cover the high cost, we don't see why it was necessary to put "September 11" in the name. It's almost as if 9/11 is being invoked here to keep people from complaining about the fee. Plus, is it really necessary to remind people of one of the nation's worst aviation disasters every time they buy a plane ticket?

"Convenience fee"

We're fine with paying a convenience fee when the company has to incur additional costs to provide us with an extra service. But often with a "convenience fee," it seems the company is penalizing us for making its life easier. Numerous companies charge you for "convenience" that doesn't actually cost them anything, and one recent example that comes to mind is Verizon, which introduced a $2 fee for wireless customers who pay individual bills online or over the phone.

 

While we understand that it's slightly more convenient for the company when a customer enrolls in auto-pay rather than paying each bill individually, it hardly makes sense that customers should have to pay extra for the privilege of reviewing each bill and paying it individually. It makes even less sense that customers could avoid the fee by mailing in a check, which surely takes more of the company's time to process. Following an uproar by customers, Verizon canceled the fee just a day later.

 

More on MainStreet and MSN Money:

7Comments
Mar 16, 2012 4:23PM
avatar

Soon we might get charge for fee to pee .Smile

Mar 16, 2012 7:31PM
avatar

Do we get to charge the company a fee, or take a percent deduction on the bill, for paying prior to the due date (a.k.a. early)? Many businesses reduce costs be getting discount for paying early (the earlier, the higher the discount). For the businesses offering the discount, they reduce their 'day sales' rate (or other metric they use for collection time), get the money earlier so have it for other uses, and increase their collection percentage (reduce non-payments) and risk.

Given that the cost of attorney fees, or write off when selling to a collections agency, costs them money, incentivizing early payment with a discount to consumers makes sense. I doubt Verizon, Visa, MasterCard, AMEX, most local electric companies, etc, will generally adopt the incentive since they can play the fear card easily (credit reporting - a bad report, even if not valid, will cost you more on many things for years). Some businesses prefer playing the hostility game. All this hype that they want more info on you to 'better tailor goods and services' is a crock; they either want to generate additional revenue by selling your data, want to reduce their costs of obtaining the data, or want more info to better seduce you into spending on other things that generate them revenue. I'm for reducing costs, making profit, etc but when the business wants stuff for free to make more money and isn't compensating by lowering costs then I don't provide the information.  

Mar 16, 2012 6:41PM
avatar
Love it the TSA molests us and we pay a fee for it.
Mar 16, 2012 6:04PM
avatar
Some airlines have tried that fee to pee, not so funny now.
Mar 16, 2012 5:50PM
avatar

Europe's VAT should be first on the list.

Value Added Tax  my **** !

Where is the added value ?

Politicians think that if you give it a nice name the stupid public won't care as much.

Mar 16, 2012 6:03PM
Mar 16, 2012 5:30PM
avatar

I get that people want someone else to pay for everything these days, but these fees represent what these things cost.

Of course forcing the airlines to refund tickets, leaving empty seats costs money.

Greyhound deals with sketchy people (not all, but many). I'm sure their fraud rate is higher on tickets bought with a card that doesn't match the rider, and willcall isn't free.

The TSA doesn't work for free, either.

And Credit Cards taken over the internet or phone are mailorder/telephone transactions - and because of fraud on those, the rate is 3-4% which is double the normal rate. On a $100 Verizon bill, that's $3-4 dollars. They were only charging $2.

Don't like the fees, stop making the Gov't regulations that cause those expenses. Or behave in the way that doesn't incur the fees.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More