Why are businesses charging for things that should be free?- Martyn James
Drip-pricing. This is where businesses hide the true cost of goods or services by offering a cheap starting price, then adding on so many additional extras that what you pay at the checkout can be much higher. Like buying an airline ticket for £30, yet after seat charges, luggage costs and priority boarding you end up spending £150.
Micro-charging. This is where businesses charge you small amounts for things or goods that used to be free. For example, some email providers now charge as much as £7.50 a month just to allow you to keep your current email address.
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Hide AdAncillary charges. This is the traditional term for any additional charge associated with something you purchase. I hate this phrase! If you see it, assume you’re being charged extra for something.
Rishi Sunak has told the Department for Business and Trade to look in to drip -pricing and its impact with the possibility of clamping down on it. But I wouldn’t get too excited. That’ll be ages (if it happens). So here’s some advice on how to spot drip-pricing and micro-charging in three sectors. Be warned though, it’s happening everywhere, from dating sites to pet insurance.
Airlines
Airlines are the masters of additional charges and fees. Despite over a decade of warnings, clampdowns and threats of legal action, drip-pricing and micro-charging is endemic with most airlines.
Most airlines have now started charging for a large cabin bag (formerly free) and massively increased the price for hold luggage. These hold prices can rise higher as the travel date approaches. Seat allocation charges are deeply unfair. If you want to sit next to your family or friends you will have to pay anything from £6 to £30 or more for the privilege. Otherwise you’ll be separated and stuck wherever the airline can fit you in.
Ticket companies
If you’ve bought tickets for a gig, event or festival recently, then you’ll have encountered the horror of excessive booking fees. These fees are getting ridiculously high and you can’t opt out of them.
Much outrage has ensued over these fees being used to disguise the actual cost of some events, with artists and ticket companies blaming each other for the final cost at checkout.
Ticket companies love a bit of micro-charging. The most common example is ‘gig cancellation insurance’. These policies are usually available before you pay for the final bill and offer to cover you if a gig is cancelled or delayed. Only if a gig is cancelled you are entitled to a full refund anyway. And if you can’t attend a rescheduled gig, then you should get a full refund too. So it’s hard to see a set of circumstances where these policies could be useful.
Car finance
Car finance (PCP) deals are ludicrously expensive. There are a range of additional charges that can apply at the start of the contract and when you return the car at the end too.
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Hide AdAny damage, even minor, could result in hefty repair bills. And rather outrageously, you’ll have been given a mileage limit when you took out the contract and if you are over the limit, you will be charged by the mile!
Originally, car hire purchase deals meant the business ‘owned’ the car until you had paid it off, which meant they had to tackle repairs and damage. PCP deals leave you responsible for all of these payments and more.
In a crafty and rather shameless move, car finance companies have realised that they can sell a range of insurance policies to cover things like bumps and scratches, alloys, windscreen damage and more too.
Shop a business
If you spot a firm micro or drip-charging, let me know – I’ll write about it in a future column!
Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. Visit martynjamesexpert.co.uk
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