A woman reading receipts and holding a credit card.George Doyle/Getty Images
Nobody likes service charges but something people like even less are charges that are tacked on at the very end of a transaction.
My husband and I recently decided to purchase tickets for a play, so I went online to the theatre's website (they handle their online sales independently) and found four great seats for a matinee. They were $20 for adults, $15 for youth and seniors, which seemed quite reasonable. It would be $70 for four of us, before tax. My husband gave me his credit card and I set about completing the transaction.
One click later, I was informed that the cost would be substantially more than $70. There was an added service charge of $12, which brought the total up to $92.66, once taxes were included. My husband was ticked off about the extra fee – $12 seemed pretty high – but we proceeded, setting up an account with a username, address, password, and so on in order to complete the transaction.
Then, one more click, and I was informed there would be an additional fee of $6, in order for us to pick up the purchased tickets at the box office.
It was the straw that broke the camel's back – my husband put the brakes on the transaction. For him, $18 in service charges seemed excessive, especially since we were picking the tickets up ourselves. He e-mailed the theatre to tell them they had just lost a customer.
Tacked-on service charges are a common irritant of online sales, particularly when purchasing tickets for a concert or a play. And it's particularly irksome when the charge gets added on after you think you've got a handle on the price. Adding the cost near the end seems like a retailer's sneaky way to grab a few extra bucks just before you hand over those credit card numbers.
Ken Whitehurst, executive director of the Consumers Council of Canada, says consumers should expect to know what something costs before they decide to buy it. "We have a basic principle that before a consumer makes a purchase decision, it is fair for them to understand all the costs," he said.
There are rules and regulations about how a price can be presented or advertised, enforced by the Competition Bureau. But these rules vary depending on the product and the industry. If a consumer feels that something is being presented in a way that doesn't reflect its true cost, they can and should contact the Competition Bureau.
According to Mr. Whitehurst, there is a move towards greater information disclosure in pricing, something that he thinks can only be positive.
"It's important that people understand the total cost of a transaction when they are making the buying decision and that includes everything from surcharging to taxation," he said. "People at a practical level need to understand their all-in price, and it shouldn't be hard to find that."
One of the companies most criticized for their high service fees – Ticketmaster – has been moving towards an "all-in" pricing model. In fact, in August, 2010, Ticketmaster CEO Nathan Hubbard launched a blog with a post acknowledging the public's dislike of service fees, particularly the fact that they get added on late in the transaction. Accordingly, the Ticketmaster buying process was redesigned so that buyers see most of the service fees as soon as they select the tickets.
Indeed, when I clicked on an upcoming Avril Lavigne show on the site, the price was shown as $62.50: $49.50 for the ticket, $2 for a "facility" charge and $11 for a "convenience" charge. (However, Ticketmaster did tack on a $5 "order processing charge" just before the final transaction was to go through, which shows that "full disclosure" pricing has a way to go yet).
But what about those theatre tickets I was hoping to purchase?
My husband's complaints did not fall on deaf ears. He was e-mailed back the next day – the theatre sales manager apologized and said that the charges were to "cover the hard costs associated with the ticketing system and in particular the bank charges levied against merchants for credit card purchases."
He also said we could avoid all service charges if we bought the tickets at the box office with cash. It was good customer service, although my husband noted that they should have had that information on their website.
Now that we know how to avoid the extra fees, my husband will be dropping by the theatre box office to pick up our tickets. Unfortunately, that might not always be an option.