That’s some blockbuster! Movie theater charges 50-cent “service fee” on ticket

Just when you thought you’d seen it all, along comes another business with another absurd fee.

Consider what happened to Michael Pennock, who was visiting Southern California last weekend. He decided to catch the latest Ghostbusters sequel at Pacific Theater Lakewood near Long Beach, Calif.

The price for his matinee ticket: $9.

Then he arrived at the ticket booth.

“At the window I was told it was $9.50,” he said.

Huh?

Pennock asked a theater employee, who said, “Oh, the ticket is $9 and the 50 cents is the service fee.”

“It covers things like handling credit cards and other back-office expenses,” the employee explained. “We separate this out so the consumer can see what pays for what.”

That didn’t sit well with Pennock.

“I pointed out that neither the chain nor the theater mentioned a service fee anywhere online that I could see,” he says.

Not true, the employee replied. “We post it on the marquee.”

Pennock thinks it’s a hidden fee, similar to the hotel resort fees spreading like a virus across the country.

I contacted the theater to get details on the fee, and what it covers. No one has responded.

“Fifty cents isn’t a huge amount,” admits Pennock. “I suggested they just roll that into the ticket price. After all, it’s just the cost of doing business for all other theaters that don’t tack on a service fee to try to make the ticket look cheaper than what they really charge.”

But I wondered: Are movie theaters about to take a page from the hotel industry playbook of dishonesty? Perhaps.

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For example, Cinemark adds a service fee . As it explains,

Why is a service fee added to the price of each ticket?
In order to provide this convenient online service, we add a minimal charge as a service fee. By purchasing tickets online in advance, you are guaranteed a seat and avoid a sold-out showing. You can avoid service fees at cinemark.com by paying with a Cinemark Gift Card.

Sites like Movietickets.com also have “service” charges that they justify with the following language:

Why is there a service charge added to the ticket price?
The nominal fee set by each theater covers the convenience and costs associated with purchasing your tickets on MovieTickets.com. You may enjoy such conveniences as bypassing the box office lines, buying advance tickets to popular movies, and being assured that you will not be turned away from a sold out show. Also you have free access to showtimes, movie and theater information for almost every theater.

The service fee associated with your order is displayed to the left of the ticket price on the transaction page where you select your ticket type and quantity.

California laws prohibit “untrue or misleading” advertising, which some might argue the Lakewood theater has engaged in by disclosing its 50 cent fee in a place where only a few people might look.

This fee is bound to start an argument here.

On one side, the free marketers and personal responsibility crowd will claim businesses ought to be able to do anything, as long as they disclose the fee at some point. It’s up to consumers like Pennock to find the fine print, review it and understand it. If Pennock didn’t see the 50 cent disclosure on the marquee, it’s his own fault.

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What’s more, the government has no business regulating a service fee, which represents the free market at its finest, these laissez-faire capitalists would argue.

On the other side, we’re likely to find outraged consumers, who believe Pennock is entitled to some common-sense protection from the government. What’s to stop a movie theater from advertising 50 cent tickets with a $10 service fee, they would say. By not enforcing state and federal statutes against unfair and deceptive advertising, the government is essentially giving businesses a license to lie — a license that they should not have, especially in a free market.

How hard can it be, these pro-regulation folks would argue? The price you see should be the price you pay. No more, no less. They would even argue that a market can’t truly be free if prices are hidden.

I don’t know which side you take in this discussion, but I can tell you this: Something doesn’t feel right about this one.

For me, it raises a fascinating question. Whose rights are more important? The rights of a business to quote a rate it wants, or the rights of a consumer to know the full price of a good or service?

Who is right?

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

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