Look out! More nonsense fees are coming in 2014

Aaron Amat/Shutterstock
Aaron Amat/Shutterstock
One dollar.

That’s the surprise fee Karin Melick-Barthelmess saw on her bill for an American Airlines flight from St. Louis to New York. It was listed as an “American Airlines Internet surcharge,” she says.

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One dollar may not sound like a lot, but when American businesses in general — and travel companies in particular — build their entire ventures on fees like that, it is a big deal. (American raked in $266 million in ticket change fees and $255 million in baggage fees during the first half of 2013. It’s on track to collect more than $1 billion in fees for the year, with most of them coming in a few dollars at a time.)

Here’s my prediction for 2014: more nonsense fees.

But they’re going to be smaller than ever, in increments you hardly notice. They belong to a subset of junk fees I call microjunk fees. They’re $5 or less, an amount that even the most price-sensitive customer sometimes fails to notice. But add them all up and they can turn a money-losing business into a profitable operation.

For example, starting May 1, discount airline Allegiant will charge a $5 per “boarding pass fee” to passengers who choose to have a mandatory boarding pass printed out at select domestic airport locations. Wow, is paper really that expensive? Spirit Airlines, one of the most innovative companies when it comes to fees, is considering a sliding scale for its fees next year, presumably so that when customers have second thoughts about the extras, it can shrink them until they don’t hurt at all. Tricky.

Underestimating their own customers

Are we that dumb? No, but we’re suffering from a collective fee fatigue, and the businesses imposing these unethical extras know we’re far less likely to fight a $1 or $2 fee. When we protest, they either quickly agree to remove them or explain that these fees enable them to offer the lowest fares and give customers a “choice.” Which, of course, is hogwash.

A better question is: Are they that dumb?

Don’t they remember Blockbuster Video, the business that was built on ridiculous fees? Some say it went belly-up in 2013 because of changes in technology, but customers know better. They remember the “late” fees and “rewind” fees upon which the business appeared to build its profits.

Blockbuster may have been done in by one $40 late fee in particular, which it charged to a young customer named Reed Hastings in 1997. Name ring a bell? Yeah, he founded Netflix.

Companies that charge microjunk fees are playing a dangerous game by dismissing their customers as dummies, and they’re failing to learn from the failed businesses of the past. You deserve better.

Remain vigilant in 2014

You have to keep a watchful eye for these ridiculous fees, which are often added to your bill with little notification or justification. Melick-Barthelmess didn’t tolerate her fee, immediately contacting me to find out if I could help her.

“Is that the way of the future?” she asked.

The answer is obvious. Unless people like her stand up to these surcharges, we’ll all have to pay more of them in 2014. Of course, that doesn’t make them right or excusable. It would just mean we didn’t bother to say anything, and the fees stuck.

I admit, there are a few industry cheerleaders who claim little junk fees that pay for the “convenience” of printing a boarding pass — or rewinding a VHS tape, for that matter — are good because they offer consumers a choice. You can choose to print the boarding pass at home, or rewind the tape, and save money!

That is, of course, as absurd as it sounds. It’s the kind of propaganda that comes straight from a company’s PR department and is endorsed by dimwitted bloggers pretending to be consumer advocates. Just ignore it. I do.

I contacted American Airlines on Melick-Barthelmess’ behalf to find out if it had added a new $1 booking fee, or was testing a $1 booking fee for some of its online reservations. After a lengthy back-and-forth, American insisted it wasn’t charging a booking fee or testing one. Instead, it claimed Melick-Barthelmess’ credit card had charged a dollar for making the reservation — even though it was clearly labeled as an American Airlines charge.

So whodunnit? Who knows. After I asked American about the fee, it mysteriously disappeared.

“I certainly suspected American as the guilty party,” says Melick-Barthelmess.

Something tells me I’ll be hearing from a lot more consumers who are slammed by microjunk fees in 2014. Mind the little things next year, or you could be among them.

Do you think companies will impose more junk fees in 2014?

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79 thoughts on “Look out! More nonsense fees are coming in 2014

  1. Companies can and will try to nickel and dime us to death if we don’t complain, especially when we allow less competition (bank fees?). It is very difficult for a single customer to say ‘no’ and effect a change across the board. We need a new public advocate like Ralph Nader, who can rally consumers and put pressure on these companies en mass. It should be much easier now with social media than it was in Nader’s time.

    1. One way to put pressure en mass is to make it COST far more than the fee is worth. If even a small proportion of travelers called up and made the airline ‘research’ every fee, and then e-mail them proof, these fees would quickly end. But who has time to do that?

      We do. Since we can use our cell phones during boarding, deplaning and taxi to the gate, use that time productively to call the airlines’ customer service numbers and DEMAND written documentation about that $1.00 fee. And most of us have unlimited talk time, right?

      Just think when they allow us to use our cell phones in the air. Oh the hours we can spend demanding documentation from the airlines on that four hour jaunt to LGA!

      1. Yep, you can be on your cell phone – connected through the airline’s on board cell node paying at least $10 an hour! And don’t forget your cell provider’s roaming charge because the connection will not be considered part of their network. 😉

  2. I’m going to leave the larger question about fees, but Blockbuster was not done in by junk fees. That’s just untrue.

    Blockbuster was a behemoth until changing times caused a shift in customer purchasing habits. It had the distinction of being one of the few video stores that was profitable without selling porn. Its “be kind, rewind fee” has been in place since late 80s, early 90s. Blockbuster charged a non-punitive late fee which was as customer friendly as any other rental business. Keep a rental car an extra day, stay an extra day in your hotel room,etc, you should pay an extra fee. It’s hardly a junk fee.

    What killed Blockbuster was a combination of customer’s changing perception of convenience and finite inventory both a result of changing consumer habits. Kiosks in grocery stores and convenience stores, automatic mail order, and instant online deliver killed blockbuster.

    So much easier to just click and stream. No driving to the video store, no “I’m sorry we don’t carry that video” or “I’m sorry no copies are due back before tomorrow“. No forgetting to return the DVD, no worrying about the store hours. Mai order was almost as easy.

    Give me one good reason why someone should rent a physical DVD from blockbuster, if they can rent the same video electronically from Amazon,

    Blockbuster tried to make changes but by then other companies has become entrenched in the market.

    1. Wow! For once we agree. While I’m sure the fees didn’t help their cause, Blockbuster was done in by the changing marketplace, mainly streaming video.

      I can give you a reason to rent a DVD, though. When I buy a DVD, I rip it to my PC, make a copy, then put the original away and only use the copy. I could do the same thing with a rented DVD. It’s just a little less ethical.

    2. You forgot one major point of contention Carver. Blockbuster’s unwillingness to adapt. When Mail Order DVD services came about, Blockbuster snubbed it’s nose. Blockbuster entered the game after the sod was laid and the game was long over. Netflix had it’s foothold.

      Then came about the Redbox Kiosk and again Blockbuster sat idle.

      By the time Blockbuster tried their own Mail Order Dvd and Kiosks, two feet were in the grave. Then, streaming came about, and Blockbuster still failed to budge.

      To reiterate, Blockbuster’s Management unwillingness to adapt to a changing environment is why Blockbuster failed.

      1. Carver did point this out… “Blockbuster tried to make changes but by then other companies has become entrenched in the market.” The changes in the market listed by Carver is what created the competitors. Blockbuster didn’t take them seriously until it was too late.

    3. I think Blockbuster was done in by their DEPENDANCE on junk fees. Anytime a company depends on their fees as a significant portion of their income, they are doomed when things change and that fee becomes noncollectable. When everyone moved from tapes to discs, the rewind fee disappeared. While the fee on a per-customer basis was minimal, it did generate income. And the cost to rent a single current release disc was significantly high the last time I went into a Blockbuster compared to Red Box or even Netflix, which didn’t help.

      A more current example of fee dependance was a local government agency which switched from taking checks for payment to accepting only debit cards. While they were able to reduce their staffing because there were no more returned checks to process, they were losing money because of the fees charged for every debit transaction and they were no longer collecting the return check fees. They previously had so many return check fees, many exceeded the amount of the actual check, that it was actually part of their budget for payroll expense. They now take checks again.

      There still is a market for physical disc rental. Look at the success of the Red Box approach. Even Netflix still rents a considerable number of actual discs. This is because not everyone has access to internet connections of a high enough speed to provide an enjoyable viewing experience.

      1. I am going to have to respectfully disagree. The rewind fee was 50 cents. I’ve been renting from blockbuster since 1987. In that entire time, I have never once been charged a rewind fee. I don’t believe they really charged that fee with any regularity.

        At the stores I frequented, you’d see the clerk checking in numerous videotapes with a scanner. They’d put every tape through a rewinder, but they never charged anyone.

        As you correctly state, Blockbuster primarily went to DVDs many years ago. That of course reduces whatever pocket change that Blockbuster made from this so called “junk fee” to basically zero. Had Blockbuster considered this fee to be a real source of revenue, it would have tried to replace this fee years ago with another ancillary fee, which it did not.

        Outside of this nearly on-existent junk fee, I think we agree. Blockbuster’s fundamental business model, i.e. a full service video rental was simply a model whose time had passed, much like full service gas stations and elevator operators. As we both mentioned, physical DVD rental is alive and well. Kiosks abound e.g. Walmart, 7-11, grocery stores, etc,

        My main point (after the two long rambles) is that it is disingenuous to argue that a dependence on a rewind fee (particularly one which hasn’t existed in years, was a major contributing factor to Blockbuster’s demise.

    4. How about the large portion of the US that does not high speed broad band Internet? Ever tried to stream using satellite Internet? Or my whopping 500kps “broadband” fixed wireless? While I never rented from Blockbuster, I did use Netflix’s mail DVD’s a lot.

      1. Agreed. Not everyone can rent electronically, hence the “If”. Those folks are probaby going to the Kiosk or Netflix. Curiously, the US is only number 24 ranked by percentage of folks with fixed broadband connections, but we jump up to number 9 when it comes to mobile internet subscriptions (again by percentage)

      2. Netflix has a deeper problem than that. In line with its initial strategy to switch almost entirely from DVD to streaming distribution, it spent a boatload of money on new servers and demoted its disk operation to an afterthought “division.” Then it discovered that Hollywood didn’t accept the streaming model because of its Byzantine licensing rules. Even today only a small selection of Netflix’ total inventory is available on streaming. Customers who want the full inventory of movies and TV shows have had to say with DVD subscriptions.

        1. What I do is maintain accounts with both Netflix and Amazon. I use Amazon for new releases and other content that’s unavailable on Netflix.

    5. I think the author specified that Netflix is what helped to kill Blockbuster and that Netflix was created because of late fees, not that late fees killed Blockbuster.

      1. I re-read the article and that’s not how I read it. Specifically

        Don’t they remember Blockbuster Video, the business that was built on ridiculous fees? Some say it went belly-up in 2013 because of changes in
        technology, but customers know better. They remember the “late” fees
        and “rewind” fees upon which the business appeared to build its profits

        I take it that to that the author is saying that the a dependence on late fees and rewind fees is what killed it. That the change in technology isn’t what killed it. That is of course absurd.

  3. Sounds like American was trying to slide a fee in under the radar and got caught. I bet American was trying to charge the “swipe fee” it has to pay for CC tranactions to the customer. In any case, I’ve never heard of any bank charging a “per charge” fee to its customers. I call B.S. on American Airlines. But I’m sure it will be MUCH better after the merger.

    1. Today is a very special day for American. It merges with US Airways, which is perhaps one of the most ill-advised airline mergers in recent memory. Read this as a cautionary tale. I’m sure we will be seeing many more in the months to come.

    2. Had a client who had this problem with a vendor we’ve used for years – turns out it WAS her bank – what a nightmare that was!

    3. I think it was just the pre-auth on the card, and the OP mistook it for an actual fee. As far as bank fees, some banks do charge an additional fee on certain transactions, and it does include the merchants name that the transaction was associated with.

  4. Try forgetting a ticket on Ryanair in Europe. Arrive at the gate sans boarding pass and prepare to cough up 15 Euros.

    Paper isn’t expensive, but I guess usage of their employees help is invaluable.

      1. I think that’s for Oxygen service for people who need supplemental oxygen. Most US carriers charge that now too, even if you bring your own. Unless of course its a fee for the oxygen masks that drop in the event the cabin depressurizes. 🙂

        1. I want to see a Rapping Ryanair Steward (Similar to Southwest).

          This is Flight X and We’re here to say.. Break out your Visas or Mastercards and get ready to pay. For if we a crash and you hear Mayday, the oxygen stops flowing to those that haven’t prepaid!

  5. Can’t think of anything new to say on the subject of junk fees that hasn’t been said before. But I have a simple explanation about the $1 charge.

    “After I asked American about the fee, it mysteriously disappeared.”

    Sounds like you were looking at the pending authorizations, and for some reason AA run through a $1 authorization to check the validity of the credit card, before running an authorization for the full amount of the booking. Then, a few days later the $1 authorization expired.

    Have no idea why AA would do something like that, but that’s the most likely explanation.

    1. I wonder if the traveler held the reservation with a credit card but didn’t pay immediately. I know you have 24 hours to change your mind when booking now, but I’m not clear on the details of how payment is collected/refunded on these types of reservations.

      If it is held with a credit card for a later charge, then I would expect the airline to validate the CC by running a $1 AUTH transaction. They don’t auth the full amount of the potential charge because these holds go against your credit limit (hotels and rental cars do auth the full estimated amount at check-in or rental, but not at reservation). An auth that’s not followed by a CAPTURE against the same transaction within the time limit set by the card issuer will disappear automatically, and that does sound like what happened here.

      1. AA has been doing that for years. AA runs a $1.00 charge to “purchase” the ticket, then a few hours later whenever its back office magic has been worked, the ticket is then “ticketed”. Nothing new here.

        Incidentally, AA doesn’t require a credit card to hold a ticket.

    2. You beat me to it. I was going to say the same thing. Its not just AA, many airlines, hotels, and on-line retailers run a $1 pending authorization in addition to the charge. Depending on the costumers credit card provider, it can last for a few days to a week or more, and then goes away.

      When I used to work in A/R, and some credit card companies started showing pending authorizations on-line, our calls spiked. “Why did you charge me an extra $1”. Why are there two charges (Some transactions were pre-authorized for $500). Part of me thinks its irresponsible of the credit providers to show these to consumers who do not understand them. I personally like seeing them, but I also understand the difference between a pre-auth, and a charge. Perhaps the card websites could offer an option where you check a box to see pre-authorized charges. In the OPs case, I suspect this is what happened.

      1. I noticed that rental car companies now authorize the amount of the rental + $500.
        Hotels are authorizing the expected cost of the room + $250.
        And they are asking for the maximum hold period on the funds.

        1. I wonder if the $500 is because that’s the most common deductible?

          A few times I have asked hotels to not allow any charges to be put on the room, and in those cases they have not pre-authed anything above the cost of the room. That’s always been when I have been paying for a certain relatives room. They burned me with room charges the first time it happened. I am willing to pay for the room, just not room service and spa treatments thank you very much.

          1. The hotels I’ve stay at generally authorize room rate plus $50-100 per night for incidentals. One hotel authorized room rate plus 200E per night. One a one week stay that was a a pretty penny to have tied up.

          2. That makes sense, the lower rate per night at least. 200E is very steep. I rarely even check anymore, just notice it if I happen to be checking my statement at the same time.

          3. It was either the Hilton in Florance or the Westin in Lido. Base rate was about 150e per night at both places

          4. Italy… Beautiful Country.. I’ll take a pass on the locals. I found them unfriendly!

            150E for Hotel and a 200E /Night incidental? Sheesh, more for the incidental fee than room itself.

  6. Chris: I think a better version of the name would be “junk micro-fees”. It’s the fees themselves that are tiny, not the junk part.

  7. To be fair, though, Governments do the same thing. They trumpet tax cuts, but then they replace them with fees that were higher than the tax cuts. I was away from my home on a trip last month, and when I returned and read my utilities bill and discovered that I had used zero water in the previous month, but there was a $12 charge as a minimum charge for water usage.

    1. That charge is for maintenance of the infrastructure. I assume you were still connected to the municipal water system while you were gone…

  8. Take an isolated $1 mistake, blow it up and call it a pervasive micro-junk-fee, and then claim these will proliferate in 2014.

    Not one iota of persuasion other than cynicism.

    1. In this case, the $1.00 wasn’t even a fee. Merely a perfectly legitimate pre-auth to ensure that the credit card was valid.

  9. Companies will continue this practice! Why? If I have to cross the continent or further I MUST fly. There is no real alternative. So the airlines will continue these “junk” fees. Same with hotels.
    As consumers we demand lower costs, the companies will keep lowering costs to stay competitive & keep adding “fees” to the new lower prices. An endless cycle & the average consumer thinks they’re getting a bargain – they’re not!

    1. I guess eventually the room itself will be free. You’ll just have to pay a mattress fee, a bedspread fee, a water fee, a towel fee, a carpet fee. And let’s not forget the coin-operated heater / AC unit.

  10. The $1 fee usually shows up in the “pre-approval” section of credit card online statements, as a way for the vendor to know the card is “real”. When the actual charge is processed, the $1 “authorization” drops off. This is very common, and most folks never know about it, unless they check their CC balances online, and regularly. All car rentals, most gas stations, etc., do the same thing; we just usually don’t know about it, because the $1 is NOT an actual charge.

  11. Until our esteemed government officials get nickle and dimed and squished into economy class, expect this abuse to continue.

    Chris, could you do some research and find out which congressmen/senators have airlines in their pockets? We could start an “education” campaign against them before the next election. Social media…it be a powerful thing…

    1. Policy makers only institute change when they’ve become inconveneienced. Good for goose, not for gander.

      Read a story about red light Cameras. Police are the worst at paying fines. A politician got one and cameras were removed. 🙂

  12. Do you remember when American bragged about the new legroom? Then a year or so later, it disappeared with no comment. I think industries that now depend on e-conversations are more likely to play games; in the past employees had to take the brunt from consumer anger, and might have given more immediate feedback to their companies

    1. I miss that time period, I flew AA almost exclusively then because regular economy had more leg room at no additional fee.

    2. I remember that extra 2-3 inches fondly. It disappeared because we consumers didn’t want to pay for it. AA removed one row of seats to make out traveling experience better and we still shopped by price. AA lost money on the deal. Customers didn’t reward AA, so the status quo returned. 100% on the customers.

  13. About charging for boarding passes …
    What if I’m traveling and have no access to a printer to print my boarding pass. All of my recent travel has not allowed me to print a boarding pass more than 24 hours in advance of my flight, so if I’m taking a two week trip, I can print my first boarding pass, but not the one for the return. Were I traveling on Allegiant it would appear that I would be paying a boarding pass fee for my return trip. Unfair and unethical.

    1. Most hotels I have stayed at recently were more than happy to print boarding passes for you at the front desk or provided no charge computer access for you to do the same.

      I recently was in Hawaii staying at a condo and had no printing capabilities. I went to the public library and was able to use their computer and printer for a total cost of 35 cents.

      I have also gone into Apple stores and printed there for free and they were not annoyed by it. (I did ask if the print function worked before trying.)

      There are options, maybe just not convenient ones.

    2. And, at least with Delta, you can have your boarding pass downloaded to an iPhone. The image will be scanned at TSA, boarding gate. No paper. Beats having to go to a hotel’s business center or front desk to use their printer.

      1. The reason I ask is that if you’re traveling, often you’re staying either with friends/family or at a hotel. Both are very likely to have computer and printer access on-site.

      2. Works on Droid phones, too. I always have both the paper version and the electronic version, whenever supported by the airport/airline – just in case.

        Who the heck is downvoting creative, helpful suggestions to avoid paying a true junk fee to the airlines for printing a boarding pass?

        1. In this case I think its Timothy. Rather than talking with us, he appears to be down voting everyone who disagrees. That’s my theory at least, since everyone has 1 down vote. I really want to hear his opinion on the comments.

          I think there are three types of standard disagreement responses on here. People who have a civil discussion over a disagreement. People who just down vote you if they disagree and never say a word. And people who keep arguing and using what you say against you even if its out of context, and when you even give them the benefit of the doubt they use it against you and continue to argue.

          Back on topic. One time I was at the airport and my phone flat out died. The battery didn’t die, the whole phone itself randomly died. Fortunately it was under warranty, but it couldn’t even be repaired, they had to give me a new one. The gate agent was very kind and printed a new boarding pass for me (he still required ID).

          1. Which is why I hold on to my paper copy, despite the eye-rolling it provokes from my technology-loving husband. It makes great scratch paper in a pinch, too!

          2. Or a bookmark. I don’t think I have a single book anywhere that doesn’t have a boarding pass jammed into it.

            As much as I want to use the electronic ones, I find paper faster. Phone sleeps, have to unlock phone, have to log back in, etc.

            Actually, since my nightmare in PIT, I like to have paper boarding passes too. I was changing planes in PIT (I was re-routed due to a cancellation). I had a very tight connection. I got to PIT, ran to my gate, tried to board, and the agent refused to let me board because there was no TSA stamp on my boarding pass. I told her this was for my second flight because I connected, she told me she needs to see the one for my original flight then, or I need to exit, and go back through TSA and get my boarding passed stamped. I showed her the first one and she wouldn’t accept it as it wasn’t stamped either, my stamped one was exchanged for the new one since I was re-routed. She said I had to go back out, and come back though TSA so she could verify I was screened. I told her I would miss my flight, and she said it wasn’t her problem, she can’t let me on the plane since I wasn’t screened. That’s when I pulled an old boarding pass out of my book, with the TSA stamp, and said, “Will this work?” She then thanked me and let me, said, “Now that wasn’t so hard, was it?” and let me board. That boarding pass was for a different flight on a different date. I just don’t get some of these power-trippy people and why they do things like this?

          3. “Down vote”…

            (he still required ID)
            Inserts argument: College ID? Library Card? Stamp Card to the local Subway? Drunk College Photo?

            Which ID do you mean. I’m so so confused and must argue.

            I had to chime in there.

    3. How is it unfair or unethical? You can choose another airline. When pricing, take the return print fee into account.

      You can also use mobile boarding passes, or find a printer in many many places. I have yet to find a hotel, even a cheap one, that won’t print my boarding pass. I ask at the front desk when they dont’ have a business center.

    4. Be sure to carry a USB thumb drive. You can print/save the PDF file from your notebook onto it, then LOCK the thumb drive to read-only (virus protection), then present that to a local hotel/shop and get the pass printed out.

  14. I missed the part about the $1.00 charge. The likelihood of American Airlines testing a $1,00 is infinitesimal. The reasons are numerous. The biggest one is that American, unlike a carrier like Spirit, caters to business customers. A credit card charge would be anathema to such a clientele base. Credit card transactions are a staple of American business.

    1. It was the authorization of the account valid check transaction that did not settle and expired, not an actual charge for $1. If it would have been an actual charge, there would have been an offsetting reversal from AA instead of the item just disappearing. Happens all the time.

      Before we had instant internet access to our credit card info online, we never noticed these types of items because they disappeared before the monthly statement was printed and the credit card companies never included any outstanding ones. You would simply see it in an available balance that was less than the credit line minus the total due.

  15. It started way back when when local governments tacked on “local” taxes to car rental bills, hotel bills, etc. It pisses me off no end to get my hotel bill and find an additional $20 tacked onto my bill for the privilege of staying in a hotel room in your city. Then I had the audacity to move to Kentucky and find that the state charges a tax on my homeowners/auto policy. Really? I’m being a responsible citizen by buying insurance and you tax me for it? Not to mention the fact that I have to buy at least liability insurance on my cars and I’m taxed on it. Pretty soon everything is just going to be a tax or a “convenience” fee!

  16. My mother lost her 4 year old cell phone. She’s on my Verizon account so I just ordered her a new one. It’s a basic model (she only uses it for emergencies) and has fewer features than the one she lost – no call waiting or 3 way calling. Verizon charged a $30 upgrade fee!!!? I don’t understand the logic and don’t know how to complain – waste time calling a poor customer service person?

    1. Stand up for yourself… and your mom. Go to the top of this page, click the “Company Contacts” link, locate Verizon, then start sending emails. It’s as simple as that. Good luck!

  17. What I want to know is who are the six Pollyannas that believe there won’t be more junk fees in 2014. Will there be beans in Boston, country music in Nashville, and gambling in Las Vegas? Same odds that there won’t be more fees.

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