Alongside inflation and rising oil costs, American consumers are also facing a surge in added fees from businesses and are growing increasingly frustrated.
New research highlights growing frustration among American consumers over hidden fees and surcharges, as companies pass on rising costs while citing outside pressures.
“I consider myself a savvy consumer,” said Corey Andrews, 32, a laid-off market strategist in Denver who tries to avoid additional fees in his day-to-day life. “But when everything goes up, you run out of levers.”
While many consumers begrudgingly accept the fees due to rising costs such as fuel, Andrews argues that the current wave isn’t as justified or temporary as companies suggest.
“If jet fuel goes back down, the baggage fees won’t,” he said, pointing to recent price hikes across major U.S. airlines.
As a result, Andrews adjusted his habits in response by avoiding restaurants with added service charges, skipping fee-heavy delivery apps, bundling purchases to dodge shipping costs, and using credit cards with travel perks to offset baggage fees.
“COVID kind of opened the floodgates,” said Ben Weinhart, a 27-year-old accountant in Cincinnati, citing the rise in surcharges during the pandemic that never returned to prepandemic levels. “I feel like I need to be my own detective.”
Vicki Morwitz of Columbia University describes it as a “lock-in effect,” in which shoppers are less likely to abandon a purchase once fees appear at checkout—frustrating them, but rarely changing their behavior.
“The next time I come back, I’m still drawn in by that initial low price,” Morwitz said. “Even if I may have felt tricked the first time.”
“If it’s temporary, people are mostly OK with it,” he said. “The problem is when it never goes away.”
Companies often favor surcharges over price hikes because they shift blame to external factors. Labeling a fee a “fuel surcharge,” for example, makes it seem tied to rising costs rather than profit margins, said Rebecca Hamilton of Georgetown University. Research shows consumers are more accepting when increases are framed this way, viewing them as more legitimate than direct price hikes, even if the end cost is the same.
“We all see it every day passing by the gas station,” said Michael Weber, a finance professor at Purdue University.
Weinhart said one of the best parts of his trip to Europe was the all-inclusive pricing.
“The price was just the price,” he said, adding that he’d gladly pay more to avoid hidden last-minute fees. “It’s exhausting to have to be so aware all the time.”
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Source: Black Enterprise
