It’s not something you, the consumer, would track on a daily basis, but “gotchas” make us crazy here at ConsumerAffairs.
Our favorite table talk firecrackers at the moment are all the little hidden fees and dark patterns that companies are linking to online purchases – and, yes, we’ve gotten bitten by these things, too.
Recently, we wrote about Toast’s 99-cent processing fee that it decided to sneak into online orders at more than 80,000 restaurants. Thankfully, the company came to its senses earlier this week and that bright idea is now… well, toast!
The company’s plan created so much bad blood for both its restaurant partners and their customers, that it decided “mea culpa” was the only thing it should be putting on its receipts.
But Toast isn't alone. Regulators have gone after Marriott, and Airbnb. Consumer reviewers have found with similar issues with other seemingly reputable companies like Dollar Rent-a-Car, Hilton Grand Vacations, and GM Financial.
Those tricks are multiplying like rabbits, too, as ConsumerAffairs found out. We asked consumer finance experts to help us enlighten our readers about the new angles being played out.
Consumer hocus pocus
“The world of hidden fees is like a magician's hat, always full of surprises. One such trick that's been gaining traction is the 'convenience fee',” James Allen, CPA, CFP, CFEI, and Founder of Billpin.com, told ConsumerAffairs. “It's a clever way to pass on the cost of processing payments to the consumer while appearing to offer a service.”
Allen says that the newest hidden fees trick is the “inactivity fee.” Companies, particularly in the financial sector, are now charging this fee for inactive accounts. ”It's a bit like a restaurant charging you for not eating their food,” Allen said.
The best way to sniff out a hidden fee is to read the fine print, but no one really wants to take on that task, do they? Allen says that one surefire way to get through all the minutia is to call the company directly and ask questions specifically about each and every fee that you’ll be charged.
Yep, no one should have to go that far, but he reminds consumers that companies are legally required to disclose all fees, so you shouldn’t be shy about seeking clarification.
Companies love – L-O-V-E – subscriptions. Do you think a fitness club is worried that you didn’t show up at their gym for a month or two when they’ve got you on the hook for a recurring $10-a-month charge?
Or a newspaper is sweating out the fact that you haven’t looked at its online edition in a while? Nope. All they want is what you may consider chump change, but they value a consistent little revenue stream that takes no effort to produce.
Michele Paiva with TheFinanceTherapist.com told ConsumerAffairs that the most disturbing junk fee in the subscription world is the cancellation fee it takes to get off of those hamster wheels.
“It costs absolutely zero to cancel on an app, but some apps and other companies create a cancellation fee. Essentially it is a tactic to deter canceling,” Paiva said. “I had a client who was a popular weight loss program member with an app. We were working on negating extra costs and fees; she was charged $35 to cancel a $ 25-a-month app! That was a $60 fee for her to close out the app.”
Renters need to be aware of the “January” fee
Fees such as "January fees" or rental application fees are just some of the fees that are starting to be talked about more frequently by renters. Sebastian Jania at Manitoba Property Buyers, said they’re called “January fees” because some property management companies and landlords charge at the beginning of the year - usually without much explanation or reasoning. This does not apply to every landlord or property manager.
“I could add things such as mail sorting fees and amenity-related fees,” Jania told ConsumerAffairs. “In many cases building owners or management companies have seen their costs go up so much due to inflation that without notice they have sometimes passed these on to consumers/tenants,” he said.
Jania says this fee slight-of-hand happens a lot on digital applications, so take note.
“Consumers really need to take time to read the fine print rather than go with our inherent laziness to just accept the terms. A lot of money can be saved if one can ask about those fees and even ask to have them removed as many companies simply hide them hoping that people won't notice them,” he said.
Delivery fees can be even more painful
Delivery is a tricky area for hidden fees – a swamp that third-party delivery apps are filling up with fees that can double or triple the price of an order.
Kevin Bryla, the chief marketing officer and head of Customer Experience at SpotOn, suggests that when ordering a food delivery, try to order directly from the restaurant as often as you can.
“This will minimize added fees from third-party delivery apps. It's also beneficial for restaurants, as delivery apps can take up to 30% of a restaurant's sales. You can also opt to carry out your order instead of getting it delivered, which will remove any added delivery fees,” he said.
Are there apps to monitor fees?
Allen reminds consumers that the more you know, the less likely you are to be caught off guard. But if reading fine print or going all CSI isn’t your thing, Allen says there are apps that can help consumers track and manage fees:
Recoup: “This app is designed to help users get bank fees and missed rebates back. It also helps to find sneaky subscriptions,” Allen said.
Harvest by Acorns: This app’s intention supposedly is to help people negotiate bank and credit card fees, track their income and expenditures, and even automate savings.
Rocket Money: Formerly known as Truebill, this app helps users manage subscriptions and bills. It tracks subscriptions and cancels them when needed.
Snoop App: Users can keep track of spending across multiple accounts, create budgets, and receive alerts about upcoming bills with this app. Detects unexpected fees as well.