That fee was so that we wouldn’t have to raise our prices


I dreamed that I got screwed by Ticketmaster. I was relieved when I woke up and found out it was only a dream.

Bonus chatter: The economics of Ticketmaster.

It reminds me of a company who added a service fee to an existing rate plan, and in their FAQ for the service fee, they explained, "That fee was so that we wouldn't have to raise our prices." This is some sort of bizarro-world logic.

Yes, I know that this is so that the company can continue to advertise an artifically low "price" in all their marketing materials, and then make up the difference by tacking on a boatload of fees.

A colleague of mine was purchasing event tickets online, and in addition to the ticket's face value, there was a processing fee, a facility fee, and an order fee. On top of that, it said, "Total does not include shipping and handling or order processing fees." Because apparently an order processing fee is not the same as a processing fee and an order fee.

Eventually, they will also add a convenience fee, a 9/11 surcharge, a mandatory gratuity, a fee fee, and a fee collection fee.

Comments (18)
  1. Yuri says:

    All fees sold separately.

  2. Marc K says:

    That wasn't a dream.  It was a repressed memory!  

  3. j b says:

    Norwegian marketing laws require that all fees added to the sales price must be tied to a well defined and real extra cost, which the customer must have an option to avoid. If you run a mail order store and add shipping costs, then you must allow the customer to come to your storehouse to pick up the goods without paying any shipping costs. Furthermore, shipping costs must be "real" – they cannot exceed the postage (or similar) actually paid to a third party. "Unspecified" costs that cannot be ascribed to one specific payout, such as "handling charge" is not allowed; that must be included in the nominal product price.

    Web and mail order stores will of course still try to fool you. So some of the them state the nominal price as "xxx + shipping", to stay within the law, and they do get away with it. At least you will immediately see that the nominal price (without shipping) is not real. Still, they must provide some way for you to pick up the product without paying the shipping, but even if they limit that to, say from 12:00 to 12:15 every second Friday, and you must announce your arrival 24h in advance, they will get away with it.

    Yet, after the regulations were made stricter, most serious web/mail order shops have come much closer to stating the "real" price in their ads. The main reason why they sometimes use this "+ shipping" is to provide alternate shipping options (including free self-pickup). But I guess that strict regulations is not in according with the true American spirit of freedom… :-)

  4. dave says:

    When you're buying a ticket online, what actually gets "handled" ?

  5. Brian_EE says:

    @Dave: 1) Servers that handle and store the transaction cost money. 2) The electricity to run those servers costs money. 3) The datacenter where the servers reside charge for the rack space. 4) The internet connection to those servers costs money. 4) The people employed to manage the servers and all the application infrastructure earn paychecks. 5) The investors in the company expect profitability.

    Those are the main items I can think of in 30 seconds…

  6. Roger Lipscombe says:

    It's when they charge printing fees for e-tickets that I'm printing on my equipment…

  7. Antonio 'Grijan' says:

    The first paragraph was the dream. The rest of the post, the nightmare. Sadly, this is becoming all too frequent. A bus company I frequently travel with uses the same strategy, and fees can sum up to 25% of the whole. The overregulators at Brussels should put an end to this silliness, but I think I'll wait seated down.

  8. dave says:

    @Brian EE

    Only #1 is actually 'handling'.  The rest is just the cost of doing business, or, if you like, the 'processing' fee.

    But my point was mainly a complaint about the underhandedness. They use all that equipment to *reduce* their cost of business (as compared to, say, moving paper tickets around to bricks-and-mortar outlets) and then charge me extra for saving them money.  I understand they may need to charge more than the cost of the seat, but I don't understand (well, I do really: it's the desire to disguise how much they're asking) why they don't just charge a single fee for that.

  9. Two examples come readily to mind:

    1. Some well known (at least in Europe) low-cost Irish airline. At least in the past, their prices in the "flight search" results were complete BS, with every following page in the "checkout wizard" adding some fees (also, in every page they try to sell you anything, ranging from a limousine taking you up at the airport to a complete stoves set)

    2. Gasoline in Italy. We have the best fees ever; over the "actual" industrial price, you have to add

       – several historical "accise", in particular:

          · 0.001 euro: Abissinian War (1935);

          · 0.007 euro: Suez crisis (1956);

          · 0.005 euro: Vajont disaster (1963);

          · 0.005 euro: Florence flood (1966);

          · 0.005 euro: Belice's earthquake (1968);

          · 0.051 euro: Friuli's earthquake (1976);

          · 0.039 euro: Irpinia's earthquake (1980);

          · 0.106 euro: mission in Lebanon (1983);

          · 0.011 euro: mission in Bosnia (1996);

          · 0.020 euro: contract renewal for train and bus workers (2004);

          · 0.0071-0.0055 euro: cultural funding (2011);

          · 0.040 euro: immigrants emergency for Libia's crisis (2011).

          (They sum up to 0,26 euro)

       – *other* accise (0,704 for gasoline, 0,593 for automotive diesel)

       – *yet some other* accise (on a regional basis)

       – IVA (the Italian VAT), currently at 22%, paid on the already taxed price – IOW, you are paying tax over taxes

       It's no wonder that currently gasoline goes by ~1,60 euro/liter (~8,34 $/gallon)

  10. Engywuck says:

    that's why here all credit offers have to show "effective annual" interest rates. Some money lenders had really low interest rates, but then added "handling fees" for every pay you did on it, "acquisition fee" at the beginning, etc. They still have all those, but now they have to calculate them in for the advertised rate.

  11. GWO says:

    @BrianEE : But all those things are the standard costs of being in their line of business. It's like a supermarket quoting one price for a pint of milk, but then adding a extra fees for shelving, restocking, transport and refrigeration.

    They're not fees, they're costs and you're supposed to price your goods so as to cover them.

  12. Steve says:

    @GWO and others – I really can't believe that I'm about to defend TicketMaster and the like, but here goes …

    Your favourite band are playing at a hall near you, and the face value price of the tickets is 50 UKP. That 50 UKP goes to the tour management/promotion company, who use the money they get from all those 50 UKPs per ticket to pay for the hall, the transportation between venues, equipment hire, etc etc etc, and who knows maybe somewhere near the bottom of the list the actual musicians and performers might get paid too.

    Ticketmaster don't get any of that 50 UKP. So if you accept the basic premise that some organisation such as Ticketmaster have an intermediary role in the desirable transaction of you being able to buy tickets for the event; and that organisation needs to run a transactional website, and substantial IT infrastructure to support that website, and a bunch of premium rate phone numbers for when it's 48 hours before the concert and your tickets still haven't arrived, and all that … they need to make their money somewhere. So the booking fee comes into play. In that sense they are a fee, because you are paying Ticketmaster a sum of money to take care of a transaction that otherwise you'd have to undertake in person by queuing outside the venue (even if that option still actually exists for concerts these days). Whether they are a fee you or I consider fair and reasonable is a separate discussion …

  13. Steve says:

    Is Raymond prescient? British consumer association Which have chosen today to launch a report about ticketing prices!

    http://www.theguardian.com/…/gig-theatre-tickets-hidden-charges-which-campaign

  14. dave says:

    re Steve:

    Sure, so I'd accept seeing:

     Cost of seat: 50 UKL

     Processing/handling fee: X UKL

     TOTAL: 50+X UKL

    It's the several separately-quoted and factually-overlapping fees that make it appear deceptive. Especially in the case where the delivery of the tickets is an HTTP response.

    [I'd go even further. It should just read "Ticket: 50+X GBP." If TicketMaster is not the exclusive vendor for tickets (rare), they can add "(50 GBP base price + X GBP service fee)". In the U.S. at least, when you search for airplane tickets, the value shown to you is the total after all fees are included. If you care to see the breakdown into base price and fees, you can click for more details. -Raymond]
  15. Gabe says:

    As impressive as it is that Italians still have to pay an excise tax for the Abissinian War, they still have a couple decades to go to beat the US record of 108 years. The 3% excise tax on long distance phone calls created in 1898 to pay for the Spanish-American War wasn't repealed until 2006!

  16. Engywuck says:

    re Steve: nearly every other vendor manages quite fine with an "all-included" price. Say cinemas: they have to pay the studio a price for every viewer, but you don't see a "4 Euro" (or whatever) price with added costs for selling you a ticket, providing room to view it, seats in the room, toilet facilities, not having ads in the middle of the movie, … Instead they sell you a ticket for 8 Euros and that's it.

  17. jonwil says:

    Here in Australia they passed laws requiring "all inclusive" prices and preventing companies from listing things and then listing all sorts of extra fees on top of it.

  18. Gabe says:

    I recall almost 20 years ago the band Pearl Jam attempted to have a US concert tour without involving Ticketmaster because they wanted to keep ticket prices down. I don't think they were successful, though. Does anybody remember how that went?

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