Have you ever tried to buy a product and been confused or outraged by ambiguous charges that the seller tacked on at the last second, such as a “service fee” or a “convenience fee”?
If so, you are in good company. In the highest-profile example, Taylor Swift fans were rightfully angry at the excessive cost of tickets for her “Eras Tour” this year. Indeed, according to one study, so-called “junk fees” like those we’re describing add 20 percent to the total cost consumers pay for concert tickets. But the same problem exists all over the economy and across a host of industries and products, including hotel rooms, rental cars, airplane tickets and rental housing, to name just a few. Junk fees collectively cost consumers billions of dollars per year.
Corporations want to normalize these fees, but they’re not normal or necessary. That’s why we’ve introduced legislation in our respective states — Pennsylvania and North Carolina — to do away with them. State leaders have the power to protect their constituents from junk fees, and we intend to do just that.
Our bills would prevent corporations from using a variety of tactics to hide the true price of their products to nickel and dime working families. For example, they would bar what’s known as “drip pricing,” which is when one price is displayed for a product, but another is charged at checkout after the addition of charges that don’t correspond to any additional service. Think of the ubiquitous “processing” and “convenience” fees you see at checkout, which many corporations levy but don’t give you any additional processes or convenience to enjoy.
Corporations charge junk fees simply because they can, knowing that most buyers have busy lives and won’t abandon a purchase at the last moment, because that means starting all over to find the service somewhere else. Indeed, many sectors are so flooded with junk fees, they’ll likely be hit with a similar fee at the next place anyway.
Under our legislation, the price you see when you click on a product or make a reservation would be the price you pay at the end of the transaction. Period. That rule would also apply to advertising. Corporations would no longer be allowed to advertise one price, then raise it on the back end through a host of fees.
Our bills align with President Biden’s efforts, announced in the 2023 State of the Union address, to have the federal government eliminate junk fees wherever it can. “It’s about basic fairness,” Biden has said. “Folks are tired of being played for suckers.”
The president is right, and we’re ready to take on that fight at the state level, along with young, diverse and bipartisan leaders from across the country. The polls show that voters are with us: Banning junk fees is consistently revealed as very popular across the political spectrum. Voters understand when they are being taken advantage of in the market, and they want their leaders to stop it.
But our bills are not only about protecting consumers from being ripped off. They’re also about protecting small, local businesses from anticompetitive tactics, and ensuring fair competition across the economy.
After all, competitive markets depend on fair and transparent pricing. If corporations are gaining an advantage in the marketplace through deceptively pretending to charge one price while really charging another, that’s unfair to everyone, including their competitors. It creates a race to the bottom in which companies compete over who can most effectively trick customers, as opposed to who can create better products at lower prices. And it pressures honest businesses that don’t want to charge junk fees to do so anyway, lest they look artificially more expensive than their competitors.
Restoring fair, transparent pricing across the economy will not only be good for business, it will also result in lower prices for consumers. It will allow for true comparison shopping, making corporations compete for who sells the best product at the lowest cost, not on who can most effectively dupe consumers or who can come up with the latest ridiculously named fee. We urge our respective legislatures to take up and pass these bills, for the good of everyone. Our voters and local businesses will thank us for it.
Rep. Nick Pisciottano represents District 38 in the Pennsylvania House of Representatives.
Rep. Tim Longest represents District 34 in the North Carolina House of Representatives.