semyendow: The High Price of Add-on Online Fees

Tuesday, 27 December 2011

The High Price of Add-on Online Fees

New rules will go into effect in a month for US airline advertising that take the emphasis off the asterisk and adds transparency to their add-on ticketing fees. Ironically, some of the low-fare airlines such as Spirit are fighting the changes, claiming freedom of speech infringement by the government. I guess the right to deceive their customers should be part of the Constitution, or at least left to free enterprise to sort this all out.

The rules were supposed to go in effect earlier this fall, but were extended to January 24th to give the airlines time to legally outmaneuver them. I mean, to comply.

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It used to be that one went online to avoid add-on fees by travel agents, but as the airlines have made visits to bankruptcy courts more frequent (American is the most recent), they have come up with a variety of ways to squeeze more money out of the public without being so, well, obvious and clear. There are baggage fees, fees for using particular forms of payment, and fees for sitting in those extra-spacious exit row seats. Buying a ticket online is now akin to buying a computer from Dell: there are so many screens to click on to avoid various up-sells (rental cars? hotels? a new printer cartridge, maybe?), that the process is a user experience nightmare.

But the fee asterisk and its associated add-ons are onerous. Spirit, for example, charges all sorts of fees depending on the ticket. They claim the online booking fees are "optional" since you can avoid them by going to the airport and buying your tickets there. Right. As if we don't spend enough time waiting in airport lines. You can read their fine print here and it will take you a while. Here is a screenshot showing you that a $164 round-trip ticket would cost you an additional $62 in fees.

Granted, they aren't alone in charging high fees for online purchases. Many of these are local and other taxes that the hospitality industry has to bear. But the objection is how the consumer is informed of them during the online purchase process. Spirit doesn't divulge all the fees until you have selected your flights and are getting ready to pay them, which is understandable given the many nuances of its complex fee structure. But that is still reprehensible, from an airline that advertises $9 fares that turn into something quite a bit more.

As another example, two tickets for Book of the Mormon, the popular Broadway show, can have almost as much in add-ons as Spirit does. The site Broadway.com is at least a bit more upfront about what they charge you, as you can see here at right.

Easyjet, the European low-fare airline, has different ticketing prices depending on the way you pay. "All bookings will incur a �8.00 booking fee except for bookings made by Visa electron (a debit card that isn't available in the US and Canada) which is free." Then you are presented at checkout with this somewhat confusing screen at left.

So the biggest number on the page is the fee that you would pay with a regular credit card, that includes the surcharge. Got it? This is a user experience nightmare.

Concert tickets for years have had high add-on fees, but at least the online concert ticket booking sites are more up-front about them. Still, two tickets for an upcoming show of George Strait for example that started out costing $80 a piece add $13 for various fees at Ticketmaster, more if you want them mailed quickly to you.

That is still less of a proportion than what the airlines add on.

Some thoughts for the future to improve the experience:

Limit the upsells. I shouldn't have to click through more screens to decline offers at checkout than it took to buy the original item.
Disclose the fees at the beginning rather than at the end of the purchase process.
Simplify, as Thoreau once said. If you need to explain your fees with an asterisk, it is time to get rid of both.
Keep them below 10% of the total price. Otherwise it isn't really a fee, it is just generating more revenue.
Make it easy to find the fees. At least Spirit posts them on their site in plain sight.