Bad Money After Good?


FeesChargesWe’ve all heard the thing about not throwing good money after bad, but what about not throwing bad money after good? And what if there’s no choice?

There’s little doubting the ease and efficiency inherent in online shopping. Whether groceries, car insurance, bank accounts, clothes, music, homewares, collectibles or items of a more personal or intimate nature, there’s virtually no end to the list of what we can get our grubby little mitts on, having expended little more effort than a couple of swipes, taps, touches or clicks and all from the comfort of just about anywhere.

There can be just as little doubting the perceived risks and obvious downsides of online shopping: deliveries tampered with or lost, personal or financial details compromised, wrong items or wrong sizes received – and even if it’s not really the case, exchanges by mail always seem a whole lot less convenient than just walking back into a shop.

But none of these is the most insidious element of online shopping. That title goes to fees.

Fees are often the most mysterious, vague and difficult to justify ingredient of the entire online purchase process and the worst one of all is the ubiquitous “service/delivery fee”. Precisely what a “service/delivery fee” is actually for is something I’ve never really understood, particularly given that many online purchase processes are now almost entirely automated and with only a smattering of human involvement, if any at all.

So what kind of “service/delivery fee” should I reasonably expect to be charged if nothing’s actually being physically delivered to me, nor has any service been provided other than what was needed to complete the transaction? How does this so-called “service/delivery fee” stack up in the context of, for example, shopping online for tickets to a show or concert? A brief Q&A paints a pretty clear picture:

  • Q: Can I always elect to buy tickets online? A: Yes, almost without exception.
  • Q: Do I always expect to pay a fee to have said tickets issued to me? A: Again, yes, almost without exception.
  • Q: Can I always elect to receive my tickets via email or some other digital means? A: No.
  • Q: Should I expect to pay somewhere between “less than for a paper ticket” and “nothing at all” for an online or digital ticket delivery option? A: Unless I wish to brook disappointment, it’s probably best not to entertain such lofty expectations.

And if the last two points seem a bit difficult to believe, look no further than the image below – proof, if any were needed, that it’s still entirely possible to buy tickets online without the option of online delivery. It’s a tad difficult to fathom in 2015.ServiceDeliveryFee

But even when a so-called eTicket option is offered, at best it might see a marginal reduction of the “service/delivery fee”, though often all delivery options – physical or not – attract exactly the same fee. The deeper you dig, the clearer the inequity becomes.

For example, can I buy show tickets online and choose not to have any ticket of any kind issued to me in any way? No, of course I can’t. Obviously I need something to show at the venue on the night if I actually want to get in. So if there’s no way of me attending the event for which I’m purchasing the ticket without said ticket, how can Ticketek and Ticketmaster justify charging a fee to give it to me? For my transaction to be considered complete, receiving my ticket clearly isn’t optional, so I’m left scratching my head. This just doesn’t add up.

These days, most organisations have diverted their customers online for practically everything, ostensibly in a bid to reduce overheads and other costs. Anachronistically, however, the Ticketmasters and Ticketeks of the world seem content to continue preying on the public’s insatiable appetite for entertainment, while offering almost no incentive for showgoers to avoid overhead-laden purchase options.

Maybe it’s time our friendly ticket vendors started naming their “Service/Delivery Fee” for what it really is – a convenience fee.

Quite how any service provider (without its tongue firmly planted in its cheek) can justify charging $8 for a PDF document that’s automatically generated and sent by email without any human intervention is, at best, a mystery and, at worst, a clear example of how the event ticketing industry continues to thumb its corporate nose at every single one of its customers.

Let’s not forget that Ticketek and Ticketmaster have already been taken to task multiple times about this stuff. Between 2009 and 2012 both were heavily and loudly criticised by consumer media for excessive fees, lack of information and for complex and non-transparent pricing. Ticketek was also fined $2.5 million by the Australian Competition and Consumer Commission (ACCC) for “misusing its market power”. Yet both organisations flourish, despite continuing to show such obvious contempt for their customers.

By way of comparison, $8 also gets me a physical copy of a glossy monthly magazine, printed, bound and distributed monthly to newsagents all over the country; or an adult-sized fast food meal, made to order by human hands; or a peak rail fare for the 160km journey from Sydney to Newcastle; or four-and-a-half loaves of supermarket-brand bread or about five-and-a-half litres of E10 petrol… you get the picture. 

So what it comes down to is that I use my internet connection and my data to purchase my ticket, then have to pay the same amount I’d spend on a magazine, some bad food, a long train ride, enough bread to make 100 sandwiches, or a splash of petrol just so I can download a picture of my eTicket using my mobile phone or print the thing out on my paper using my printer ink… something still isn’t adding up here!

Imagine going into a shop, paying for what you want and then being charged an additional fee for the shop assistant to actually hand over your goods? Or paying for a flight and being charged extra for a seat, despite it being mandatory to be allocated a seat and to be seated at specific times during any given flight. Surely, both of these are utterly ludicrous and could never actually happen… right? But neither of them is so very different to being charged for a ticket that, one way or another, you must be given.

I mean, even the banks manage to get around it by only charging ATM fees for using other banks’ machines. Even the banks! Even the former public enemy #1 where hidden and/or exorbitant fees were concerned! Eventually they saw (or were shown) the light and transactions like ATM withdrawals now have a significant edge over transactions like online ticket purchases for one key reason: the banks allow us to make a conscious choice to either accept fees or avoid them. 

Banks and their customers have hardly looked back ever since the current arrangement came into being; meanwhile, for some reason the near duopoly of Ticketek and Ticketmaster still don’t seem to feel their customers need any choice at all.

But don’t get me wrong – while they may not yet be charging us extra for a seat, the airlines are just as bad, if not worse, than event ticketers. More often than not, airlines are hands down the worst offenders where it comes to hidden costs, unclear fees, whopping great surcharges and a lack of choice. At least some of them now offer customers a way to avoid surcharges for online purchases by offering a fee-free alternative, although given it relies on a bank-to-bank transfer from a debit account, it isn’t the answer for all travellers.

Recently I was sucked in by Jetstar’s ‘Take A Friend for FREE’ promotion. $105 for not one, but two tickets all the way to the other end of the country – how could I resist? Having flown Jetstar many times, I knew precisely what trickery to expect from their online booking process – too many clicks, endless counter-intuitive screens, and text dressed up to look like a standard choice when in fact it’s a pre-selected extra-cost option – for my convenience, you understand. It’s all right there, hidden in plain sight.

To see what I’d potentially be up for if I hadn’t been prepared or wasn’t paying attention, I walked through the full online booking form without avoiding any of the optional bits they up-sold, nor removing anything they’d added in or turned on for my convenience: 2 flights, a Service/Booking Fee, a $17.50 fee (!) for paying with a MasterCard, a ‘Max’ bundle for two people, 20kg of checked baggage per person there and back, SMS itineraries, Jetstar Club membership for two, a pre-purchased meal for two both ways, an in-flight purchase voucher per person both ways, a per person entertainment card both ways, a per person pre-selected seat per flight, Travel Insurance for two people, pre-purchase airport parking (costing more than the alleged price of the flight) and a fee to “Hold This Fare” for 96 hours… all for the grand total of $1,221.70!

$1,221.70 for a $105 flight.

All the asterisks and small print in the world won’t make a purposefully deceptive online process any clearer. Nor do they justify forcing prospective customers to concentrate way harder than they should have to, just to ensure they don’t pay for anything they don’t need.

The good news doesn’t end there, either. If you let Jetstar known that you accidentally selected the wrong date (probably while you were focussed on avoiding all that other crap) they’ll allow you to change it… then charge you $80 for the privilege, plus any difference between the price you paid at the time and the current price for the same fare. Even if you let them know within 60 minutes of making the booking and even if that booking’s for a flight that’s more than four months away, they’ll still hit you up for another $80, just so someone in their call centre – who openly acknowledges that it’s an awful fee to have to impose but that their system doesn’t allow them not to – can press a couple of buttons to change the date to the following week. 

If I was requesting such a change the day before the erroneously booked flight, I might expect to be charged something. But four months in advance and less than an hour after I accidentally took that one seat on that one flight out of circulation? It’s not like Jetstar will struggle to re-sell that seat (to someone else who doesn’t realize they just paid for the privilege of choosing a seat they didn’t know they were choosing), is it? It’s just another massive airline piss-take.

And while we’re on the topic – a $17.50 fee for using Mastercard… WTF? Merchants (i.e. Jetstar) are generally charged around 0.4% of the transaction value by the scheme (i.e. Mastercard) to process payments. In the case of my $105 ticket plus $8.50 booking fee and no other optional extras whatsoever despite Jetstar’s best efforts, the scheme fee levied against Jetstar would’ve been less than 50 cents. So what, exactly, is the other $17 for, Jetstar? Go on, put some spin on your 4,000% mark-up, I’m dying to hear the explanation!

Of course, it’s all our own fault in the end. As long as we keep buying tickets and flights online and keep copping these outrageous fees and charges without question, they’ll just keep charging them, won’t they? In the age of ‘user pays’, we’ve become our own worst enemy.

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