That’s the surprise fee Karin Melick-Barthelmess saw on her bill for an American Airlines flight from St. Louis to New York. It was listed as an “American Airlines Internet surcharge,” she says.
One dollar may not sound like a lot, but when American businesses in general — and travel companies in particular — build their entire ventures on fees like that, it is a big deal. (American raked in $266 million in ticket change fees and $255 million in baggage fees during the first half of 2013. It’s on track to collect more than $1 billion in fees for the year, with most of them coming in a few dollars at a time.)
Here’s my prediction for 2014: more nonsense fees.
But they’re going to be smaller than ever, in increments you hardly notice. They belong to a subset of junk fees I call microjunk fees. They’re $5 or less, an amount that even the most price-sensitive customer sometimes fails to notice. But add them all up and they can turn a money-losing business into a profitable operation.
For example, starting May 1, discount airline Allegiant will charge a $5 per “boarding pass fee” to passengers who choose to have a mandatory boarding pass printed out at select domestic airport locations. Wow, is paper really that expensive? Spirit Airlines, one of the most innovative companies when it comes to fees, is considering a sliding scale for its fees next year, presumably so that when customers have second thoughts about the extras, it can shrink them until they don’t hurt at all. Tricky.
Underestimating their own customers
Are we that dumb? No, but we’re suffering from a collective fee fatigue, and the businesses imposing these unethical extras know we’re far less likely to fight a $1 or $2 fee. When we protest, they either quickly agree to remove them or explain that these fees enable them to offer the lowest fares and give customers a “choice.” Which, of course, is hogwash.
A better question is: Are they that dumb?
Don’t they remember Blockbuster Video, the business that was built on ridiculous fees? Some say it went belly-up in 2013 because of changes in technology, but customers know better. They remember the “late” fees and “rewind” fees upon which the business appeared to build its profits.
Blockbuster may have been done in by one $40 late fee in particular, which it charged to a young customer named Reed Hastings in 1997. Name ring a bell? Yeah, he founded Netflix.
Companies that charge microjunk fees are playing a dangerous game by dismissing their customers as dummies, and they’re failing to learn from the failed businesses of the past. You deserve better.
Remain vigilant in 2014
You have to keep a watchful eye for these ridiculous fees, which are often added to your bill with little notification or justification. Melick-Barthelmess didn’t tolerate her fee, immediately contacting me to find out if I could help her.
“Is that the way of the future?” she asked.