That’s some blockbuster! Movie theater charges 50-cent “service fee” on ticket

By | July 20th, 2016

Just when you thought you’d seen it all, along comes another business with another absurd fee.

Consider what happened to Michael Pennock, who was visiting Southern California last weekend. He decided to catch the latest Ghostbusters sequel at Pacific Theater Lakewood near Long Beach, Calif.

The price for his matinee ticket: $9.

Then he arrived at the ticket booth.

“At the window I was told it was $9.50,” he said.

Huh?

Pennock asked a theater employee, who said, “Oh, the ticket is $9 and the 50 cents is the service fee.”

“It covers things like handling credit cards and other back-office expenses,” the employee explained. “We separate this out so the consumer can see what pays for what.”

That didn’t sit well with Pennock.

“I pointed out that neither the chain nor the theater mentioned a service fee anywhere online that I could see,” he says.

Not true, the employee replied. “We post it on the marquee.”

Pennock thinks it’s a hidden fee, similar to the hotel resort fees spreading like a virus across the country.

I contacted the theater to get details on the fee, and what it covers. No one has responded.

“Fifty cents isn’t a huge amount,” admits Pennock. “I suggested they just roll that into the ticket price. After all, it’s just the cost of doing business for all other theaters that don’t tack on a service fee to try to make the ticket look cheaper than what they really charge.”

But I wondered: Are movie theaters about to take a page from the hotel industry playbook of dishonesty? Perhaps.

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For example, Cinemark adds a service fee . As it explains,

Why is a service fee added to the price of each ticket?
In order to provide this convenient online service, we add a minimal charge as a service fee. By purchasing tickets online in advance, you are guaranteed a seat and avoid a sold-out showing. You can avoid service fees at cinemark.com by paying with a Cinemark Gift Card.

Sites like Movietickets.com also have “service” charges that they justify with the following language:


Why is there a service charge added to the ticket price?
The nominal fee set by each theater covers the convenience and costs associated with purchasing your tickets on MovieTickets.com. You may enjoy such conveniences as bypassing the box office lines, buying advance tickets to popular movies, and being assured that you will not be turned away from a sold out show. Also you have free access to showtimes, movie and theater information for almost every theater.

The service fee associated with your order is displayed to the left of the ticket price on the transaction page where you select your ticket type and quantity.

California laws prohibit “untrue or misleading” advertising, which some might argue the Lakewood theater has engaged in by disclosing its 50 cent fee in a place where only a few people might look.

This fee is bound to start an argument here.

On one side, the free marketers and personal responsibility crowd will claim businesses ought to be able to do anything, as long as they disclose the fee at some point. It’s up to consumers like Pennock to find the fine print, review it and understand it. If Pennock didn’t see the 50 cent disclosure on the marquee, it’s his own fault.

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What’s more, the government has no business regulating a service fee, which represents the free market at its finest, these laissez-faire capitalists would argue.

On the other side, we’re likely to find outraged consumers, who believe Pennock is entitled to some common-sense protection from the government. What’s to stop a movie theater from advertising 50 cent tickets with a $10 service fee, they would say. By not enforcing state and federal statutes against unfair and deceptive advertising, the government is essentially giving businesses a license to lie — a license that they should not have, especially in a free market.

How hard can it be, these pro-regulation folks would argue? The price you see should be the price you pay. No more, no less. They would even argue that a market can’t truly be free if prices are hidden.

I don’t know which side you take in this discussion, but I can tell you this: Something doesn’t feel right about this one.

For me, it raises a fascinating question. Whose rights are more important? The rights of a business to quote a rate it wants, or the rights of a consumer to know the full price of a good or service?

Who is right?

View Results

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  • Joe Blasi

    They get 100% of the 50 cent fee vs 0 to 5% of the ticket price (most of it goes to movie studio). That is why coke costs $4.50 and popcorn is $5.00

  • Mel LeCompte Jr.

    Convenience fees for pre-ordering online have been commonplace since that practice started. A bigger issue for me is if the .50 was rolled into the walk-up ticket price.

  • Ben

    This is a junk fee. Other stores don’t charge extra to order online and pickup in the store because they understand that if you visit the store they have the opportunity to sell you something else.

    I understand that margins on movie tickets are slim and that the theater is looking for ways to increase their revenue, but that should be even more incentive to make purchasing tickets as painless as possible so that they have your commitment to visit the theater and possibly buy concessions.

  • John Baker

    I have no problem with a convenience fee for purchasing a ticket online. After all, it costs the business more in CC fees when you make the purchase online instead of in person. I have a rather large issue with charging the fee on a walk up ticket when you advertise a different price at the location.

  • Chris Johnson

    Well, it was only a matter of time until something like this happened with the theaters. Surprised it took them so long.

  • Alan Gore

    Does the fee just apply to online orders? Fair enough, IF it were disclosed on the website

  • AAGK

    This is crazy! Online there have always been fees but he was at the window. I love how the things included in the fee are all things that we assumed were covered by the regular price.

  • This may have to do with the somewhat unique way that movie theaters and studios “split” the proceeds from ticket prices. That being that movie studios get all or most of the proceeds from new releases and theaters get little to none (which is why the price of things like concessions are often absurdly high). The balance “adjusts” the longer a movie runs in a theater, so it’s only really successful movies that have long runs that make *any* money for movie theaters. By separating out the fee, the theater may be attempting to actually recoup some portion of their actual costs.

    Of course, none of this justifies not actually disclosing it anywhere.

  • EvilEmpryss

    I have an issue with the online fees. I bought some Movietickets.com gift cards at Costco, thinking I was getting a deal. At something like +$1.25 *per ticket* I wound up eating up the discount I got buying the gift cards and then some in service fees! Their idea of “convenience” and the reasons we should pay for it are stupid. I can go to the theater and go straight to a kiosk to use a credit card — skipping the box office line — and not get a service fee on my ticket. I can use Google for free to find show times of any movie at all the theaters in my area. Avoid sold out shows? Not so. They can be sold out online just as easily as in-person. If you’re the kind to wait until the last minute to buy a ticket to hot show at a popular time, well, you snooze, you lose.

    The service fees are a money grab, plain and simple.

  • AJPeabody

    Jack and the Service Fee

    Fee, fie, foe, fum
    These add on fees have made me glum.
    Foe, fum, fee, fie
    Their reason is a baldfaced lie.
    Fum, foe, fie, fee
    It’s good for them but not for me.
    Fie, fee, fum, foe
    I’ll sit home and just not go.

  • Regina Litman

    I think that is indeed what is happened here.

  • Regina Litman

    Greetings over the wifi system from a hotel room whose rate includes a well-disclosed $25 a night resort fee. Among the benefits provided by this resort fee is in-room wifi, according to a list I saw. I wish the room fee were $25 per night more with all of these extras included. But I’d rather pay the resort fee and get the extras in a package than pay, say, $15 per device, per day for in-room wifi, for two or more devices.

  • William Leeper

    A little about the movie business (I have been involved with theater). When you reserve a “print” (a copy of the show), the studio or the distributor will charge a fee usually between $1,000 and $5,000 up front to reserve it. Then once you show the print the studio will take anywhere between 10% and 75% of the ticket sales. So if the studio charged $1,000 for the print, and was charging 10%, and ticket sales were $10,000 the theater would owe nothing further because the $1,000 they originally paid is counted against the 10%. Still yet the profit margins are low, but the ticket price should include ALL costs.

  • vmacd

    If it’s to cover credit card costs, does it still apply if you pay cash?

  • vmacd

    Yes, but it costs less than the price of paying a human being.

  • John Baker

    Not always… depending on the gateway and the processor, you might pay 0.25 per transaction + online. 100 transactions later you’ve paid $25.

    A big movie theater could easily sell more 100 tickets in an hour but there’s no way they’re paying much over minimum wage.

  • Joe_D_Messina

    Tough call whether the consumers or movie studios will hate this more. Wouldn’t be surprised to hear that the movie studios eventually file suit for their share of those fees being it seems like a clear effort to avoid paying the total owed them.

  • Regina Litman

    Unfortunate correction to my earlier post: There’s a service charge of $30- $35 a night that was not disclosed until checkin and is hard to spot on the itemized listing. We have no idea what this covers that the room rate and resort fee don’t cover. The resort fee does cover a shuttle bus on the property, but the driver still has a tip jar next to her. There’s a meal plan available with the room, but we didn’t take it. I could understand people with a meal plan being charged this, but even then, it should have been part of the nightly rate.

  • Annie M

    Was he paying cash for his ticket at the theater or was he buying online?

  • AAGK

    I think popcorn is about $10 now.

  • Steven Reed Sr.

    I agree, I don’t mind paying a “service fee” for the ability to purchase online or thru the theater’s app, I do take exception to the fact that he was charged a service fee at the walk up ticket window.

  • Steven Reed Sr.

    this is not true, our local grocery store charges a 15.00 fee for online ordering and drive up pick up service. Store like Best Buy and Walmart do not charge the service fee as far as I know, since walmart is rolling out a service that allows you to but groceries online and pick up at the store, fee free supposedly but we will see. BTW the 15.00 fee I pay because then I do not have to fight the crowd to get my groceries and 2 hr trip is cut dwn to 15 mins max.

  • RightNow9435

    Thats why i rarely buy soda there and bring my own candy

  • MarieTD

    I ordered a blouse and belt online from JCPenney for store pickup. I
    was surprised to be charged an eight-dollar shipping fee. Not only that,
    but half that order was to be shipped later, necessitating a second
    trip. After I paid, I walked out, and haven’t been back since. I think
    they’ve dropped that fee since, but I am still smarting over it.

    I’ve been “fee’d” to death and take my business elsewhere if I believe I’m being charged for something of low or absent value. Free Market works both ways.

  • joycexyz

    Isn’t the cost of doing business built into the price charged? Or am I just being terribly old-fashioned?

  • joycexyz

    Why not just build it into the price of the ticket?

  • joycexyz

    New one! Usually a shipment to the store has no fee–that’s why you choose that option rather than having it shipped to your home. I wonder if an employee made an error—and a pretty serious one since you’re no longer shopping there.

  • joycexyz

    Depends on your needs. The resort fee should be optional.

  • Fishplate

    A soft drink can be $2.29 or more in a restaurant. Do you bring your own drink when you go out to eat?

  • Hanope

    I’m not happy about fees when I order tickets online, but I’ll pay them. Given that many theaters near us have changed into the large seats, so there are less of them, we have sometimes gone to the theater to find we can’t sit together, or end up in the front row, way too close. Sure, I’d love to see a movie in the middle of the weekday, but I work, so I can’t. I’m limited to certain days and times and that usually ends up being the “popular” times and I can’t do much about that. But this is also why we don’t see movies in the theater as much anymore.

  • mmbNaples

    I drink water, so a- yeah, I sometimes have it with me.

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