February 8, 2023
CBS Boston recently published an article featuring Frederic Brunel, Associate Dean, discussing add-on fees at the end of certain purchases.
In his State of the Union address, President Joe Biden plans to end add-on fees or “junk fees” at the end of purchases of airline tickets, concert tickets, or resort stays. Economists claim these fees can hurt a consumer’s ability to find the best deal; some companies may show a lower base fee to get a buyer committed before adding the junk fees at the end. The lack of transparency upfront can hinder true cost comparisons. Dividing up the fees of seat assignments and baggage fees of an airline ticket have reduced average flight prices over the last 30 years.
The idea is designed to allow customers to purchase add-ons they want while leaving out charges for services they do not need. For Brunel, the issue is transparency. He states,“Markets will be competitive only if there is transparency. You show up to a hotel, and you find there is an extra charge per guest per night for the resort fee. You have no intention of going to the swimming pool or the beach because you’re there for the business trip”.