This story is partan online community dedicated to financial empowerment and advice, led by CNET Editor at Large and So Money podcast host Farnoosh Torabi.
What is happening
As businesses grapple with inflation, some are passing on rising costs to consumers with new fees at checkout.
why is it important
With inflation rising at 8.6% a year, the latest round of merchant fees adds to the woes of consumers’ wallets.
What this means for you
Knowing these fees can help you manage your budget and make better purchasing decisions.
Higher prices for food, and other aren’t the only shopping expenses plaguing Americans. Additional or increased merchant fees are also added to your purchase prior to payment. These charges are called drip pricing and you might not even notice them until you get your receipt.
Across the United States, companies are tackling new fees allegedly to offset the economists at Moody’s Analytics.and supply chain shortages. These extra fees add a layer of financial shock at a time when inflation is already costing the average household each month, depending
“Most of the time we find out about these fees at checkout, not before,” said Ashley Feinstein Gerstley, author of Financial adult, told me by e-mail. “Because these fees really run the gamut, you never really know what you’re going to get.”
I asked my instagram followers of these new and surprising expenses, and they gave me lots of anecdotes. From restaurants to doctor’s offices to ride-sharing services, here’s a look at some more recent (or just surprising) charges I’ve uncovered. And I’ll offer tips on how to handle those unexpected surcharges.
Restaurants charge more, and not just for food
Many restaurants are still reeling from a tax slump in the first year of the COVID-19 pandemic. Today, with rising food and labor costs, restaurants continue to struggle. “Small commercial restaurants operate on very tight margins of around 3-5% pre-tax,” said Hudson Riehle, senior vice president of research at National Restaurant Association. “The typical restaurant business model is not designed to cope with this sustained and accelerating cost of food and labor, which is placing extraordinary pressure on operators, and it looks like it will continue. ”
Here are some of the new charges you might see on your restaurant bill:
Credit card surcharges
Earlier this spring, major credit card companies like Mastercard and Visa increase in interchange fees, which is what merchants pay card issuers each time a customer uses a credit card. Also known as “swipe fees”, they cost businesses 1.5 to 3% per operation. They’re harder on smaller establishments like restaurants, and some pass that expense on to customers as a percentage of their total bill.
When Feinstein Gerstley dined with her family last summer in Sapphire, North Carolina, the restaurant charged a credit card processing fee that she says wasn’t mentioned until the woman arrived. bill: “We were a party of 15 who had drinks, apps, dinner and dessert so the charge was substantial, over $100.” Many states allow businesses to pass their card swipe fees on to customers, but they must properly disclose surcharges on visible signage and their websites. The customer’s charges also cannot exceed what the business pays to the credit card companies.
Increased labor costs
In April, Sarah Morisson saw an extra $5 when the bill for her enchiladas arrived at a restaurant in Alpharetta, Georgia. The reason? “Rising labor costs. This may also be referred to as a “Kitchen Appreciation Fee” in some restaurants and comes as an additional $3 to $5.
Health care costs
Restaurants compete for workers and offer more benefits as a draw. This additional cost may appear on your receipt the next time you eat out. In Chicago last month, Rema Shamon noticed a few dollars had been added to his restaurant bill titled “staff health care.” Similarly, in West Hollywood, Calif., Claudia Scott was charged 3% more for “employee health insurance” at a local restaurant.
Supplements for staff who do not receive tips
At a sandwich shop in Portland, Maine a few weeks ago, Jennifer Steralacci and a friend paid a $4 “untipped staff” fee — and that was on top of the tip. “I don’t recall seeing anything on the menu that said that charge,” Steralacci told me.
Carpooling and food delivery apps charge more for gas
Costs Uber and Uber Eats announced a new fuel charge to help drivers cover the cost of rising energy prices.because of the pandemic, but as ride-sharing companies compete to hire drivers, they entice them with connection bonuses and higher wages. This is another reason why your rideshare total seems more expensive than ever. Additionally, in March,
It will cost an additional $0.45 or $0.55 on each Uber trip and $0.35 or $0.45 on each Uber Eats food order, depending on location. Uber says 100% of those fees go to the drivers. Rival ride-sharing company Lyft also announced a 55 cents gasoline overload. Grocery delivery app Instacart says it’s tackling a new one 40 cent fuel costs too.
Fees at doctors’ surgeries also add to the shock
Increased costs for supplies and materials
Keep an eye on the cost of this item at your next medical visit, which varies in price. In Dallas, Texas, Kelsie Whittington was hit with an unusual $18 “supply fee” after her son’s routine visit to the pediatrician in May. The doctor’s office explained that it involved bedspreads, needles, gauze and other more expensive equipment.
With insurance companies slow to issue reimbursements, the clinic was charging patients. “I was a little shocked at first, then empathetic. I needed to pay for my son’s health,” Whittington said.
Although doctors’ offices have been charging facility fees since before the pandemic, patients may not be notified until they receive an itemized bill. According consumer reportsset-up costs, which usually cover the cost of maintaining a doctor’s office, urgent care center or hospital-owned clinic can add hundreds of dollars to a bill…and insurance may only partially cover it.
What can you do about all the extra hidden charges?
To minimize the blow of these new fees and surcharges, we need to gather the facts and be prepared to defend our interests. Here are four tips:
1. Ask about fees: We may feel uncomfortable or embarrassed asking about new and unusual charges. But if a company isn’t upfront and hasn’t disclosed its fees up front, we have every right to understand and ask questions. We can learn that the fees are justified and that we are in fact happy to pay them and continue to be patronizing. In other cases, it may deter us from returning.
2. Ask for a discount: Like many gas stations, some restaurants offer cash back to help minimize their credit card processing costs. For example, at The fifth season restaurant in Port Washington, New York, diners who pay cash receive a 3.5% discount on their bill through its cashback program promoted on the restaurant’s website.
Even if it’s not advertised, ask if a company will offer you a discount, a win-win situation for you and the merchant. I have also used this trick successfully in small independent shops.
3. Think twice before using third-party delivery apps: Delivery apps are convenient, but they can quickly double the cost of your pizza order after fees, taxes, and the suggested 25% tip. Ordering takeout the old-fashioned way by calling the restaurant directly could result in substantial savings. Some restaurants may require you to pick up the food, but others may offer their own free delivery – just be sure to tip the driver. If you want to stick with third-party providers, MealMe helps identify the lowest options by comparing prices across the board.
4. Vote with your feet: It’s our choice where and how to spend, and if paying extra is too much to bear, we have the right to opt out and go to a different company next time. When a restaurant manager refused to remove the surprise credit card surcharge, Feinstein Gerstley said a family member present shared the experience on Yelp. “We definitely didn’t go back to the restaurant,” she said.
If a charge is not accompanied by adequate disclosure, the merchant may be in violation of state laws, so consumer advocates recommend file a complaint with your credit card issuer and the state attorney general. According to Riehle, “The restaurant industry is very competitive and operators know that if a consumer’s latest experience does not meet their expectations, they are likely to vote with their feet.”