Last week our son and his wife came to spend a week with us, and a good time was had by all. Said son is the U.S. manager for a small, family-owned, boutique British retail firm, which means he’s financially comfortable, but not extravagantly paid. They flew coach, and his observations on the air carrier were succinct – “They try to nickel and dime you to death.”
For example, although they’d booked their reservations together, when they got to the airport they were told they couldn’t sit together unless they paid another $75. Since the airline going to Utah isn’t the one he flies on business, the baggage fees were $25 per bag. I lost track of the various other fees involved.
His experience is hardly unique. Everywhere I look, there are fees tacked on. Get a new cellphone, even with the same carrier and with the same number, and the odds are you’ll be charged an activation fee – even though said “activation” takes a few minutes at most. I can see such a fee for a new customer… but for an existing one?
Can you even get a new car for the advertised base price? And would you want to drive it? How many people stay with “basic” cable or satellite television services?
Higher education is notorious for such fees. Books, lab fees, activity fees, accompanist fees, parking fees, etc. And I’m sure everyone can cite other examples.
Part of the reason for all those fees is because almost everyone shops for everything on price… and retailers and others use low prices to lure people in, and then tack on the fees, because the initial low prices often don’t even cover costs.
My wife the professor is always amazed at how often university students don’t look at the bottom line when choosing a college or university. A higher-cost more selective university will offer a student what appears to be a significant scholarship, perhaps double what a less prestigious college might offer, but so often the students only compare the scholarship offer and not the bottom-line cost. If tuition is $30,000 a year at university A, and a student is offered a $15,000 a year scholarship, the tuition cost is $15,000. University B, with similar offerings but less prestige, offers a $10,000 scholarship against tuition of $20,000… and the student or family often pick the higher scholarship, even though they’ll end paying [or owing] $20,000 more after four years. Of course, since universities are identical, other considerations have to be weighed, but so many students – and their parents – don’t even think about that.
But… everywhere I look I see this pattern… and how many people fall for it.