From airlines to ticket sellers, companies fight U.S. to keep junk fees

Original Article ↗ Hacker News Discussion ↗

U.S. efforts to rein in “junk fees” — hidden or mandatory charges tacked onto travel, entertainment, restaurant bills and more — are drawing strong support from people frustrated by resort fees, automatic gratuities, airline seat charges and other add‑ons that make comparison shopping difficult. Commenters argue that requiring all‑in, upfront pricing would strengthen market competition and protect consumers, especially compared to practices in Europe where taxes and fees are usually included, though some note that businesses will likely fold these fees into higher base prices rather than give up the revenue. Overall, transparent pricing is framed less as price control and more as a prerequisite for functioning “free markets.”

Scale and distribution of junk fees

  • White House estimate of $64B/year in junk fees is seen by many as low given frequent high per-transaction charges.
  • Some speculate fees are highly concentrated on a smaller, higher‑spending segment (e.g., heavy travelers/entertainment buyers).

Transparency, comparison shopping, and market function

  • Broad agreement that the core problem is hidden or late‑revealed mandatory fees, not fees per se.
  • Hidden fees make price comparison difficult, exploit sunk-cost/checkout friction, and are viewed as fundamentally anti‑competitive.
  • Several argue transparent “out‑the‑door” prices are essential for a functioning market; opaque pricing is described as a market failure and false advertising–like.

Sales tax vs. VAT and tax‑inclusive pricing

  • Many non‑US commenters highlight that in most countries listed prices already include tax and mandatory fees, and this greatly simplifies comparisons.
  • Defenders of US tax‑exclusive pricing cite:
    • Complex, overlapping state/county/city taxes that vary by location, product, and even time.
    • Desire for consumers to see how much government takes.
  • Critics respond that other federations manage inclusive pricing, that stores already know the exact tax at checkout, and that excluding tax disproportionately harms lower‑income and visiting consumers.
  • Some see federalism and local autonomy as structural obstacles; others call this an excuse, not a necessity.

Industry examples and consumer experiences

  • Travel/hospitality: mandatory “resort fees,” seat selection fees (family seating concerns), hotel taxes, and portal vs. direct‑booking discrepancies are heavily criticized.
  • Restaurants: automatic “gratuity” and extra “operating cost” surcharges, often poorly disclosed, blur the line between tip and price; some consider them deceptive or even fraud‑like.
  • Other sectors: pet grooming “materials fees,” apartment “technology package fees,” online course fees, order handling charges, and platform/service fees (Uber, delivery, ticketing).

Tipping culture and auto‑gratuity

  • Strong pushback on mandatory gratuity, especially where workers already earn normal minimum wage or when auto‑grats aren’t clearly disclosed.
  • Some accept auto‑grats if they are conspicuous; others say tipping culture has spread irrationally and should be replaced by higher listed prices and wages.

Regulation, costs, and likely outcomes

  • One side worries new rules will force costly system overhauls and simply repackage fees into base prices, not lower them.
  • Others reply systems already support all‑in pricing (e.g., for EU markets) and that fees themselves were the costly change; compliance is an “incompetent leadership tax.”
  • Many expect the main benefit to be transparency: higher visible sticker prices, fewer surprise add‑ons, and more effective consumer price comparison, even if total spend doesn’t drop dramatically.