Business owners say fees are needed to cover costs and show customers where their money is going. But retail analysts and advocates like the Consumer Financial Protection Bureau (CFPB) say secondary fees diminish people’s ability to shop around. CFPB data also show fees cause people to pay more overall because businesses can charge more than what the market will let them get away with in the sticker price.
“People don’t shop based on fees. They shop based on the price of the product,” a CFPB spokesman says.
So widespread is the tactic that President Biden is making a fee crackdown one of his administrative priorities. His administration estimates that Americans pay more than a collective $90 billion in what the president has dubbed “junk fees” each year, including those for credit cards, food delivery, bank overdrafts and event tickets.
Congress introduced a bill last April to “limit and eliminate excessive, hidden, and unnecessary fees imposed on consumers,” while similar measures have recently passed the New York and Illinois state senates. California, too, added restaurants to the list of industries covered under its existing hidden-fee ban.