The corporate raiders of the 1980s mined America’s corporate landscape of wealth without adding any value. Today the strip mining of our corporate wealth has largely played out and the continued drive to increase profits has prompted a shift to what might be called a “gotcha” economy, where corporations and businesses punish the slightest misstep with exorbitant fees.
Probably the most visible example of the Gotcha Economy is the airline industry. The incompatible goals of advertising low fares and increasing profits have turned flying into a giant game of pin the fee on the consumer. There are fees for baggage, even steeper fees for overweight baggage, fees for changing your flight, fees for exit row seats, fees for food, drinks and one airline even experimented with charging for the use of the bathroom. Many of the fees are not optional, leading consumers to cry foul at advertised fees that have little connection to the reality of the cost.
Here are some of the worst offenders in the Gotcha Economy:
Where does a $0.75 cent bottle of water cost $7? Or a soda that costs $1.25 in the machine down the hall end up costing $8? At the hotel minibar, of course. In general hotels have taken a page from airlines and work to increase their bottom line by skewering consumers with a wide range of fees including mandatory resort fees, fees for storing luggage and receiving packages, wifi and one hotel in Vegas even tries to charge customers a $50 “restocking fee” for storing personal items in the minibar refrigerator.
Losing Your Car Keys
If you have a late model car and lose your car keys, be prepared for some eye-popping charges. Pricing varies widely at dealerships but most have figured out consumers locked out of their cars are sitting ducks. We lost a set of our keys recently and the Hyundai dealership in town charged us $328.54 for a single replacement key and an electronic key fob. For many cars the cost can be even higher and many vehicles have to be towed to the dealership so the work can be performed there. It’s not unusual for lost keys to end up cost $400 to $600 or even more.
Not Having Health Insurance
You’d think hospitals and clinics would give people paying cash a discount for avoiding the overhead of processing insurance claims and you’d be wrong. Hospitals and insurance companies negotiate for a discount off their regular fees and flat rates for certain procedures. Individual consumers without insurance don’t have any bargaining power and end up paying the full, undiscounted rate on procedures. The U.S. system of healthcare is the most expensive in the world and those without insurance end up getting the full force of gotcha pricing policies. It’s no surprise then that medical expenses remain the number one source of bankruptcies in the United States.
Missing Credit Card Payments
Recent changes to the laws have made minor mistakes, like a missing a credit card payment, less devastating than they were in the past but getting behind can still be financial trouble. Let that late payment stretch to 60 days and credit card companies can still jack your rates and late fees of $15 to $35 can still be added every month the payment is late.
Red Light Cameras and Toll Violations
Government is not immune from the gotcha mentality and, in many communities, have teamed up with companies that supply and operate red light cameras to find new ways to tax motorists. Instead of saving the fines for the most egregious offenders, even minor mistakes like rolling through a right turn on red receive the same fine as someone blowing through a red light. Fines can run from $40 in Colorado to a $1,000 in Oregon. If governments were using the money to make improvements in the engineering of dangerous intersections, the safety angle would be more believable. The fact that the money just goes into the general fund in most cities points to the truth we’ve all suspected, that red light cameras are just another way for cities afraid to raise taxes to export their financial problems onto motorists.
The gotcha economy is here to stay and we can sadly look forward to corporations, government and sometimes public/private partnerships finding new ways to niggle us with fines and fees. It’s a cynical game and sadly there’s no end in sight.