Update 4/20/06: I received the initial message from Orbitz that they had found my target fare of $294 which according to them is less than my target price of $250. Then this morning I received a message that they are still searching and the best they could find is $263 which today they consider to be above my target price. Perplexing!
When I lived in Germany taxes and fees were always included in the quoted price and that’s the way it should be! As a consumer when I make a purchase I want to know how much I’ll be paying but in the US many companies try to play consumers with misleading advertising that doesn’t include fees and taxes which can add over 30% to the price. Airlines, rental car agencies, hotels, and EBay vendors are some of the worst offenders, advertising prices well below what you’ll actually pay.
This gets to an email I received from Orbitz today that made me chuckle. I have an Orbitz deal detector alert going for airfare less than $250 to visit my folks. Here’s how it read (no joke):
Orbitz DealDetector found a fare that <strong>meets or beats your
desired fare</strong>. Book while seats are still available!
*****************************************************************
TRIP 1: FOUND IT!
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ONE: San Francisco, CA (SFO) to Portland, ME (PWM) for <strong>$250 or less</strong>
TOTAL FARE PER PERSON <strong>$294</strong>*
Apparently in the world of Orbitz $294 is less than $250!
you got something in common with Da Man…http://www.thebestpageintheuniverse.net/c.cgi?u=orbitz_blows
The reason taxes MAY NOT be included in prices in the US (yes, you are not allowed to include the tax in your prices) is so that you will always know how much tax you are paying when you make a purchase. This is good. Otherwise the tax you pay is too easily hidden (and raised).
As for “fees” (not taxes)… yeah, I don’t know what the deal is there.
I have to agree with the above comment. I live in Canada, where there is a tax called the Goods and Services Tax, basically this is a value added tax like the VAT found in Europe. But unlike Europe it’s always added on top of the quote price.
While this may be a pain in terms of knowing the exact amount ahead of time, having it visible at least ensures the government stays (somewhat) honest. Any tax increases are immediately visible…
I agree that having tax amounts transparent is a good thing, however, I don’t think that means taxes and fees should always be hidden from the consumer until the final purchase step. For example, if you walk up to the counter of a rental car agency they’ll tell you the car is $30 a day, you say I’d like it for 3 days, you fill out the paper work, and then they say, OK that will be $140. Is that really good for consumers or just good for suckering consumers?
It’s one thing when we’re talking sales tax which is easy to adapt to consistently adding on X%, but it’s completely another thing when the taxes and fees vary so wildly from service to service (mainly an issue with airfare, hotels, rental cars, and handling fees). Like everyone in the US, you get wise to it and know that you won’t know the real price until it’s time to pay, but the lack of transparency is an annoyance!
I live in Germany and have been to Canada and the U.S. several times. I just returned from a vacation in Texas and I can tell you, every time I get there it annoys me over and over again. It’s just the way Todd says: As a customer I want to be able to see what I will be charged for whatever I choose to buy. And by that I mean the final amount; it’s the only way to truly compare offers without having all the different rules in mind all the time.
In Germany we currently have two levels of VAT in effect: 7% for groceries, books and magazines and 16% for everything else (cars, computers, etc). The amount of tax for each level has to be printed on your receipt separately, so there is transparancy. There will be a change from 16% to probably 19% beginning in 2007 and trust me, people are aware of it. Of course, vendors may choose to increase prices at the same time and effectively “hide” that, but this too is something people usually notice.