Sneaky fees costing shoppers millions, Consumer NZ finds

14 March 2017

Sneaky fees costing shoppers millions, Consumer NZ finds

Consumers could be paying $68 million each year in extra fees retailers are adding to the advertised price of goods and services.

Consumer NZ chief executive Sue Chetwin says its latest survey found more than two-thirds of consumers have been stung by extra fees when buying goods and services.

“These charges, often called ‘booking’ or ‘service’ fees, are increasingly common in the travel and entertainment industries. But they’re not included in the advertised price, misleading consumers about what they actually have to pay,” she says.

Consumer NZ has launched a campaign calling for the Fair Trading Act to include rules requiring businesses to disclose the full cost of products upfront.

A majority of Kiwis (68 percent) agree retailers should be required to disclose the total price in their advertising, Consumer NZ’s survey shows.

The practice of adding fees to advertised prices is known as “drip pricing”. Companies use it because it makes consumers more likely to buy.

“By the time the add-ons are revealed, consumers are more likely to be committed to the purchase and less likely to shop around,” Ms Chetwin says.

“While the Fair Trading Act prohibits misleading representations about price, it hasn’t been effective at stopping drip-pricing practices.

“Other countries provide better consumer protection. In Australia, for example, companies are prohibited from advertising a component of a price without prominently displaying the total amount.”

Consumer NZ is inviting people to sign its online petition to get the law changed. The petition can be found atconsumer.org.nz/sneakyfees.

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