I would’ve thought that makes it easier on all parties. Or is this just another way to suck money out of people?
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It’s usually a way of recovering transaction costs or just arbitrarily adjusting the price without having to show it up front.
It depends on the product thats being sold. Technically every fee is just a way to extract more money from people, or due to some regulation. But they could also just include the “fee” in the overall price (such as airline fees are required to do).
So it matters which actual fee you’re talking about. “Digital convenience fee” is too broad.
That said, many “convenience fees” are related to costs for a credit card transaction. The vendor often passes that fee onto the consumer. When you see convenience fee, you should immediately think credit card fee, but not always the case
It’s a way to get more money without upping the price of the product. Oh look these tickets to a concert are only $25 bucks that’s cheap let’s buy them. Then at checkout they tag on these fees so you end up paying $75. When it comes to tickets, the band gets a percentage just the $25 ticket. Not the extra $50 in fees.
Many companies do not write their own payment software. Restaurants, property management, small business vendors and all that would like to manage payments without managing the payment system. They license and implement the payment technology, and those payment technology companies need to be paid for implementing their technology, maintenance, and development. It’s a symbiotic relationship between you (getting an easy payment platform), the vendor (making their products more accessible and not needing in-house software development), and the payment platform company.
This isn’t always the case, but a lot of times a third-party is likely involved ordering something online, and that’s essentially their fee for processing the transaction. In your example, Chipotle uses DoorDash to fulfill delivery orders, so that’s their cut. Think of Fandango selling movie tickets. If they sell at the same price as the theater directly, that “convenience fee” is actually just the cost to use their service.
Again, not true in 100% of cases where that fee is present, but I would say it’s the vast majority of them.
The convenient fees are convenient because they allow the company to extract a couple extra dollars from every customer very easily. therefore it is convenient for the company to get more money from the customer.
sometimes it might be related to credit card fees or credit card processing fees but those are fees that the company was always already paying whenever somebody used a credit card in person as well. having them call it a convenience fee after the fact is just more evidence that they’re adding this charge because they know that this process is convenient for you and they can get more money out of customers this way.
you are correct and thinking that buying things online is both convenient for the customer and for the business owner because the business owner doesn’t actually have to do anything in this process therefore you are also correct in thinking that convenience fees are just a lie and a way to extract more money out of the customer this is 100% true.
A brick and mortar business, when presented with the option of going online, can do one of two things to pay for the online service.
They can raise prices across the board to help pay for the new upgrades, or they can impose this price change only to the customers who are requesting the upgrade.
If a business is charging a digital convenience fee, it is because they decided that it would benefit them the most to pick option two.
I am certain the one for renewing the car registration is a BS fee. Along with the car registration fee. That shit can be completely computer automated and is just extortion.
Fees in general are a way for a company to diversify their customer experience while not having to change prices. For example a grocery delivery fee is added because the typical customer experience is to go to the grocery store. Instead of repricing all the goods for delivery they just add the fee. Sometimes when doing events it’s easier to put a venue fee in the pricing than reprice all the tickets. For example let’s say Pearl Jam wants to sell concert tickets for $75. Different venues are going to charge different prices for Pearl Jam to play, and to keep the prices simple the ticket company might add on a venue fee per ticket.
Then of course there’s fees just to suck money out of people. They’re already invested heavily and fees are a good way to profit once you’ve got a fish on the line. You’ll usually see them w/ bigger investments like cars, houses, boats, and the like.
It’s a way to make the final price higher than the advertised price to trick people into believing their price is lower than it is like any fee that is added on the marketed price like. Most companies will put as much of the price as socially and legally acceptable in those fees. This fee is seen as socially acceptable because people think there might actually be extra cost to an online transaction. Online transactions are actually a lot cheaper than any transaction in which you interact with an employee by a lot.
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