I would’ve thought that makes it easier on all parties. Or is this just another way to suck money out of people?
In: 34
It probably started as a way to amortize the expense of creating a digital distribution system on top of a physical one.
While I am open to the idea that some fees are required I think the problem we have is related to transparency. A sticker price that doesn’t include tax nor fees is literally an arbitrary number. Consumer protection died in the 90s. If it ever existed
since this is an ELI5. Nothing is free, digital products still cost something, be it for the type of money used, the increased customer service around that method or the need to subsidize something else. Some times its easier to build the margin into a fee than a product cost (particularly if the cost varies wildly by method of payment)
At my job I have digital products that I charge a fee on…generally its to mitigate costs somehwhere else, in my case its almost always customer service (people calling saying x product didnt work, or they don’t know how to redeem it etc etc)
For the most part, a company will not do their own in house coding and will instead use a payment processor that provides a turn key solution. You can easily add the ability to accept payments and be guaranteed the ability to handle mass payments and traffic, but the company that made the payment interface and runs the card processing site will charge a small fee. Typically they will charge 1 or 2 dollars per transaction, and to accept credit cards Visa charges 1-3% on top of that.
The tech fee or convenience charge iss the 1 or 2 dollars and goes right to the app developer. Companies are not allowed to charge credit card fees for the most part, so they just absorb the percentage visa charges
Companies love it because they don’t have to hire programmers and can easily upgrade their websites with pre built code
It lets them charge more but keep menu prices the same. They bank on the fact that once you have spent time getting the order together, you’re more likely than not to complete the transaction with a bit of grumbling and maybe a reddit post. There is no cost that can’t be factored into the selling price. Credit card companies have charged fees forever. Just remember, if there was someone they thought they could blame for the fee, why not just say so?
The purpose is they want more of your money.
Ostensibly though, it costs money to hire programmers and web-devs and project managers and sysadms to create and run the new method of taking your money/whatever. Someone has to pay for that. But in reality, the digital method is maaaaasively cheaper for them. This is just an excuse to squeeze more money out of you.
Someone, somewhere, is doing something manually to properly execute your digital transactions. And of course they don’t do it for free. That’s what the fee is for.
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