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Business

Hotels are among the industries with hidden fees (Photo by Jeff Greenberg/Education Images/Universal Images Group via Getty Images)

By Hannah Bryan Leaders Staff

Hannah Bryan

Hannah Bryan

News Writer

Hannah Bryan is a news writer for Leaders Media. Most recently she was a reporter for the Sanilac County News...

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Jul 29, 2022

See the Hidden Costs of Inflation

Prices on goods and services are rising, but it is the hidden fees that really sting.

Hidden fees aren’t anything new. Consumers may have noticed such items listed on cable or Internet bills in the past—like an “activation fee”—but now these fees are showing up at car dealerships, hotels, and airlines. 

These added costs are often marked as convenience fees and can raise the overall price significantly. One Airbnb user shared in a tweet that his four-night stay at $180 a night was listed at $867 after taxes and cleaning. At checkout however, his total was $958 after $91 in “additional fees.”

New cars now often have markup fees added onto the original price tag. A Toyota 4Runner in Illinois, for example, has a $15,000 markup, while a Ford F-150 in Maryland was listed at $30,000 above the sticker price, according to Markups.org. One dealer calls it a “market adjustment” fee. 

Some airlines offer super-low rates and then charge for carry-on bags and seat selection. Rental-car companies add-on auto insurance, even when it’s not required. And a hotel in Hawaii offers free towels by the pool, as long as you pay a $30-per-day “resort fee.”

This practice of adding additional fees, sometimes called price dipping, is starting to face opposition from government regulators. The Federal Trade Commission has proposed a plan that would limit the hidden fees and “switch-and-bait” advertising for vehicles. 

Nebraska and Washington, D.C., have even sued hotel chains for adding unnecessary hidden fees.

Consumers may have some luck fighting hidden fees on their own though. While most buyers don’t contest the hidden fees, those who do seem to get good results. Two-thirds of customers who argue hidden fees are able to have them removed, says Consumer Reports.

Another sign of inflation is when the price remains the same, but the product gets smaller or of less value. It’s referred to as “shrinkflation.”

Cottonelle Ultra Clean Care toilet paper went from 340 sheets per roll to 312, Folgers 51-ounce can is now 43.5 ounces, Fritos Scoops party size was 18 ounces and is now 15.5 ounces, and Gatorade bottles that were 32 ounces are now 28 ounces. 

Massachusetts Institute of Technology economics professor Sarah Fisher Ellison says that inflation is to blame for the rise in drip pricing and shrinkflation. While hovering at 2% the past few years, in the last year the rate of inflation has skyrocketed. The Consumer Price Index, the main measure of inflation, most recent rang in at 9%

Companies are scrambling to find a way to boost profits without tipping off the consumer that they are spending more money. 

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