Optional extras

iPlayer is wonderful. How else could you catch up on everything you never knew you wanted to know? I never listen to Radio 4’s Money Box because I always end up depressed after being reminded how negligent I’ve been in the area of financial management but I’ve just caught up with Saturday’s edition which had an item on the escalating practice of airlines’ surcharging for use of credit and and debit cards to pay for flights booked on their websites.

Hmph. We’ve been paying extra for online bookings for ever. Airlines have always justified this as a cost of distribution and a sort of equivalent to the credit card companies’ merchant fee that they are absorbing. So why is everyone getting excited now?

Probably because, like BA’s new policy of charging for reserving a seat, it’s a visible and prominent example of the growing trend of disaggregating air fares and its new cousin, ancillary charges. Ancillary charges may be a nuisance but so long as they are flagged before a booking, or are deemed to be “optional”, they are legal. Ryanair could always justify its credit and debit charges on the basis that you avoided such fees if you chose to pay by Visa Electron. As Visa Electron is issued by only a handful of banks and is not a full service card but something more suitable for students, Ryanair could do this safe in the knowledge that most of its customers did not possess such a card and therefore would be paying the debit and credit card fee. It has now announced that from the first of January Electron will cease to be free but there will still be a payment-free-of-surcharge option, namely Mastercard’s new cash prepay card. Oy vey.

The bigger issue, of course, is transparency for customers. These practices may be irritating but they are legal and so long as consumers don’t vote with their chequebooks and take their business to suppliers that do not surcharge, these “extras” – and all the irritation that comes with them – are here to stay.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s