The Australian situation is clearly out of control. Rules there allow sellers to add checkout fees, but they're supposed to be based on recovery of the merchant fees credit card issuers assess. Eight dollars and 50 cents for a $49 flight is clearly a flat-out gouge with no relation to the actual costs. Choice, the Australian equivalent of Consumer Reports, found that airlines and taxis are the worst gougers, but other businesses also do it. Australian consumers are appealing to the government to enforce a "related-to-cost" requirement, but, for now, the gouge remains and government action is uncertain.
The settlement in the United States contains what appears to be more consumer protection than Australia provides: The fee is supposed to be no more than the fees merchants pay to banks, which are generally 1.5 percent to 3 percent of a total transaction. And sellers that assess checkout fees are supposed to provide adequate notification. But the notification is not foolproof: Although stores that assess checkout fees are required to post a notice on their doors, they don't have to post the amount of the fees until you pay. Similarly, online sellers need not disclose the fees until the final checkout process.
So far, the problem is more potential than actual. I haven't heard of any airlines, hotels, tour operators or rental car companies currently assessing a checkout fee. American Express, apparently not a party to the settlement, retains the no-surcharge provision in its merchant contracts. And, fearing some big gouges, California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas have already banned the surcharges, with other states considering similar legislation.
For now, you have to worry about a gouge only if you're traveling in Australia, and that probably means most of you are safe. But don't think it won't creep into domestic markets fairly soon. Today's consumer marketplace, with its ubiquitous price-comparison tools, puts severe pressure on travel sellers to post the lowest possible up-front prices they can, figuring they can puff up the final take with an assortment of fees. For proof, just look at the airline business, which lives on fees, or hotels with their deceptive "resort fee" pricing. And the situation is getting worse, not better. Price advertising in a highly competitive market follows a sort of "Gresham's Law": Bad pricing drives out good pricing. I know of several hotels that initially resisted the "resort fee" scam but had to cave on it when almost all of their competitors priced that way. These days, try to find a hotel in Vegas that doesn't employ that scam. Pretty soon, some airline, hotel chain or other seller will start to salivate over how much even a simple 3 percent fee could add to its bottom line. And once one does it, others will follow.
I have no idea about what's happening in other popular tourist destinations. The message for today, however, is simple: You're probably OK now, but, as you go forward, watch out carefully for checkout fees.
(Send e-mail to Ed Perkins at eperkins(at)mind.net. Perkins' new book for small business and independent professionals, "Business Travel When It's Your Money," is now available through http://www.mybusinesstravel.com or http://www.amazon.com)