Monday, May 12, 2008

Surcharge: a capitalist's favorite word

How do you raise prices without raising them? Sounds like a trick question but it's not. If you are frequent air traveler, you are no doubt familiar by now with all the "surcharges" airlines levy on their passengers. Fuel surcharge, baggage handling surcharge, airport security surcharge etc So what's a surcharge? According to Merriam-Webster, a surcharge is an "overcharge", is to "charge an extra fee". To these airline companies, surcharges are a way to keep ticket prices low but still bilk the consumer to death. Sure you can search for cheap tickets on expedia and other such sites, but when airlines can charge whatever they want under the guise of various surcharges, are you really getting a good deal on your tickets? Imagine if every industry started adding on surcharges...we'll end up with something like this:

  • from fast food companies: sure we have a dollar menu but there's a $0.99 surcharge
  • "extra topping surcharge" for pizza
  • security surcharge at shopping malls