Do you ever get excited about a product or service you’re buying online, only to be surprised with an added fee on the last page of checkout?
If so, then I’m sure that it sours the experience a little for you too. Let me explain the latest example of this happening to me.
I was recently chosen for a highly selective, six-month skills and networking program for founders. I had to put down some money to reserve my spot in the program. It was only $450, which seems well worth it. But as I arrived at the final confirmation page to process my payment, I was introduced for the first time to a “service charge” of $15.75. This did not sit well with me for a number of reasons.
1. I had already been shown a page that showed my total amount owed as $450 flat.
2. I had already entered my credit card info on the second page with the understanding that I would be paying $450 for this program.
3. I was presented with this “service charge” on the final page, when I had clearly already made my decision to buy at a price that I thought was fixed and agreed upon.
The $15.75 is not the issue. If I can afford to pay $450, then an extra 16 bucks isn’t going to be a deal breaker. But that is exactly the rationale that I believe is behind the decision to introduce this fee at the very last moment during the sale. I’ve already committed; I’ve already entered in my credit card info. In my mind, I’m going to this program, and it’s not likely that an extra 16 bucks is going to change my mind.
I understand that businesses and organizations need to pass along credit card processing fees to their customers, so I am not arguing against the necessity of the fee. However, the fees do not have to force merchants to compromise on customer experience. That tack-on tactic, at its core, is nothing more than a trick, and it’s giving ecommerce—Occasion’s area of expertise and innovation—a bad name.
Kick the Habit
I think the problem is that this type of trickery is simply ingrained in a lot of online platforms, both old and new. Remember this, by passing along fees as a separate line item on the customer’s receipt you are now creating another thing the customer has to decide – to pay online or not to pay the fees and sign up in person.
Transparency is at the root of Occasion’s philosophy. We convince our customers (business owners) to never surprise their customers while they’re booking online. We believe in “naked” pricing—what you see is what you pay. A simple adjustment like rolling up all fees into one price goes a long way in building loyalty with customers. Almost the entire airline industry, which is notorious for fees, now rolls up fees into one price to get the traveller to decide quickly.
Companies like Amazon, Groupon, and Eventbrite have figured out that removing all the surprise from the purchase decision allows customers to look forward to enjoying their purchase rather than feeling anxiety about higher prices and possible surprise fees. If repeat business is important to your company’s growth strategy (and it’d better be!), then you’d be wise to following their example.