Do Companies Charge Too Many Junk Fees?

Susan Jay regrets picking up the phone to make a call from Harrah's Atlantic City. But she says she had no choice. Her cell phone wasn't getting a clear signal.

When Jay checked out, she discovered three unexpected charges — one for $26 and two for $45.

Yep, you guessed it. Harrah's charged her about $5 a minute for the phone calls, an unconscionable markup.

"After a heated discussion with the billing department, they removed the five-minute call for $26," she says. But that left her with a $90 bill. And the casino wouldn't budge.

"It's not enough," she says.

From Jay's perspective, these charges are a pure money grab.

We can do the math if you want. The cost of providing phone service is negligible. Even with a 100 percent markup, a reasonable hotel guest shouldn't expect to pay more than a few cents a minute at today's rates. Most budget hotels offer "free" local calls for guests, which is to say, they include phone calls in the cost of a room (remember, nothing is really "free"). Some hotels even offer unlimited domestic calls.

So what is Harrah's phone charge? Is it a junk fee or legitimate?

There are many well-meaning people — some of them reading this now — who would describe this as a legitimate fee, and free-market capitalism at its finest. Harrah's is charging what the market will bear for phone services at its hotels, and if that means marking up its phone bills 3,000 percent, God bless the USA.

I take a different view.

Jay had every reason to believe her phone calls would be included in the cost of her room. After all, many casinos charge mandatory "resort" fees that include amenities that used to be charged a la carte.

It can be a little confusing -- not unlike the tourist who flies once a year and feels broadsided by a baggage fee. For two generations, luggage was part of the airfare. And now it's being "unbundled," or removed from the base fare, with practically no notification (and no, saying "some fees apply" is not ample notice).

My view of junk fees — and, by the way, I'm right about this — is far more inclusive. If a fee isn't adequately disclosed, can't be adequately explained and generates enough outrage, let's call it what it is: junk.

Back in 2010, I wrote a story about good airline fees. Yes, they do exist. Fees for optional Wi-Fi service or special gourmet meals come to mind.

To consumers, the rest are trash. Companies charge them because they can.

Here are the questions I ask before dispatching a questionable fee to the junk yard.

Does the fee in any way relate to the cost? Fees for confirmed seat reservations are a good example of junkiness. Giving a customer a confirmed reservation next to their three-year-old costs the airline practically zero. So why charge $15 for it? Because they can. That's worse than garbage — it's predatory garbage.

Is the fee applied consistently? Baggage fees are maddening to customers because they appear to be in no way related to the actual cost of transporting their luggage. For example, on fee-obsessed US Airways, my regulation-size carry-on bag costs nothing if I take it on the plane and stow it in the overhead compartment. Put it in the cargo hold, and I pay $25. If it's my second bag, it costs $35, and if it's my third bag it costs $125 — for the exact same bag. Unless, of course, I carry the right credit card, and then it's "free." What nonsense!

Does the fee give you something you didn't have before? If a fee adds an amenity like in-flight Wi-Fi that wasn't part of the traditional airline ticket, then it passes the junk smell test. But if it simply takes something away that was part of the deal, like a $90 fee to print out your boarding pass, then it's crap.

I can already hear some of you say, "No, you've got it all wrong. You don't have to pay for a boarding pass or a checked bag is. The dividing line between a junk fee and a legitimate fee is choice."

Not really.

See, what's "optional" to you may be "mandatory" to someone else. If I have to bring luggage on a plane or make a phone call from my hotel, then I'm going to get slammed with outrageous fees. I don't really have a choice. You may think I do, but I don't.

So, to say someone had a "choice" about bringing a bag or making a call — well, that's applying travel industry logic to the problem of fees.

I won't let you do that.

Alas, the travel industry is happy to take your money all the same, which is exactly what happened to Jay. She appealed to Harrah's in writing, and received a terse form letter that said, "A decision was made that action on their behalf is not merited in the matter," and apologizing "for any disappointment."

Something tells me these meaningless form responses and the junk fees that inspire them will continue until guests like Jay take their business elsewhere.

After you've left a comment here, let's continue the discussion on my consumer advocacy site or on Twitter, Facebook and Google. I also have a free newsletter and you'll definitely want to pre-order my new, amazingly helpful and subversive book called How to Be the World's Smartest Traveler (and Save Time, Money, and Hassle) Photo: Eugene Sereev/Shutterstock.