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Thoughts on Hidden Pricing

Many years ago I was a coin collector.  From that time, I was put on many mailing lists for coin sellers.  From time to time, even today, I get physical mail from coin and stamp distribution firms.  I got one today.  The offer was for a complete collection off the President Barak Obama’s stamps from all over the world.  The brochure was multiple pages, very glossy and colorful, showing examples of what stamps would be included.  I looked and I looked and nowhere was there a price listed.  Finally at the very bottom of the last page, in 9 point type, I read that the cost was $9.98.  In the next paragraph, it stated that this price was per sheet.  There would be three sheet sent every month for 36 months.  So, the total cost, assuming there is no tax or shipping, is $1,077.84.  That total was never listed anywhere, and my belief is that they do not show it because they are ashamed of it.  If they put the cost of $1,077,84 in 72 point type on the front page, they probably assume no one would buy it.  So they hide their price and hope that no one will notice the $29.94 on their credit card each month.  And of course, in big letters, they state, “Send no money!”

With all the software companies going subscription, I have found they they will always publish the lowest dollar amount.  One program is advertised on their website as being only $2.99 a day.  When a person buys it, they pay the yearly price which is $1.091.35, which appears no where on their site.  Apple discovered and discontinued a piece of software that charged only $495.00 a month.  The developer had made over $150,000 before Apple found it and discontinued it, and there are no refunds.  Other software developers put a weekly or monthly amount, but charge yearly and that number is not given until after the customer puts in their credit card number.

Hiding pricing is nothing news.  Back in the day I worked for a company that was developing an automatic billing system.  Their head quarters were in Hawaii, but their programmers were in Santa Clara.  When we about 80% of the way done, the president of the company flew in and brought us a special request.  He wanted us to put in a random “surcharge” calculator.  It would be a random percentage of the total and would be hidden in the details of the bill so that when a company got the bill, for $3,495.16, they would not notice the $170.00 surcharge, randomly generated and hidden in the bill.  This extra surcharge would not go to the company sending the bill, it would go to the president of this company.  So as we sold the software to various companies, and they were automatically sending out bills, many dollars would go into the bank account of the president of the company in Hawaii and he was just hoping that no one would notice.  Surcharges, shipping and handling charges, inventory charges and incomplete disclosure of pricing makes it impossible for a customer to know what they are really spending until it too late.  I hate hidden pricing.


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