Will The “End” of Junk Fees Actually Save People Any Money?

A new rule by the FTC is proposing to “stop bogus and hidden charges.” The long-awaited rule has widespread support from almost everyone who doesn’t directly profit from those so-called “junk fees.” This goal of making it harder for companies to hide fees or charge surprise penalties is an admirable push toward transparency and fairness. It also, unfortunately, might not actually save people any money.

Perhaps coincidentally, in the same week Disney announced they will be increasing prices for theme park tickets and brands like Chipotle and Pepsi have both announced they will be raising prices. The reason fighting junk fees may not deliver on lower costs is because these fees offer an easy target but are often “not a huge component of the price” of goods or services. Eliminating these junk fees may simply lead sellers to do more price bundling or turn to sneakier pricing models overall ... which isn’t the great news consumers might be hoping for.