STEVE INSKEEP, host:
On Fridays, we talk about your money, and today we'll talk about why so much of your money may be going away from you in fees - the ones in your phone bill, and your credit card bill, and your cable bill, and your bank statement. Fees seem to hit us from every direction. Many of them are hidden, as a matter of fact.
And reporter Bob Sullivan has been tracking this. He wrote a book called "Gotcha Capitalism."
Welcome to the program.
Mr. BOB SULLIVAN (Columnist; Reporter): Hi.
INSKEEP: I want to mention, I was on the street the other day and this woman asked me where's a bank machine for my bank, and she names the bank, and I said, well, there's an ATM over there, there's an ATM across the street. She says I don't want to go to those. They're going to charge me three bucks.
Mr. SULLIVAN: It's not just $3 from the machine that you get your money from; it might be another $2 from your bank. So $20 can literally cost you $5. That's just one of the myriad of fees that banks charge in this huge industry now that has kind of grown around confusing people about what things really cost, putting one price tag on products and then later adding in all these fees.
INSKEEP: But let's talk about what is driving companies to move in this direction.
Mr. SULLIVAN: Now, this is a big shift and it really is tied to the Internet. Ten years ago or so, Internet shopping was becoming the new thing. Businesses and economists were really worried about with consumers being able to shop at maybe 20 different stores instantaneously, that they would always get the lowest price. So companies had to come up with some kind of alternate strategy, and that was literally what I call the death of the price tag. So they give us one price and then later on add in all these charges.
INSKEEP: Can you go through corporate reports and find companies who've essentially said, well, our business is flat, but fees are taking off?
Mr. SULLIVAN: Sure. There are banks now that will say that they make more money from fee income then from interest income. And if you think about that, that means that their business model has been turned upside down in the last decade. You know, $1 at a time, you know, that's obviously annoying. But I think this is really changing the way the economy works.
And in a free market you're supposed to be rewarding the most talented people with the best ideas and most innovative products, but if you're in a system where cheating is what wins, you're rewarding the best cheaters.
INSKEEP: Are you saying that companies are no longer competing to provide the best service?
Mr. SULLIVAN: That's exactly what I'm saying. They go quarter to quarter, just bumping up their revenue as much as they can through misleading people. The other part of this is companies that would like to compete honestly can't do it. I have an anecdote in the book of Intercontinental Hotels a couple of years ago setting upfront pricing, they called it, and they were offering consumers precisely what they would pay when they checked out of the hotel, and they lost all their customers to competitors who were doing bait and switch. And so they literally could not afford to be honest. That's a shame.
INSKEEP: What's the bait and switch when it comes to a hotel?
Mr. SULLIVAN: Well, I'll give you the most dramatic example. If you use Priceline and you get a $99 price for a hotel in San Francisco, almost all those hotels now that are three-stars or higher, they have resort fees, they're called. And they can be $15 per person per night.
INSKEEP: What's a resort fee?
Mr. SULLIVAN: Well, it charges you for mini-golf or for towels at the pool, even if you don't use them. It's mandatory. You've already paid the money, so you can't get out of it, and your good deal is suddenly a bad deal.
INSKEEP: I suppose you pick up the telephone and make a phone a call, that might be another three bucks where it used to be fifty cents.
Mr. SULLIVAN: Yeah. You know, there's even some hotels now that are charging for room-to-room calls.
INSKEEP: Room-to-room calls?
Mr. SULLIVAN: Yeah. You have to watch for that. And I'll give you - I'll go one better. I was in Las Vegas for the CES Convention.
INSKEEP: This is the Consumer Electronics Convention that's gotten a lot of news.
Mr. SULLIVAN: That's right. Yeah, yeah. And at the Wynn Resort there they have a sign on their mini bars there that if you pick up an item, even if you put it back, if you don't put it back within 60 seconds, they'll charge you.
INSKEEP: Oh, because they got the motion detectors there for the individual...
Mr. SULLIVAN: They have sensors in the mini bars, yes, yes.
INSKEEP: Did you pick up something and put it back after 45 seconds just to feel you'd gotten something free?
Mr. SULLIVAN: You know, if they had a little stopwatch near the mini bar, that might be fair.
INSKEEP: Bob Sullivan. Thanks very much.
Mr. SULLIVAN: Sure. Thank you.
INSKEEP: Bob Sullivan's book is titled "Gotcha Capitalism."