App/Online ordering platforms profiting by charging customers a “service fee”

ameenasha2

App/Online ordering platforms are profiting by charging customers a “service fee”

If a business had internal improvements to make a better customer journey/visit while at their premises or website they don’t charge their customers a fee for using them, or if the roof leaks or something does not function as intended, the owner pays to fix it to keep customers coming.

In the app world (not limited to but only an example: UberEats), if the software needs an update (the "platform improvement"), they charge the customer for the privilege of them fixing their own tool. Or supermarkets offered delivery (where all the costs involved was part of the delivery fee) now you have delivery fee and also a picking and packing fee… It's a complete reversal of traditional business logic…

Their use to be around 2 fees VAT and postage and packaging the latter covered their expense to deliver such services. Now there is “fee-stacking” (fee’s upon fees), and as long as it’s not “hidden” and clearly visible trading standards won’t get involved.

What are your thoughts around this?

eskbanker

Businesses providing a service are obviously entitled to charge a fee for that service - would you be happier if they concealed such charges within higher prices instead?

flaneurs_lobster

 …..as long as it’s not “hidden” and clearly visible trading standards won’t get involved.

What are your thoughts around this?

Exactly this, I agree with TS - if the charges are clear then I make my choice to do business at the overall price or not. Don't particularly care if they differentiate some of their price as being a "service charge", "convenience fee" or "made-up number", as long as it's included in the bottom line.

What might be more concerning is if these 'extra' charges are considered refundable if the goods are returned.

Okell

As somebody who doesn't use supermarket home delivery I certainly don't want to be paying for the extra picking and delivery costs incurred for those customers do use it. If you use supermarket home delivery it seems perfectly reasonable to me that you pay an additional fee to cover the additional costs.

However, I am aware that there are other online services that charge "service fees" that seem difficult if not impossible to justify and which are only clearly disclosed at the end of the transaction. they should be prominently displayed upfront.

sheramber

Somebody has to physically go round the supermarket to pick your order

If you don’t pay for them who does? The customers who travel to supermarket and pick their own items.

If you don’t like the extra charges don’t use the business.

ameenasha2

https://forums.moneysavingexpert.com/discussion/comment/81985475#Comment_81985475

This is exactly what I was referring to, I agree with this statement too it should be made clearer upfront not at the end point. Thank you :)

ameenasha2

https://forums.moneysavingexpert.com/discussion/comment/81985586#Comment_81985586

easy to make this statement but I have already stated this never being a fee before until recently (1-2 years), who picked and delivered the shopping in the past when there was no fee for this and just a delivery cost?? The business that offered the service obviously…

I agree with your and others comments it’s a conscious choice to be made, but I’m just referring to the fact in the past there was no extra fee for a service like “shopping being picked”, if you ordered via the companies website it was part of the delivery fee, now you still have to pay a delivery fee and a topup service fee.

MattMattMattUK

https://forums.moneysavingexpert.com/discussion/comment/81985457#Comment_81985457

Most of the food delivery services do both, food is marked up and they charge a delivery and handling fee as well. Whilst supermarkets do not do this most proving on Uber Eats, Deliveroo, etc. includes "uplift pricing" somewhere between 20% and 50% on top of the cost of one collected it.

eskbanker

I’m just referring to the fact in the past there was no extra fee for a service like “shopping being picked”, if you ordered via the companies website it was part of the delivery fee, now you still have to pay a delivery fee and a topup service fee

Maybe whichever supermarket you're referring to chose not to levy separate fees as a loss leader initially while building critical mass for its delivery service but has now reached the point where that's no longer viable? Or just found that their previous pricing model wasn't washing its face financially, relative to their expectations?

QrizB

Most of the food delivery services do both ... somewhere between 20% and 50% on top of the cost of one collected it.

See for example this recent thread where the OP is outraged to discover that their £23 bucket'o'chicken turns into a £34 bucket when ordered for delivery.

So you're paying 40% more for cold chicken.

A better idea would be to collect it yourself!

born_again

https://forums.moneysavingexpert.com/discussion/6666785/app-online-ordering-platforms-profiting-by-charging-customers-a-service-fee

Law actually changed recently on this.

They are no longer able to add these at the end. They have to be clear & upfront. Although some retailers have yet to update sites.

https://www.gov.uk/government/publications/price-transparency-cma209/providing-clear-and-accurate-information-about-prices-summary