The Plight of Hidden Costs | Get Financial Freedom Tips


Monday, February 13, 2012

The Plight of Hidden Costs

It's probably safe to say that we've all encountered hidden costs when trying internet shopping - whether it's baggage fees, tax, and debit card surcharges when buying from a budget airline, or postage fees that are three times the cost of the item on an auction site, hidden costs are hard to escape - but it is possible to fight back, if you have the time and energy.

It's not just internet shopping that features hidden costs, either. That "free" iPhone you're getting will end up costing you several hundred pounds more than it would have to buy outright after you're done with the contract, and the service charge added to the bill at some restaurants is far more than the average tip.

Even supermarkets are trying to see what they can get away with when it comes to squeezing more money out of you. If you sometimes find yourself scratching your head and thinking that there's more air than snack product in that tub you just bought, well, that's not your imagination - and it's not a bad batch. Many companies are keeping packaging sizes the same, but putting less of their product into each container, and charging the same amount of money.

How can you fight back?

Well, when it comes to internet shopping, read all of the terms, and pay for your product with the card that carries the lowest fee. You may want to consider using a PayPal account for some purchases too, as some smaller companies prefer PayPal.

With travel companies, take your time going through the checkout process, and make sure you understand all of the terms and conditions. If there's a checkbox, be sure to read the text next to it twice before deciding whether you want to tick the box or not. Some shady companies try to confuse you by having one checkbox asking if you do want something, then another below it asking if you don't want something else! If you slip up, you could end up paying for something you don't want.

You can't avoid taxes, but you can make sure that you don't get caught short because of them. If you're booking flights online, then use a price comparison site to get an idea of the cost of the flight, and look for a retailer that clearly states that taxes are included in the price.

Fortunately, UK shops show full price on the stickers in the store, so shoppers in the UK don't have too much to worry about, but in many other countries, tax is added at the till - and in the USA the tax can vary quite a bit depending on where you are. If you want to make sure you don't get caught in an embarrassing "empty wallet" moment, research sales tax before you travel, and practice rounding up the price in your head. It's better to over-estimate the price and get a pleasant surprise at the till than under-estimate it and hold up the queue while you put something back!

1 comment:

  1. The tax laws in the USA favor the rich. This leaves the poor and middle-class holding the bag for more than their share of taxes.