The Philadelphia airport made a decision this year to allow concessions operators to charge passengers more than their posted prices. They’re now allowed to add a 3% surcharge onto whatever you buy.
- This is “to offset the employee wages and benefits” that must be paid to airport workers
- But this is not money that goes to employees.
You might ask, why allow vendors to charge people more than the marked prices, instead of just raising prices?
- The airport doesn’t allow them to raise prices, because they have price caps (“Operators are only permitted to charge up to 15% more than a comparable street-side unit”)
- Vendors who already charge more than comparable stores off-airport aren’t allowed to raise prices
- So they pretend that a surcharge isn’t a price increase
Of course, stores off-airport have been raising prices as the country generally has experienced about 20% inflation over the past four years. Airport vendors have raised prices, too. And since the price cap is based on a percentage over ‘street pricing’ the dollar amount of the gap between outside prices and airport prices has grown, too.
The airport wants to allow prices to rise, but chooses not to allow the percentage gap to grow. They’d rather hide the growth in an opaque ‘surcharge’.
Menu prices appear to be lower than they actually are. The price of an item listed at $10 on the menu is not $10, it is $10.30. How can this be allowed? And by the way you’re asked to tip, too. The 3% is a surcharge, not a service charge.
Ostensibly the reason for the price increases is because of the high minimum wage at the airport – increased to $15.06 plus benefit contribution.
- Wages are part of costs, not price
- This wage is lower than that at numerous airports – even St. Louis.
- Maybe some of the money from the paid water refill stations at the airport could be used for this instead?
Now, each vendor is required to inform customers of the surcharge… but it doesn’t have to be on hanging menu boards for instance, instead just at “point-of-sale register counter cards” and “on all printed receipts” (so you’re told about the surcharge after you’ve already been charged).
Ironically, once the customer sees the total amount they’re likely to tip less to keep the total bill the same, and closer to the level they expected. Tips also often ’round up’ this diverts 3% of the bill away from worker tips and to the concession owner. In other words, this is a way for the airport to mitigate any gains for airport workers from the minimum wage increase.
The Department of Transportation is going after what they view as insufficient disclosure of optional fees charged by airlines. Where are they on mandatory fees charged with purchases at airports?
last in customer satisfaction among large U.S. airports so I guess this is just on-brand.
(HT: Chris T)
The 3% fee is to help maintain its status as the WORST major airport in the United States with the laziest vendor employees
An airport with no bag rooms on game days — any sport.
Just one more reason not to fly into or out of PHL.
Or at least try to not buy anything there
I don’t know about anyone else but this kind of bullshit needs to stop – it is nothing but thievery.
San Diego airport has added 2% employee surcharge since 2020. Ridiculous.
Which political party has been in control of Philly since the 1950s? Voting has consequences.
Thieves!
Interesting. How does the airport and its vendors square this with 73 Pa. Stat. 201-1(xxi), which makes unlawful any practice “that may tend to defraud or mislead a consumer”? The statute allows recovery of treble damages of at least $100 per violation, plus attorney fees. $100 penalty for each undisclosed 3% could add up quickly.
Still less than mandatory “resort fees” or “amenity fees” at hotels. But, businesses can do whatever they want as the US keeps inching closer to unfettered capitalism.
The new term airway robbery comes to mind. One more reason to forget flying via PHL. Next up will be hidden surcharges on flight tickets.
Filthadelphia
That’s my last purchase at PHL. I fly in and out of there frequently.
PHL airport is crazy with prices… But they all are… They got you .. you can take food in and once you’re in… You can’t leave!!!!!!
PHL airport is crazy with prices… But they all are… They got you .. you can’t It’s going to be take food in and once you’re in… You can’t leave!!!!!!
I’ve been tipping less the last few years as prices have gotten out of hand. I’m back to 15% again.
It’s bad enough that this airport is filthy and disgusting. Now adding insult to injury. The only good thing about this airport is the precheck TSA line.
As much as people complain (and I’m one of them) these additional charges for credit card transactions or other reasons will likely spread. While I don’t agree with ANY surcharge, and feel (a) just raise your prices and (b) credit cards help a business since easier to handle than cash and people spend more if charging, it is one thing for small independent shops to add it. The Audi dealership in Charlotte now charges 3% credit card fee for all transactions (including multi thousand $ services). BTW this is part of a large multi-billion $ group. Just traded both Audis so I don’t have to deal w that.
However (and I fully realize this story is an across the board 3% not simply for cards) I fully expect Congress to either cut exchange fees or the majority of businesses across the board to add a 3% charge within the next couple of years. That would essentially be the end of the points/miles game plus the many bloggers that benefit from it.
Been a good run but I see the day soon when I cancel practically all my cards and pay primarily w cash, debit or bank transfer. People can while all they want. But it is coming
BTW – thank you Brandon (you demented, feeble old man) for the inflation. November can’t come soon enough to get our great country moving in the right direction again without catering to every fringe group and environmental concern. Thank God SCOTUS knew capped the administration this week with 2 key rulings favoring business against government attorneys and pencil neck administrators
The word for this is “fraud.”
What a scam. I’m surprised that this is legal. It’s certainly wrong.
I hadn’t flown in/out of PHL in a few years and was disappointed in how run down and broken down the airport appeared. Very concrete and cold.
I went to purchase a coffee and saw the employee “tax” and just laughed. Why can’t places just be honest and tell you how much you are being charged. I’m sure, just as resort fees, baggage fees, etc. are now the new norm that the employee “fees” will become the norm at all airports shortly.
@AC Yes, every fringe group, like MAGA. Who are made up of a mix of elites OR those who think they may one day be so because Trump is going to lift them up. Yawn.
I’m so sorry that your new German luxury vehicle came with a surcharge of 3% for credit card use. It’s a car. It’s a lot of money. Are you really so oblivious? And the margins on cars is minimal in such that if you want the best deal pay cash. As you did with trade-ins. problem solved. You want points? Fly. If the airlines want to give you points for a car purchase you are the sucker to think that other companies will absorb this cost.
This article is about people having to pay 3% on top of food or water purchases at PHL. And you are rambling on about your new Audi and having to pay a surcharge for CC. After, even worse, somehow blaming it on Biden. Why don’t you blame corporate greed? Is that so hard? Certainly a better reach given that this administration has been fighting to remove junk fees and consumer gouging. But no, you ramble on about your Audi purchase. Talk about out of touch.
They do something like this at LAX, too. At LAX most restaurants, such as Planet Hollywood Express, automatically add a 15% “Gratuity” to the bill. Then the buttheads have the nerve to add a line where you are expected to add a tip.
I don’t care what the excuse is. Any time they add anything other than a legitimate government mandated tax to the cost of goods or services means I leave a tip of precisely 0$. No exceptions whatsoever.
Further, any time the bill contains fees that are not clearly listed on the menu will result in a credit card chargeback.
@
J. C., although LAX is the start or finish of almost all of my long trips, I almost never eat there. The last time I ate there was at an Asian food place outside of security in the Tom Bradley Terminal (my wife knew people working there at the time). I wonder if they also add 15% now. It was a cafeteria style place.
This is at the same airport where AA does not have catering for certain flights. These two issues together seem to mean that passengers are more likely to feel the need to make a purchase with this surcharge.
The airport aside, tipping and business surcharges are out of control.
I called my local Chinese take-out here in Trooper. PA for a quart of house special wonton. When I picked up, the bag is stapled shut with the check containing a 20% “tip” I never authorized on the phone. I asked about it and was told it was for “service.” This meant 20% extra to put the soup in a bag and walk it 15 feet to the counter.
I will always tip for capable wait service but never participate in business owner’s extortion.
I walked out and will never return again.
Well, it’s deregulation: exactly what the right is telling us it is, businesses free to do what they want.
In case you didn’t realize, deregulation causes inflation (in this case, 3% just this year).
Disgusting airport. Among my least favorites.
@Jake “In case you didn’t realize, deregulation causes inflation.” In case you didn’t realize it, you have completely exposed your poor understanding of some basic economics. If you need evidence, I ask the following: did airfare go up or down when airline deregulation occurred? No true scholar would draw conclusions from one observation, though. But, add solid economic theory and a massive amount of conforming data. . .
“In case you didn’t realize, deregulation causes inflation.”
That’s not the argument. Government can’t keep it’s own house in order. Look at Congress, look at the entitlement programs. They are totally out of control. Every one of them. No system is 100% perfect. But that last thing any of us needs is people who can’t manage their own affairs, who have a long standing low, teens approval rating, more involved in our daily lives. Sadly a large segment of our population has not learned that yet.
MSP airport has been doing this for years. Outrageous
When you use these automated tip calculators like 10%|15%|20% on Uber and DoorDash and I’ve seen it on kiosks as well they are calculated on top of taxes and fees which can be significant. So it’s closer to 15%|22%|30% as the amounts are compounding.
Just don’t buy anything there.
We go to Philly often and just use the AA Lounge. Problem solved
@GaryLeff, with so many places tacking on 3% to cover the exchange fee, doesn’t this effectively wipe out the rewards benefits we earn on cards since we are now effectively paying for the points we used to get for free?
Most of us have known that PHL and the entire city are nothing more than a restroom stop between
DC and New York. Low class city. No Class businesses. Just stay away.
@Joe Jackson – this is not a card fee, the fee applies for cash payments too, it’s just a surcharge so vendors charge everyone more than listed prices.
That’s also the case in FLL, where you are told at the counter about a 3% airport surcharge for card payments. Non sense
Very poorly run airport! Always has been… My husband, an AA pilot, flies out of PHL, and he NEVER buys anything there. The products are poor, everything overpriced, and now PHL management wants more… How about running a decent airport instead of screwing people? Atif Saeed, PHL CEO, earns 335K/yr+, and isn’t worth anything close to that. It has been a pathetic airport for years – which is even worse, given that Philly is the 6th largest city in the USA!
I’m not participating. Everyone’s tip at PHL just got 3% less. Oh well.
I always carry enough healthy snacks in my carry on to avoid buying meals at any airport.
St. Louis Lambert Airport is owned and operated by the progressives in the City of St. Louis. The airport actively helps women and minorities become qualified contract bidders. As such bidders, contract bids are adjusted downward by 11%. Contracts bids for services mandate employees must be paid prevailing wages and benefits, i.e. union, or higher wages if no benefits are provided. Vendors also must post prices that reflect a percentage increased over local prices.
There is a plan to expand Lambert. Afterward, I assume prices will jump. The NYC Port Authority is forcing vendors at the three airports to pay employees over $25 in two years. Expect airlines ticket prices to increase.