Consumer advocates criticize the increase use of fees charged on top of the prices for the core products as ploys to empty customer pockets. Our research shows that this criticism is not always justified, and that some fees (such as cancellation fees, restocking fees, nonrefundable shipping and handling fees, and cover charges by restaurants) are necessary to protect firms from opportunistic consumers, and also to protect well-behaved consumers from paying higher prices.
Are Customers Always Right? Fees to Protect Firms from Customer Opportunistic Behavior
ANCARANI, FABIO GUIDO;
2007
Abstract
Consumer advocates criticize the increase use of fees charged on top of the prices for the core products as ploys to empty customer pockets. Our research shows that this criticism is not always justified, and that some fees (such as cancellation fees, restocking fees, nonrefundable shipping and handling fees, and cover charges by restaurants) are necessary to protect firms from opportunistic consumers, and also to protect well-behaved consumers from paying higher prices.
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