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July 18, 2008
Handling fee, or manhandled?
Last week I bought a $50 gift certificate for my friend's birthday from her favorite day spa.
As the clerk filled out the certificate, I admired the spa's luxury surroundings. Finished, the clerk said the total would be $51.50.
"What's the extra $1.50 for?"
"The handling fee," she said.
"What kind of handling is involved?"
"Writing out the certificate," she said. "It's labor-intensive." A long pause. "Sorry, I don't make the rules."
Have you ever encountered a "handling fee" on a gift certificate, and what do you think of this spa's use of it?
UPDATE: The owner of the spa has responded in the comments. She says that the fee is for the upgraded gift certificate card and the employee didn't explain that there are card options.
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Manhandled. I am surprised that companies can still get away with charging gift cards at the full face value. I understand the rationale for not charging less, but when someone pays to for a card, that money is already worth less (because it isn't as mobile, liquid, is subject to stupid company rules and price increases, etc.). Just give the $50 next time with a directive where to spend it. Gift cards are lucrative businesses for companies, and they too often take more advantage than they should from their customers.
It probably also has an expiration date, right, or slowly devalues after a number of months? I have not encountered a handling fee previously, but I think I would reconsider my purchase at that point.
I agree with russell. It's a rip-off.
The usual rationalization is that the business who issues the gift certificate has use of your money until the gift certificate is redeemed. And this more than compensates for the effort to issue the certificate, or so one would think.
How unnecessary are these so-called "handling" fees. Just like those random service charges when you buy tickets or anything else... random fees add up just so they can make an extra buck anywhere they can.
I would have asked for the owner or manager and told them why I was not going to buy the gift certificate. Write a personal note and give the $50 to the friend. Why would you want to go to a personal service business that obviously doesn't know the meaning of personal service?
In spirit, I agree it's an unnecessary handling fee.
But it does fly in the face of the business rule "charge for everything". I think it 's a little petty to accuse the spa of ripping someone off. The terms for buying a gift certificate should be clearly explained to the customer before purchase, however.
The questions I have about the fee:
- Is it really for handling?
- Is it to encourage more spending for a GC?
- Is a $1.50 charge really a "rip-off" in a spa?
I have never had to pay a handling fee for a gift certificate. And when I have issued them, I never charged extra. But it does cost me. And for a small business owner, I can guarantee that you're probably not making $1.50 interest on $50 in this economy.
Side notes
- when you buy a gift Visa/Mastercard in the stores, many of them have an activation fee that is essentially a handling fee.
- in many states, expiration dates on gift certificates is illegal.
Seems like a hidden price increase. All that for what might have become a new customer.
Lots of bad publicity from that poor strategic choice IMHO.
I think I'm going to side with the manhandled side. The cost for the receptionist's time and the paper/plastic for the certificate should be already bundled into the spa's charges, into that $50 gift certificate.
Ticketba...I mean, Ticketmaster and other entities have raised the bar of hilarious handling fees. We pay them and they continue to raise them. This is my opinion, but I applaud those places that don't give into following the herd. My local music venue, The National, sells their tickets through Ticketmaster, but, if you go to the box office, you get no fees. Other music venues' box offices are charging small fees.
So let me see if I can get this straight:
You have someone willing to lock her future purchase to your store so your best idea is to throw out another hurdle to jump? Sounds like a Seinfeld episode where Jerry tries to buy a car off a car lot:
PUDDY: I just left out a couple of things - rust-proofing..
JERRY: "Rust-proofing"?
PUDDY: Transport charge, storage surcharge, additional overcharge, finder’s fee
JERRY: "Finder’s fee"? It was on the lot!
PUDDY: Yeah, that’s right.
Manhandled. It surprises me that many folks would tolerate something like this instead of leaving the store. Seems to me the hassle of shopping elsewhere isn't as lingering an annoyance as feeling abused / ripped off would be. Bill Gammell described it perfectly.
Manhandled. That is not a good policy, especially when you picked up the certificate in person. Maybe they would get away with that if it were a mailed certificate but that is just crazy. Clearly this place is focused on small money and small thinking. They are worried about $1.50 when they are creating a negative experience and likely negative word of mouth from each “gift” that is given. That little gain in their eyes is a signal to customers (gift givers even!) that they should take their business elsewhere. The new book from Peppers & Rogers speaks to this view of short-termism and how it destroys business. Crazy. But you are still a nice friend to buy this for someone!
To Jackie and most of the commenters: It's not a ripoff if you agree to pay it. Sorry to sound harsh, but the proper way to respond to this would have been not to buy it. Whining about it afterwards does not help the market operate well. How is that merchant supposed to know that this practice is not well received?
I hate handling fees. I absolutely hate the idea that companies charge extra money for taking payment for their products.
It's an old concept in desperate need of abolishing.
Adam,
Thanks for your comment. The merchant knows that the practice was not well received because I told the clerk that I thought this was a not a customer-friendly policy. I asked her to relay to the owner/manager that I would not probably be back to patronize the spa because of this policy.
Manhandled, for sure.
Companies issue gift certificates eagerly. One of the main reasons is simple profot: many gift cards are never redeemed, for a host of reasons (lost, never get around to shopping there, etc.)
It's just plain insulting to add a $1.50 "handling fee" to a $50 gift card. Who do they think they are - a bank ATM?
Better to charge face value and adjust prices for the service(s), IMHO.
Ugggh. No spell check for blog posting...? PROFIT. lol
For most people, it would have been a lot better received if the clerk had provided prior disclosure of the fee so you weren't surprised at the end.
That said, the clerk's time is sunk cost. If the fee was purely for her time, the fee should not be valid.
definitely a rip off!!! The girl writing out the cert. was already being paid to work there. That is like requiring the receptionist to get a tip for answering the phone! The only good thing was that there wasn't a tax charge on the shipping & handling like so many companies charge now.
I think this is a total rip-off. I would probably not have bought the gift card. It really upsets me how people these days have to be paid for every little thing they do and a lot of them act like its killing them to have to do the service you are paying them to do!! (No one goes out of their way to be kind anymore.) Their salaries should cover things like "handling fees" already. Give me the blank certificate and I'll fill it out myself!! My handwriting is probably better anyway..... sorry to get on the soap box but I'm tired of things like this.
This just seems wrong, the retailer is getting paid in advance for something that may not be used in many cases, or that will buy less in the future. Their cost is to account for this money.
If it is so labor intensive perhaps they need to rethink their process, to make it less labor intensive, they might just find that this will reduce errors and get the customer taken care of faster.
I think that many retailers are forgetting that the customer is the reason for their business, not just someone to take for what ever you can. In California I believe it is illegal to charge for a gift certificate, or to put an expiration date on certificates, except for those issued by banks and credit card companies.
WTF?? :(
Seems like a covered price increase. All that for what might have suit a new customer.
David
They should by paying you $1.50 to use your money rather than charge a $1.50 service fee.
That's the silliest thing I've ever heard and is about as unfriendly of policy a company could create. Obviously the $1.50 isn't the issue, it's the fact they would charge a service fee for something that most companies would be thrilled to sell.
I'd find another dayspa.
Adam,
You are right to a degree, but you really underestimate the power and momentum of social media. Of the more than dozen that commented on this blog, if they are from Austin (and frequent day spas), those will not give biz to that spa and probably prevent another dozen or more from doing so.
Your comment about "whining about it afterwards does not help the market operate well" needs to be clarified b/c it seems a bit unfounded. In answer to your last question, blog comments and the consequent sentiments and actions are what's going to communicate to the merchant that his/her practice is unacceptable. Plus, I wrote them myself (even tho I'm from Chicago) and expressed to them my disapproval for such practices. I encouraged them to make right in order to save face (and save their biz).
