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Aussies hit with "hidden fees" for using common payment method

<p>Millions of Aussies have copped up to $1 billion in "hidden fees" for choosing to use one common payment method. </p> <p>Many are unaware about the secret extra charges that come with using the tap-and-go payment method, as millions of customers use it as the preferred way to pay and go. </p> <p>However, according to financial counsellor Scott Pape, also known as The Barefoot Investor, while tapping your card may be easier, it might not be great for your bank account.</p> <p>“What most people don’t know is that, when they tap, their bank generally defaults that payment through Visa or MasterCard, who pays them a fee — instead of defaulting that payment through the much cheaper bank-owned EFTPOS,” Pape said in his column for the <em><a href="https://www.dailytelegraph.com.au/business/barefoot-investor/the-common-smartphone-app-thats-ripping-you-off/news-story/0b71afa29c86faf2b938c44f93bbc8d6?amp" target="_blank" rel="noopener" data-link-type="article-inline">Daily Telegraph</a></em>.</p> <p>While some businesses choose to absorb the cost, others pass it on to the customer as a surcharge, as Pape says, “Talk about a rort.”</p> <p>According to the Royal Bank of Australia (RBA), Visa and Mastercard are generally more expensive for merchants than the EFTPOS network.</p> <p>Payments through EFTPOS are generally about 0.3 per cent of the transaction value, while Debit Mastercard and Visa Debit may cost many some people about 0.5 per cent.</p> <p>Mastercard and Visa credit could cost customers more than 0.75 per cent of the transaction, while American Express card payments are even more, charging merchants 1 to 1.5 per cent.</p> <p>Thankfully, according to Pape, there are ways to avoid paying the extra fees. </p> <p>If your bank card is attached to your smartphone, you can change the default payment setting.</p> <p>“On an iPhone, open ‘Settings’, go to ‘Wallet & Apple Pay’, then tap your debit card,” Pape said.</p> <p>“Then look for ‘Payment Option’. It will generally have ‘MasterCard’ or ‘Visa’ preselected, but instead you should select ‘EFTPOS SAV’.”</p> <p>This is not allowed on all cards, however, and those who use Android will need to check with their bank if a possible solution exists.</p> <div> </div> <p>The other way to avoid paying the surcharges is to just start inserting or swiping your card again.</p> <p>“I know it’s annoying, but if you swipe and insert your card you can choose ‘cheque’ or ‘savings’ and it’ll go through the EFTPOS system, which at the bigger retailers means you’ll be less likely to be charged,” Pape said.</p> <p><em>Image credits: Shutterstock </em></p>

Money & Banking

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Lisa Wilkinson's hefty legal fees revealed

<p>The eye-watering costs of Lisa Wilkinson's legal battle against Bruce Lehrmann after he unsuccessfully sued her for defamation has been revealed.</p> <p>Lehrmann took Wilkinson and her former employer Network Ten to court following the airing of allegations by Brittany Higgins that she was raped in Parliament House in 2019.</p> <p>The defamation suit was lost by Lehrmann in April after Justice Michael Lee found that Lehrmann had, on the balance of probabilities, assaulted Ms Higgins, therefore cannot be defamed for the allegations. </p> <p>Ms Wilkinson has now returned to court in an attempt to recuperate approximately $1.8 million in legal fees from Network 10 after she decided to be represented separately to her former employer. </p> <p>Documents released by the Federal Court on Thursday reveal the eye-watering cost behind Ms Wilkinson’s defence by high-profile defamation lawyer Sue Chrysanthou SC.</p> <p>The documents detail numerous invoices issued to Ms Wilkinson throughout the years-long legal battle; the most recent being an invoice dated May 9th for $405,328.</p> <p>The fee is listed as being for Ms Sue Chrysanthou‘s counsel; similar fees dating back to mid-2023 ranged in size from $10,340 to $97,988 before GST was added.</p> <p>The largest single invoice issued to Ms Wilkinson was dated February 29th 2024 and amounted to a whopping $576,224.72 after GST, which included news subscriptions and lunches. </p> <p>Early costs agreements sent to Gillis Delaney Lawyers, who Ms Wilkinson had retained to represent her, and Ms Chrysanthou quoted fees of $8,000 per day.</p> <p>A range of other expenditures are included in the documents, including thousands of dollars for printing and folders, USB drives, and subscriptions to <em>The Australian</em>.</p> <p>A referee is expected to be appointed for certain items that the Network claims did not come under legal costs, with Justice Lee foreshadowing a similar process for costs being asked of Mr Lehrmann.</p> <p>In earlier written submissions, Network 10 said it did not have to pick up the bill for Ms Wilkinson’s legal costs which were “unnecessarily duplicative or wasteful”.</p> <p>The referee, called for by Network 10, will be tasked with combing through the legal bills incurred by the former <em>The Project</em> host to decide whether the costs were reasonable, and whether she would be compensated.</p> <p><em><span id="docs-internal-guid-ddba61a4-7fff-2ae6-53fc-4cc05f56fefb">Image credits: Steven Markham/Speed Media - MICK TSIKAS/EPA-EFE/Shutterstock Editorial</span></em></p>

Legal

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Cafe targeted online for charging customer a "heating fee"

<p>A cafe in Melbourne has copped a wave of backlash online after allegedly charging a customer to heat up his muffin for breakfast. </p> <p>The disgruntled diner took to Facebook to complain about the extra fee on his $7 muffin at the cafe and claimed the first he knew of it was when he saw it on his receipt.</p> <p>His post went viral with hundreds of people slamming café etiquette and urging him to go to the ACCC.</p> <p>"A f***ing dollar to heat my muffin? It's cr*p like this that just makes you shake your head and question where it is all going," the customer wrote in his original post.</p> <p>The cafe has since hit back at the post, and the angry customer who wrote it, saying the extra charge had been an error despite Heat Standard $1.00 being written on the receipt.</p> <p>They also said the customer could have simply solved the issue in person rather than blasting them online.</p> <p>"We do not nor have we ever charged for any heating of our wonderful baked treats," the café spokesperson told <a href="https://www.dailymail.co.uk/femail/real-life/article-13465591/Melbourne-cafe-targeted-angry-mob-charging-1-heating-fee-muffin-Aussies-reveal-hidden-charges-theyve-hit-amid-cost-living-crisis.html" target="_blank" rel="noopener"><em>Daily Mail Australia</em></a>.</p> <p>"Unfortunately this has become a mountain of an issue that could have easily been resolved without a lynch mob caused by negligence at the hands of an influential keyboard warrior who ironically sells the idea of spiritual life practices and being grounded yet flipped out over a muffin."</p> <p>The original post racked up more than 870 comments before it was deleted, and more than 1,000 reactions.</p> <p>Some of those who saw it went on to slam the cafe by sending them threatening messages, commenting on posts on Instagram and calling their business phone to hurl abuse. </p> <p>"It's a sad world when a local cafe that aims for nothing more then customer satisfaction and community values to be upheld gets threatening messages from rogue vigilantes about wanting to see us go out of business over a muffin being prepared and served to quality standards," the cafe owners said.</p> <p>The cafe responded to the growing backlash online by announcing their muffins would be free on Tuesday.</p> <p class="mol-para-with-font" style="margin: 0px 0px 16px; padding: 0px; min-height: 0px;"><em>Image credits: Facebook / Shutterstock </em></p>

Travel Trouble

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"A little bit steep": Jetstar passenger hit with "wild" excess baggage fee

<p>A Jetstar passenger has been slapped with a "wild" excess baggage fee after her luggage was less than just one kilogram overweight. </p> <p>Monique McCreanor was flying from Melbourne to Sydney after competing in a fitness competition when she was hit with the unexpected fees. </p> <p>Travelling with only carry-on luggage, Ms. McCreanor said she made a mad dash to the airport to catch her flight, only to be stopped at the gate due to the weight of her bag.</p> <p>Because of the prizes she won at the competition, her bag was just 900g over the 7kg limit, and she was issued a $75 fine.</p> <p>Ms. McCreanor took to TikTok to share a warning with other travellers to triple check the weight of your bag, as even being over the limit by mere grams will set you back. </p> <p>“This isn’t a complaint, this is merely just warning you guys,” she said in the clip. </p> <p>“If you do fly with Jetstar on a domestic flight, and your bag is even 100g overweight, you’re going to get charged $75 at the gate for that excess luggage."</p> <p>“Now, this kind of sucks, because I’m like damn, I could have had 15kg in this bag to really make it worthwhile."</p> <p>“I got hit with $75, so just make sure are booking the extra checked baggage, it is better to be safe than sorry, because $75 is a little bit steep for just 900g overweight.”</p> <p>While her video quickly garnered thousands of views, many were left divided in the comments about her complaints. </p> <p>One person sided with the airline, saying, “No sorry, it clearly gives a weight allowance. You went over, you pay.”</p> <p>“Seriously it doesn’t matter who you are with, you will have to pay any way, they are the rules,” another added.</p> <p>Others were quick to empathise, sharing their own experience of encountering excess baggage fees.</p> <p>“They did this to me on my honeymoon... I was p****d,” one person said.</p> <p><em>Image credits: TikTok</em></p>

Travel Trouble

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Restaurant sparks outrage for "ridiculous" fee

<p>As inflation rates continue to rise it is not surprising that restaurants are charging extra fees, but one disgruntled customer was particularly shocked to see this "ridiculous" fee on their bill. </p> <p>The customer, who dined at restaurant and cocktail bar in Georgia, USA shamed the restaurant for charging their customers a $20 fee for “live band entertainment”.</p> <p>They shared their complaints on Reddit with a copy of their receipt and an unexpected fee at the bottom which read: “Two Live Band Entertainment Fee — $20”.</p> <p>Most people in the comments were equally annoyed and called the fee "ridiculous". </p> <p>“This is one of those leave money on the table, hand the waiter a tip and leave, sorry but if I didn’t order it, I’m not paying for it,” one wrote. </p> <p>“Great way to not have repeat customers,” said another.</p> <p>“This will backfire for them, just be honest and upfront," a third added. </p> <p>Other commenters were less sympathetic and did not understand why the customer was complaining when it looked like they could afford it. </p> <p>“When you’re paying seven dollars for a bottle of water, you really don’t get to complain about ‘unexpected costs.’ You knew what you signed up for," one commenter wrote. </p> <p>“Imagine a live band getting paid, huh,” another added. </p> <p>“They’re buying $7 bottles of water, they can probably afford it,” added a third.</p> <p><em>Image: Getty/ Reddit</em></p> <p> </p>

Money & Banking

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Big W customer gobsmacked over $4000 shipping fee

<p>A Big W customer was only trying to buy an outdoor play set for her kids but got the shock of her life when she saw the "ridiculous" shipping fee that was over three times the cost of the play set. </p> <p>The Singleton mum had added the $1,200 item to her cart while shopping online and was about to check out when she was greeted with a $4,466 shipping fee. </p> <p>"How in God's name can they charge $4,466 for delivery! Big W are slowly losing my vote!" the outraged mum wrote on Facebook, even swearing off the department store for the apparent money grab. </p> <p>According to the Big W website, the play set is sent via Plum Play, a "trusted partner", and not by Big W stores, and because the woman lives in a rural area, she initially believed that was the reason for the extortionate shipping costs. </p> <p>A few other shoppers criticised the high fee. </p> <p>"That is fricken ridiculous!!!! No one would pay that," one said. </p> <p>"Jesus, are you ordering a few pallets of bricks? No way normal merchandise would cost that much to send," another wrote. </p> <p>A few others questioned the weight of the item and where she lived, while others tried to buy the same item and got even higher shipping fees. </p> <p>"It jumped a few grand for a couple of ks for me," one wrote, with the cost of standard delivery for the play set at $7,858. </p> <p>Some reported fees of up to $50,000, but most were $7,000 to $10,000. </p> <p>The department store has addressed the issue and told <em>Yahoo News Australia</em> that an "error on the website" was to blame. </p> <p>They have since corrected the delivery charges which should have been about $100 for the woman's location. </p> <p>"We were made aware of a delivery calculation error on our website which has since been resolved. We apologise for any inconvenience this has caused," a spokesperson told the publication. </p> <p><em>Image: Getty</em></p>

Money & Banking

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"No empathy": Grandmother kicked off flight over unpaid fee

<p>An outraged father has unleashed over Jetstar's decision to remove his mother-in-law and children from a flight over an unpaid fee. </p> <p>Father of three Jay Tee took to social media to slam the airline over their treatment of his family on their flight from the Gold Coast to Melbourne. </p> <p>Tee's kids were being accompanied on the flight by their grandmother, who was informed she needed to pay a $35 fee to check in a bag. </p> <p>The woman forgot to pay the fee before boarding, on what was her second time ever on a plane. </p> <p>Tee was then contacted by the airline after his family had boarded and was told they would not be allowed to travel if the charge wasn’t paid for within 10 minutes. </p> <p>“They informed me I had 10 minutes to pay $35 or else they would be removed from the flight extra fees would accur (sic) for holding up the flight,” he said.</p> <p>“I hung up transferred funds and rang back within four minutes. Jetstar did not take payment and had removed my mother-in-law from the flight altogether leaving her and 3 kids stranded at Gold Coast airport no water no food.”</p> <p>The father slammed the airline for “disgusting service” that was “the worst I have ever been treated” by a company.</p> <p>“My anger is not with the payment for luggage, it is how my mother-in-law and three kids under 10 were treated.”</p> <p>The airline confirmed the family were removed from the flight, with a spokesperson saying the airline was trying to contact Mr Tee for more information.</p> <p>“We’re really sorry to hear about the customers’ experience and are reaching out to get a better understanding about what happened,” the spokesperson said.</p> <p>The airline went on to say they had no record of any payment being made, while also clarifying they asked the elderly woman to move to the service desk multiple times to pay the fee, but she didn't.</p> <p>Mr Tee says he was then forced to pay another $600 to book the group on the next flight to Melbourne with discount airline Bonza.</p> <p>The situation stirred up debate on social media, with some blaming the woman for the mishap.</p> <p>“I don’t understand how this is anybody but the mother in laws fault, She would have checked bags in then should have walked over and paid for the excess, not boarded the plane,” one person wrote.</p> <p>But others defended her, and the fact the charge was paid by Mr Tee.</p> <p>“Would have thought Jetstar could have helped in some way, but that sums up Jetstar’s customer service for you. No empathy what so ever.”</p> <p><em>Image credits: Facebook / Getty Images </em></p> <p> </p>

Travel Trouble

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Parents slapped with hefty fee over badly behaved children

<p dir="ltr">Two parents have been slapped with a hefty fine tacked onto their restaurant bill after their children caused a ruckus during dinner. </p> <p dir="ltr">Kyle and Lyndsey Landmann were dining at a restaurant in Georgia, USA, when they were given a $50 fine for their allegedly badly behaved kids. </p> <p dir="ltr">Two weeks after the incident, Kyle took to Google to leave a negative review for the eatery to say he was “disappointed by the experience”. </p> <p dir="ltr">“The owner came out and told me he was adding $50 to my bill because of my children’s behaviour,” he wrote. </p> <p dir="ltr">“My kids watched a tablet until the food arrived, ate their food and my wife took them outside while I waited and paid the bill.”</p> <p dir="ltr">Lyndsey went on to tell <em>Today</em> that her kids were well behaved, although they were joined by other families, with 11 children in total at the table. </p> <p dir="ltr">“The kids were sitting at one end of the table and they were being so good,” Landmann said.</p> <p dir="ltr">“'I even commented halfway through the meal, ‘I can’t believe how well-behaved they are’.”</p> <p dir="ltr">After dinner, restaurant owner Tim Richter approached the table and told the party about the additional charge on the menu, which reads, “Adult surcharge: For adults unable to parent.”</p> <p dir="ltr">“Be Respectful to staff, property, and self. No Respect, No Service.”</p> <p dir="ltr">Landmann said she was expecting a compliment for the well behaved kids, but Richter said there would be $50 added to each bill at their table. </p> <p dir="ltr">When Landmann then asked for an explanation, she claimed Richter told her they were being “too loud”.</p> <p dir="ltr">He was angry that the kids were “running around outside” by the water after dinner, even though they were chaperoned by adults, she clarified.</p> <p dir="ltr">“I was like, ‘They were quiet the whole time’. He got in our faces and told us that we belonged at Burger King and not at his restaurant. We asked to speak to the owner and he said he was the owner,” Landmann explained.</p> <p dir="ltr">“I looked around the restaurant and everybody was frozen watching this show he was putting on. He was yelling.”</p> <p dir="ltr">The 61-year-old restaurant owner said that he implemented the rule during the pandemic, but never actually charged the couple, saying, “We want parents to be parents.”</p> <p dir="ltr">However, several other Google reviews blasted the quality of the service and the owner's attitude, including one that warns diners with children to steer clear.</p> <p dir="ltr"><em>Image credits: Facebook</em></p>

Money & Banking

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An entry fee may not be enough to save Venice from 20 million tourists

<p><em><a href="https://theconversation.com/profiles/sameer-hosany-292658">Sameer Hosany</a>, <a href="https://theconversation.com/institutions/royal-holloway-university-of-london-795">Royal Holloway University of London</a></em></p> <p>Venice’s history, art and architecture attract an estimated <a href="https://www.responsibletravel.com/copy/overtourism-in-venice">20 million</a> visitors every year. The city, a <a href="https://citeseerx.ist.psu.edu/document?repid=rep1&amp;type=pdf&amp;doi=ac36ced945412121372dc892cc31498fb268247c">Unesco World Heritage site</a>, is often crammed with tourists in search of special <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/mar.21665">memories</a>.</p> <p>But for the people who actually live there, this level of tourism has become unsustainable. So from 2024, day-trippers will be charged a €5 (£4.31) fee as part of an <a href="https://www.nytimes.com/2023/09/12/world/europe/venice-tourist-fee-italy.html#:%7E:text=The%20City%20Council%20passed%20an,popular%20but%20equally%20fragile%20place.&amp;text=Starting%20next%20spring%2C%20day%2Dtrippers,5%20euros%20for%20the%20privilege.">attempt</a> to better manage the flow of visitors.</p> <p>The city’s mayor has <a href="https://travelweekly.co.uk/news/tourism/controversial-e5-venice-tourist-tax-finally-approved">described the charge</a> – which will be implemented on 30 particularly busy days in the spring and summer – as an attempt to “protect the city from mass tourism”. It comes after cruise ships were banned from entering the fragile Venice lagoon in 2021.</p> <p>Both policies are designed to respond to the particular problem facing Venice, which is that <a href="https://www.theguardian.com/world/2022/jul/02/venice-day-trippers-will-have-to-make-reservations-and-pay-fee">around 80%</a> of its tourists come just for the day. Research has shown that such a high proportion of day-trippers – who tend to spend little – <a href="https://www.sciencedirect.com/science/article/pii/0160738395000658">pushes</a> a tourist destination <a href="https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1541-0064.1980.tb00970.x">towards decline</a>.</p> <p>So from next year, all travellers to Venice will have to register their visit in advance and obtain a QR code online. Day trippers will then have to pay the fee; visitors staying overnight will not.</p> <p>Other exemptions include children under 14, as well as people who travel to the city for work and study, or to visit family members. To enforce the policy, the municipal police and authorised inspectors will carry out random checks. Anyone without the proper QR code will face a fine of up to €300 (£261).</p> <p>But some have expressed doubts about whether the €5 fee – the price of a coffee or an ice cream – will be enough to dissuade tourists from travelling to this iconic ancient city. One city politician <a href="https://www.nytimes.com/2023/09/12/world/europe/venice-tourist-fee-italy.html">commented</a> that the charge means Venice has become “a theme park, a Disneyland,” where “you get in by paying an entrance fee.”</p> <p>Certainly the charge is a lot less than Bhutan’s (recently reduced) “sustainable development fee” of <a href="https://globetrender.com/2023/09/17/bhutan-woos-more-tourists-reduced-entry-tax/">US$100 (£82) per night</a>, which applies to all tourists, and was introduced to encourage “high value, low impact” tourism. Research also indicates that strategies aiming at persuading tourists to come at less crowded times <a href="https://www.sciencedirect.com/book/9780080436746/seasonality-in-tourism">do not reduce numbers</a> at peak periods, but actually end up increasing overall demand.</p> <h2>‘Veniceland’</h2> <p>But Venice has to try something. For <a href="https://www.mdpi.com/2071-1050/11/24/6937">researchers</a>, Venice is the embodiment of <a href="https://www.cabidigitallibrary.org/doi/book/10.1079/9781786399823.0000">overtourism</a>, and residents clearly suffer from the consequences – living with the congestion, environmental damage and affects on their lifestyle and culture that 20 million visitors can cause.</p> <p>This can then lead to a negative response, known as “<a href="https://www.researchgate.net/publication/348605007_Overtourism_and_Tourismphobia_A_Journey_Through_Five_Decades_of_Tourism_Development_Planning_and_Local_Concerns">tourismphobia</a>”.Another term, “<a href="https://dokufest.com/en/festival/2013/cities-beyond-borders/das-venedig-prinzip-the-venice-syndrome#:%7E:text=The%20film%20shows%20what%20remains,municipal%20council%20with%20scorn%3B%20a">Venice Syndrome</a>” has been used to describe the <a href="https://www.sciencedirect.com/science/article/pii/S0264275123001816#:%7E:text=It%20explains%20the%20data%2Dgathering,between%20urban%20form%20conditions%20and">decline of the city’s</a> permanent population, as citizens feel forced to leave.</p> <p>Venice’s population is around 50,000 and has been consistently falling, from a peak of <a href="https://www.blueguides.com/venice-in-peril/">175,000</a>. If the population falls below 40,000, there is concern that Venice will cease to be a <a href="https://www.responsibletravel.com/copy/overtourism-in-venice">viable living city</a>.</p> <p>Those who remain have often expressed their discontent. Well publicised protests have included the “<a href="https://www.reuters.com/article/us-venice-funeral-idUKTRE5AD1DQ20091114">Funeral of Venice</a>” in 2009, a mock funeral to mourn the sharp drop in population, and “<a href="https://scholarworks.gsu.edu/cgi/viewcontent.cgi?article=1065&amp;context=anthro_theses">Welcome to Veniceland</a>” in 2010, which claimed that Venice was becoming more of a theme park.</p> <p>And while “tourist taxes” <a href="https://www.tandfonline.com/doi/full/10.1080/14616688.2019.1669070">remain popular strategies</a> to address overtourism, their effectiveness remains debatable. Instead, research suggests that a <a href="https://www.tandfonline.com/doi/abs/10.1080/14616688.2019.1669070">combination</a> of specific economic measures (like fees and variable pricing) and non-economic policies (such as educating visitors) is the best option.</p> <p>That combination needs to be specially designed for each destination. There can be no one-size-fits-all solution. A <a href="https://www.e-unwto.org/doi/pdf/10.18111/9789284420070">report</a> by the World Tourism Organisation on overtourism identifies 11 different strategies and 68 measures to manage visitors’ growth in urban destinations.</p> <p>Barcelona, often seen as a city which has done well in handling mass tourism, has successfully used a <a href="https://www.econstor.eu/bitstream/10419/216242/1/CESifo-Forum-2019-03-p20-24.pdf">well targeted approach</a>. This has included harnessing new technology to develop a data driven management system to control visitor flows and overcrowding. It also deliberately engaged with the public when deciding on policies, and came up with specific strategies like limiting the number of new souvenir shops.</p> <p>But it did not resort to charging an entrance fee. Venice will be the first city in the world to do so – and other locations struggling with mass tourism will be keeping a close eye on whether such a bold move turns out to be a success.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/213703/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/sameer-hosany-292658"><em>Sameer Hosany</em></a><em>, Professor of Marketing, <a href="https://theconversation.com/institutions/royal-holloway-university-of-london-795">Royal Holloway University of London</a></em></p> <p><em>Image credits: Getty Images</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/an-entry-fee-may-not-be-enough-to-save-venice-from-20-million-tourists-213703">original article</a>.</em></p>

International Travel

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Junk fees and drip pricing: the underhanded tactics we hate yet still fall for

<p><em><a href="https://theconversation.com/profiles/ralf-steinhauser-1459112">Ralf Steinhauser</a>, <a href="https://theconversation.com/institutions/australian-national-university-877">Australian National University</a></em></p> <p>You see a fantastic offer, like a hotel room. You decide to book. Then it turns out there is a service fee. Then a cleaning fee. Then a few other extra costs. By the time you pay the final price, it is no longer the fantastic offer you thought.</p> <p>Welcome to the world of drip pricing – the practice of advertising something at an attractive headline price and then, once you’ve committed to the purchase process, hitting you with unavoidable extra fees that are incrementally disclosed, or “dripped”.</p> <p>Drip pricing – a type of “junk fee” – is notorious in event and travel ticketing, and is creeping into other areas, such as movie tickets. My daughter, for example, was surprised to find her ticket to the Barbie movie had a “booking fee”, increasing the cost of her ticket by 13%.</p> <p>It seems like such an annoying trick that you may wonder why sellers do it. The reason is because it works, due to two fundamental cognitive biases: the way we value the present over the future; and the way we hate losses more than we love gains.</p> <h2>Present bias preference: why starting over feels too costly</h2> <p>In the case of booking that hotel room, you could abandon the transaction and look for something cheaper once the extra charges become apparent. But there’s a good chance you won’t, due to the effort and time involved.</p> <p>This is where the trap lies.</p> <p>Resistance to the idea of starting the search all over again is not simply a matter of laziness or indecision. There’s a profound psychological mechanism at play here, called a present-bias preference – that we value things immediately in front of us more than things more distant in the future.</p> <p>In their seminal 1999 paper, <a href="https://doi.org/10.1257/aer.89.1.103">Doing it now or later</a>, economists Mathew Rabin and Ted O'Donoghue define present-biased preference as “the human tendency to grab immediate rewards and to avoid immediate costs”.</p> <p>They give the example of choosing between doing seven hours of unpleasant activity on April 1 or eight hours two weeks later. If asked about this a few months beforehand, most people will choose the earlier option. “But come April 1, given the same choice, most of us are apt to put off work till April 15.”</p> <p>In simple terms, the inconvenience and effort of doing something “right now” often feels disproportionately large.</p> <p>Drip pricing exploits this cognitive bias by getting you to make a decision and commit to the transaction process. When you’re far into a complicated booking process and extra prices get added, starting all over again feels like a burden.</p> <p>Often enough, this means you’ll settle for the higher-priced hotel room.</p> <h2>Loss aversion: buying more expensive tickets</h2> <p>Beyond the challenge of starting over, there’s another subtle force at work when it comes to our spending decisions. Drip pricing doesn’t just capitalise on our desire for immediate rewards; it also plays on our innate fear of losing out.</p> <p>This second psychological phenomenon that drip pricing exploits is known as loss aversion – that we feel more pain from losing something than pleasure from gaining the same thing.</p> <p>The concept of loss aversion was first outlined by economists Daniel Kahneman and Amos Tversky in <a href="https://www.jstor.org/stable/1914185">a 1979 paper</a> that is the third most-cited article in economics.</p> <hr /> <figure class="align-center "><img src="https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=497&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=497&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=497&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=624&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=624&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=624&amp;fit=crop&amp;dpr=3 2262w" alt="A graphic representation of loss aversion. The pain from losing a good or service will be greater than the pleasure from gaining the same good or service." /><figcaption><span class="caption">How economists Daniel Kahneman and Amos Tversky graphically represented loss aversion. The pain from losing a good or service is greater than the pleasure from gaining the same good or service.</span> <span class="attribution"><span class="source">Daniel Kahneman and Amos Tversky, Prospect Theory: An Analysis of Decision under Risk, Econometrica, Vol. 47, No. 2</span></span></figcaption></figure> <hr /> <p>Drip pricing exploits this tendency, by dragging us away from more “rational” choices.</p> <p>Imagine you’re booking tickets for a show. Initially attracted by the observed headline price, you are now presented with different seating categories. Seeing the “VIP” are within your budget, you decide to splurge.</p> <p>But then, during the checkout process, the drip of extra costs begins. You realise you could have opted for lower-category seats and stayed within your budget. But by this stage you’ve already changed your expectation and imagined yourself enjoying the show from those nice seats.</p> <p>Going back and booking cheaper seats will feel like a loss.</p> <h2>Do consumers need protection?</h2> <p>Empirical evidence supports the above theoretical predictions about the impact of drop pricing on consumers.</p> <p><a href="https://doi.org/10.1002/mar.21426">A 2020 study</a> quantified how much consumers dislike the lack of transparency in drip pricing (based on tracking the reactions of 225 undergraduates using fictional airline and hotel-booking websites). The authors liken the practice to the “taximeter effect” – the discomfort consumers feel watching costs accumulate.</p> <p>But drip pricing’s effectiveness from a seller’s perspective is undeniable. A <a href="https://doi.org/10.1016/j.jebo.2020.04.007">experimental study</a> published in 2020 found drip pricing generates higher profits while lowering the “consumer surplus” (the benefit derived from buying a product or service). A <a href="https://doi.org/10.1287/mksc.2020.1261">2021 analysis</a> of data from StubHub, a US website for reselling tickets, calculated drip pricing increased revenue by 20%.</p> <p>Which is why the tactic remains attractive to businesses despite customers disliking it.</p> <p>Buyers would benefit from a ban of drip pricing. Many countries are taking steps to protect consumers from drip pricing.</p> <p>The UK government, for example, announced a <a href="https://www.theguardian.com/business/2023/aug/21/growth-of-airlines-add-on-fees-sparks-calls-for-price-reforms">review of drip pricing</a> in June, with Prime Minister Rishi Sunak flagging the possibility of measures to curb the practice. The US government is also considering <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/15/president-biden-recognizes-actions-by-private-sector-ticketing-and-travel-companies-to-eliminate-hidden-junk-fees-and-provide-millions-of-customers-with-transparent-pricing/">new regulations</a>, with President Joe Biden denouncing “junk fees” in his <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/02/07/remarks-of-president-joe-biden-state-of-the-union-address-as-prepared-for-delivery/">2023 State of the Union address</a>. Proposed changes include requiring airlines and online booking services to disclose the full ticket price upfront, inclusive of baggage and other fees.</p> <p>The effectiveness of measures, however, is <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4430453">still being debated</a>.</p> <p>In the meantime, your principal protection is making a more informed decision, by understanding why the tactic works. Bargains may attract you, but you can learn to not fall for hidden costs and align your choices with your budget and values.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/211117/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/ralf-steinhauser-1459112">Ralf Steinhauser</a>, Senior Research Fellow, <a href="https://theconversation.com/institutions/australian-national-university-877">Australian National University</a></em></p> <p><em>Image credits: Getty </em><em>Images </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/junk-fees-and-drip-pricing-the-underhanded-tactics-we-hate-yet-still-fall-for-211117">original article</a>.</em></p>

Money & Banking

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"Unbelievable but true": Tourist outraged over shocking restaurant fee

<p>A tourist in Italy has been hit with a shocking fee from an upscale eatery after he asked for his sandwich to be cut in half. </p> <p>The anonymous man was travelling in Italy's picturesque Lake Como region, and stopped in at Bar Pace in Gera Lario, at the lake’s northern end, for a vegetarian sandwich and fries for lunch. </p> <p>Travelling with a friend, the man asked for the meal to be cut in half so they could share.</p> <p>After polishing off their lunch, the traveller was shocked when he was given the bill, noticing a charge he had never seen before. </p> <p>The man paid without arguing, but later took to TripAdvisor to leave a negative review. </p> <p>“Unbelievable but true,” the man captioned a photo of the receipt on TripAdvisor.</p> <p>The receipt lists the sandwich for €7.50 ($12.60), Coca Cola for €3.50 ($5.90), water for €1.50 ($2.50) and espresso for €1.20 ($2), along with the debated “diviso da meta”, or “cutting in half” fee, amounting to 2 euros, or $3.40.</p> <p>The confused customer gave the restaurant one star on TripAdvisor, far below the average of four and a half stars, based on over 100 reviews.</p> <p>After the review garnered a lot of unexpected attention, the restaurant's owner defended the fee to a local news outlet. </p> <p>“Additional requests have a cost,” owner Cristina Biacchi told <em>La Repubblica</em>.</p> <p>“We had to use two plates instead of one and the time to wash them is doubled, and then two placemats. It wasn’t a simple toasted sandwich, there were also French fries inside. It took us time to cut it in two.”</p> <p>She also noted that the customer did not complain or question the charge and clarified that she would have removed the charge from the bill, if someone had raised an issue. </p> <p>The extra charge is not unheard of in expensive cities and popular tourist destinations, with some cities in the United States are sometimes hitting diners with a share charge, or a split plate charge, to make up for the lower check average at a table, while some New York City eateries even ban the practice of sharing all together.</p> <p><em>Image credit: TripAdvisor</em></p>

Travel Trouble

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Man’s desperate attempt to avoid baggage fees goes viral

<p dir="ltr">One man’s plight to avoid excess baggage fees has been caught on camera and gone viral. </p> <p dir="ltr">In the video, the male passenger can be seen kicking and shoving his bag into the luggage size checker as an airline staffer looked on.</p> <p dir="ltr">The man’s desperate efforts amused those around him, with giggling being heard in the background from fellow travellers, including the person filming.</p> <p dir="ltr">The video, which has now been viewed over 26 million times, was captioned, “Don’t die for EasyJet.”</p> <p>Eventually, the man was able to convince the staff member that his bag was the right size to count as carry-on luggage, only for it to then be stuck inside the metal frame.</p> <div class="embed" style="font-size: 16px; box-sizing: inherit; margin: 0px; padding: 0px; border: 0px; vertical-align: baseline; caret-color: #323338; color: #323338; font-family: Roboto, Rubik, 'Noto Kufi Arabic', 'Noto Sans JP', sans-serif; outline: none !important;"><iframe class="embedly-embed" style="box-sizing: inherit; margin: 0px; padding: 0px; border-width: 0px; vertical-align: baseline; width: 610px; max-width: 100%; outline: none !important;" title="tiktok embed" src="https://cdn.embedly.com/widgets/media.html?src=https%3A%2F%2Fwww.tiktok.com%2Fembed%2Fv2%2F7135000263911329029&amp;display_name=tiktok&amp;url=https%3A%2F%2Fwww.tiktok.com%2F%40hotasfo_o%2Fvideo%2F7135000263911329029&amp;image=https%3A%2F%2Fp16-sign-va.tiktokcdn.com%2Ftos-maliva-p-0068%2Fb9ac55874a8840a382735f0dbbb4f95d_1661246711%7Etplv-tiktok-play.jpeg%3Fx-expires%3D1662991200%26x-signature%3DlT8PTmNwIg0BVzmFm2u%252F1Vfwtc0%253D&amp;key=59e3ae3acaa649a5a98672932445e203&amp;type=text%2Fhtml&amp;schema=tiktok" width="340" height="700" frameborder="0" scrolling="no" allowfullscreen="allowfullscreen"></iframe></div> <p>"He's going to miss his flight trying to get that out," one person quipped in the comments.</p> <p dir="ltr">"Rumour has it he is still trying to get it back out," another joined in.</p> <p dir="ltr">Meanwhile, some thought the staff member was clearly also just having a laugh.</p> <p dir="ltr">"The staff guy was just having a laugh, knowing well what was about to unfold," one person said.</p> <p dir="ltr">Others empathised with the traveller for trying to avoid the extra fees, with one person sharing, "EasyJet made me pay extra for my carry-on pillow, I still haven't recovered from the shock."</p> <p dir="ltr"><em>Image credits: TikTok</em></p>

Travel Tips

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Retirees face exorbitant fees for retirement village upkeep

<p>A group of NSW retirees are facing exorbitant fees for basic upkeep of their retirement village, as they question where their strata money has gone. </p> <p>At Lakes of Cherrybrook in Sydney's north west, mould coats the ceilings and walls and bright orange plastic has been stapled to every roof in the village since April to prevent water coming in.</p> <p>Fifty units, or 75 per cent of the entire complex, are now owned by RSL LifeCare, one is common property and there are 13 units owned by resident strata owners.</p> <p>Last year the residents were informed new roofs were going to be installed, which the strata owners were advised there would be a special levy for. </p> <p>One of the residents, Lesley, said its "unfair" to ask the retirees to front the costs of the repairs. </p> <p>She told <em><a href="https://9now.nine.com.au/a-current-affair/nsw-retirees-face-exorbitant-fees-for-retirement-village/dc08ddfe-21aa-463a-b461-780f5a1f043a" target="_blank" rel="noopener">A Current Affair</a>,</em> "They have the duty of care to look after the place and the people in it."</p> <p>"We didn't come here to do maintenance work, we didn't come here to go to meetings month after month … It's put an awful lot of stress on people."</p> <p>On June 1st, the residents said they were told works would cost more than $7 million, but it looks like that could blowout, as many works are yet to be priced.</p> <p>According to this quote, the residents could be expected to pay up to $200,000 each, when they already pay up to $13,000 on strata fees. </p> <p>According to RSL Lifecare's 2021 financial results, the company has $170 million in the bank, which has left residents questioning why they're the ones who have to pay up.</p> <p>Another resident, Judy, said, "People are deaf, they can't hear what's going on, they don't understand; they get frustrated. It's sad, it's wrong."</p> <p><em>Image credits: A Current Affair</em></p>

Retirement Life

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Woman avoids baggage fees with genius neck pillow hack

<p><span style="font-weight: 400;">While many travellers love to take advantage of cheap airline seats, the deals often come hand in hand with hefty baggage fees.</span></p> <p><span style="font-weight: 400;">One savvy TikTok user has devised a unique way to avoid the extra charges for luggage, using a travel neck pillow. </span></p> <p><span style="font-weight: 400;">The traveller, who shares videos under the name @anayotothe on TikTok, uses the cheap neck pillow as a secret carry-on bag to get out of those pesky extra fees. </span></p> <p><span style="font-weight: 400;">"Trying the Spirit and Frontier pillow hack cuz I ain't tryna pay $60 for a carry on," the woman wrote on the video, referencing two American airlines.</span></p> <p><span style="font-weight: 400;">She captioned the video, “My flight is in three hours let’s see how this goes!”</span></p> <p><span style="font-weight: 400;">The woman picked up the travel pillow for just $9 from the US supermarket Walgreens, and proceeded to take the pillow stuffing out of the case. </span></p> <p><span style="font-weight: 400;">She then stuffed all the clothes that wouldn’t fit in her backpack into the pillowcase, which could still be used to stay comfortable during her flight. </span></p> <p><span style="font-weight: 400;">"Everything fits except for this shirt!" the woman exclaimed, while showing followers her clever technique.</span></p> <p><span style="font-weight: 400;">After sharing the video with her followers, the woman later confirmed that she boarded her flight successfully with her hidden carry-on luggage.</span></p> <p><span style="font-weight: 400;">"On the way to Vegas and the way back, I didn't have to pay, with my travel pillow and my backpack," she said.</span></p> <p><span style="font-weight: 400;">While dozens of people commented to thank the savvy traveller for the tip, others also questioned if it was worth it to save money. </span></p> <p><span style="font-weight: 400;">When questioned about her methods, the woman responded, "It took five minutes, also it was an hour flight… there was no reason I should pay $300 for a flight if you can just take one of the budget airlines."</span></p> <p><em><span style="font-weight: 400;">Image credits: Getty Images</span></em></p>

Travel Tips

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‘Absurd’ fee may see family choose between their home and pet

<p dir="ltr">A Sydney woman who applied for permission to keep her dog in her apartment has left her with a $2000 fee she may have to pay, after she was told of a new bond that could be introduced for pet owners.</p> <p dir="ltr">Georgia Dawson’s two-and-a-half-year-old son Rafy has become devoted to her Staffy named Fav, but she said her family may have to choose between their home and keeping the pair together.</p> <p dir="ltr">“It’s a huge amount of money and it’s very upsetting,” Ms Dawson told<span> </span><a rel="noopener" href="https://www.domain.com.au/news/they-bought-a-puppy-for-their-son-in-lockdown-strata-did-something-absurd-2-1110560/" target="_blank"><em>Domain</em></a>. “We want to stay in our home and we don’t want to be put in a position where we have to choose between our home and our family.”</p> <p dir="ltr">The 32-year-old has been living in the apartment complex in Sydney’s lower north shore with her family for the last seven months, and feels they’re being punished for doing the right thing.</p> <p dir="ltr">“Pets are family for many of us, especially after getting through Covid and maybe not being able to afford another child. But now it feels like we’re being punished - and for doing the right thing and applying for permission,” she said.</p> <p dir="ltr">The family’s shock discovery comes as the latest in the pets-in-apartments saga that has seen legal battles play out between residents wanting to live with their pets, and buildings that want the choice to prevent them.</p> <p dir="ltr">In August, a change in state law made it illegal to forbid pets in strata buildings. The change was the result of a four-and-a-half year litigation between resident Jo Cooper and her Darlinghurst building, Horizon, that saw a blanket ban on pets get overturned.</p> <p dir="ltr">A later judgement by the NSW Civil and Administrative Tribunal (NCAT), however, found that buildings did have the right to charge pet-owners fees of up to $300 to the “administration cost” of applications.</p> <p dir="ltr">But the notification Ms Dawson received, alerting her that her building was debating levying the $2000 bond on pet owners at its January AGM and news that other buildings are considering similar policies, has angered many animal-lovers.</p> <p dir="ltr">Emma Hurst, an Animal Justice Party MP who helped create the pet-friendly legislation, said she is raising concerns about Ms Dawson’s case and pushing for additional regulation.</p> <p dir="ltr">“It is outrageous that strata schemes are attempting to charge huge bonds and application fees in what appears to be an attempt to stop people having an animal in their home,” she said. “It clearly goes against the spirit of the recent changes to strata laws championed by our party.</p> <p dir="ltr">“These were designed to ensure stata complexes are animal-friendly but this is a blatant attempt to get around the new laws, and effectively block people from sharing their home with an animal by making it financially prohibitive. This affects the ability for families to rescue animals in pounds, or for victims of domestic and family violence to seek new accomodation with their companion animals.”</p> <p dir="ltr">Having recently published a review of state strata law, the NSW government has said it has “become aware of some practices that may defeat the purpose of the reforms and produce unjust outcomes”.</p> <p dir="ltr">It has recommended that its Department of Customer Service continues to monitor the use of the new pet-friendly laws to “determine whether further legislative change is necessary” to prevent unfair outcomes.</p> <p dir="ltr"><em>Image: Getty Images</em></p>

Real Estate

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Customer shocked by exorbitant service fee

<p dir="ltr">One customer was taken by surprise after dining at Salt Bae’s new London restaurant, when they were presented with the bill for $60,000 worth of food as well as a $9000 service fee.</p> <p dir="ltr">Salt Bae, whose real name is Nusret Gökçe, recently opened a new restaurant in the ritzy London neighbourhood of Knightsbridge. Diners at the establishment can expect to spend a pretty penny, including $1500 for a tomahawk steak and $55 for fries, but one diner wasn’t expecting a 15% service fee when they were presented with the bill.</p> <p dir="ltr">In addition to the exxy food and drinks, including $18,000 wine, the bill came with a 15% service charge, working out to £4829.10 on top of the £32,194 bill. That’s a charge of about $8933 on top of a $59,327 meal.</p> <p dir="ltr"><img style="width: 434.5156889495225px; height: 500px;" src="https://oversixtydev.blob.core.windows.net/media/7844861/https___prodstatic9net.jpg" alt="" data-udi="umb://media/47ad6063eed94bab9aaef210baf96b52" /></p> <p dir="ltr">The customer shared a photo of the cheque on Snapchat with the caption, “That’s just taking the p*ss”, and the image quickly went viral online, with many wondering how any meal could be worth those kinds of prices.</p> <p dir="ltr">Many critics say Salt Bae is overstepping his markups, which include charging $33 for asparagus and $20 for Red Bull, while others believe the prices, including the service fee, are justified considering the quality of the food and the potential to see Salt Bae do his thing.</p> <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/CUTA32OsX6x/?utm_source=ig_embed&amp;utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/CUTA32OsX6x/?utm_source=ig_embed&amp;utm_campaign=loading" target="_blank">A post shared by Nusr_et#Saltbae (@nusr_et)</a></p> </div> </blockquote> <p dir="ltr">Gökçe originally went viral in 2017 with a video of him sprinkling salt onto a meal getting over 10 million views. He now has almost 40 million followers on Instagram, and his videos of him doing his thing in the kitchen regularly get over 5 million views.</p> <p dir="ltr">With the opening of his London restaurant, Gökçe now owns luxury steakhouses in Miami, New York, Boston, Dallas, and Beverly Hills in the United States; Abu Dhabi and Dubai in the United Arab Emirates; Ankara, Bodrum, Istanbul and Marmaris in Turkey; and Mykonos, Doha, London and Jeddah.</p> <p dir="ltr"><em>Image: Laurent Koffel/Gamma-Rapho via Getty Images</em></p>

Food & Wine

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8-year-old denied life-saving surgery until $1.5 million fee is paid

<p>A Nigerian boy travelled with his parents to the UK for a small surgery then discovered he had cancer but a quirk in the system means the life-saving surgery is out of reach.</p> <p>His parents will be required to pay £885,000 (AU$1,580,000) up front before the NHS can legally operate on him.</p> <p>Nathaniel Nabena had one of his eyes removed in Nigeria in order to treat the cancer and stop its spread.</p> <p>But then in November last year, he travelled to the UK to be fitted with a prostethic eye.</p> <p>The surgery was meant to be quick and painless but the 8-year-old soon fell sick and tests revealed he had leukaemia.</p> <p>Nathaniel desperately needs a stem cell transplant to stay alive, but doctors won’t operate on him until his parents pay the fee - which is so high because patients from non-EU countries are charged 150 per cent of the NHS price for hospital treatment.</p> <p>“If we do not manage to raise the funds, we have been told that hospice care is the next step,” his father Ebisidor wrote on a<span> </span><a rel="noopener" href="https://www.gofundme.com/f/Raise-money-for-Nathaniels-Stem-Cell-Treatment" target="_blank"><em>GoFundMe page</em></a>.</p> <p>Nathaniel has been battling cancer for the past three years, and his parents believed the worst was over before they were hit with the leukaemia diagnosis.</p> <p>He had a myeloid sarcoma under his left eye which caused it to swell up so badly, removal was the only option.</p> <p>Nathaniel is currently in the Croydon University Hospital.</p> <p>Medical practitioners are charging £825,000 to cover their expenses for tests, chemotherapy and a bone marrow transplant.</p> <p>Nathaniel’s dad described his son as “a bright, wonderful child”.</p> <p>“It has been a long, hard journey but we will never stop fighting for Nathaniel. He deserves a life free of cancer,” Ebisidor Nabena said.</p> <p>A Department of Health and Social Care spokesperson told<span> </span><a rel="noopener" href="https://www.mirror.co.uk/news/uk-news/boy-9-diagnosed-leukaemia-uk-23496109" target="_blank"><em>The Sun</em></a><span> </span>in a statement: “Every taxpayer supports the health service and so it is only right that overseas visitors contribute towards their treatment costs.</p> <p>“As the rules stand, NHS care must be paid for in advance of providing non-urgent treatment and any debts that do arise from providing urgent care will be followed up with.</p> <p>“The NHS will always provide high standards of care for those who need it and repayment plans can be agreed with the provider.”</p>

Legal

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Retirement village deferred management fees: Your questions answered

<p dir="ltr">Despite having been the mainstay of Australia’s retirement village industry for decades, deferred management fees remain a poorly-understood and confusing concept for many consumers.</p> <p>In fact, the first time that most consumers hear about deferred management fees is when they consider<span> </span><a rel="noopener" href="https://www.downsizing.com.au/property/sale" target="_blank">moving into a retirement village.</a></p> <p>You won’t be charged a deferred management fee when you buy a general apartment or a house - but you will more than likely be charged such a fee by a retirement village.</p> <p>Deferred management fees come in many shapes and sizes.</p> <p>The advantage of this situation is that consumers can shop around for the best deal, and work with an operator to create a pricing model which suits their needs. </p> <p>The downside, however, is that there can be an overwhelming number of choices and options.</p> <p>However, fear not.</p> <p>Downsizing.com.au has put together the ultimate dummy’s guide to deferred management fees (also known as exit fees or deferred fees).</p> <p><strong>What are deferred management fees?</strong></p> <p>A deferred management fee is a fee you need to pay a retirement living operator when you leave the village. </p> <p>Deferred management fees represent an operator’s return (potentially including profit) from the villages they develop and run.</p> <p dir="ltr"><strong>Why do village operators charge deferred management fees?</strong></p> <p>Deferred management fees are not well-understood, typically because they are such a different pricing model compared to general housing projects.</p> <p>For instance, a typical apartment developer would seek to recover its profit as a percentage of the value of the apartment, when selling it for the first time. The developer then exits the project and allows the apartment owners to manage the complex. </p> <p>However, this scenario is not really suitable when applied to retirement villages, which have a vastly different operating model. </p> <p>This is because:</p> <ul> <li>Charging a set percentage of the dwelling price when a resident moves into a retirement village (using the above model) may be unfair if the resident only stays in the village for a very short time, such as a year or so</li> <li>State legislation can be quite strict about how operators charge monthly fees, with the aim that they recoup their costs but don’t extract a profit. As a result, the deferred management fee model has been developed by the industry to get a return on the project, because they can't get this through monthly fees</li> <li>Unlike the apartment developer example above, retirement village operators both develop the project and then continue to manage the project, which means an apartment style upfront ‘set and forget’ pricing structure may not work.</li> </ul> <p>As a result of the above, the industry has developed the idea of the deferred management fee.</p> <p>The fee is linked to the length of time that the resident stays in the dwelling, which in essence is a fair and reasonable concept. </p> <p dir="ltr"><strong>What are the different types of deferred management fees?</strong></p> <p>Unfortunately, not only are deferred management fees a niche and poorly-understood feature of the retirement village industry, consumers also need to learn about the many different ways that they are charged.</p> <p>The chart below (from the<span> </span><a rel="noopener" href="https://www.propertycouncil.com.au/Web/Content/News/RLC/2019/2019_Retirement_Census_snapshot_report_released.aspx" target="_blank">Property Council of Australia 2019 Retirement Living Census</a>) shows the different ways that operators seek to charge fees, including on either the incoming or outgoing price of the dwelling, and sometimes a portion of capital gain (or loss).</p> <p><img src="https://img.seniorshousingonline.com.au/ed05692cb07d355e5bf4f6c2f2b069121ac45b14" alt="" width="400" height="314" /></p> <p>As you can see from the chart, the most popular way that a deferred management fee is charged is on the incoming contribution, with no percentage charged on the capital gain of the dwelling while the resident has been living there.</p> <p>Some people argue this option provides the greatest certainty, because it means that a person will know the fee they are going to pay, when they sign on the dotted line. This is not possible if the fee is charged on the outgoing price, given this is a future variable.</p> <p>Consumers are also well-advised to carefully read their contract, and shop around, if the operator is proposing to extract part of the fee from the village unit’s capital gain.</p> <p>Although it doesn’t often happen, some contracts have been known to state that the consumer will both pay a portion of the capital gain if the price of the dwelling goes up, but also have to pay a fee to compensate the operator if the value of the dwelling falls. In other words, the consumer pays both ways - no matter what the outcome. </p> <p>There are two schools of thought in relation to operators linking the fee to capital gain.</p> <p>Some consumers, understandably, think they should wholly benefit from any capital gain, just as they would if their family home value increased.</p> <p>In contrast, some operators argue it is actually in the interests of both the consumer and the operator for the fee to apply on capital gain. </p> <p>According to this argument, a fee linked to capital gain ensures that both the resident and the operator are motivated to keep the dwelling and village well-maintained so the dwelling appreciates in value over time.</p> <p><strong>What is the average cost of deferred management fees?</strong></p> <p>As the chart from the Property Council 2019 Retirement Living Census below shows, there are a wide range of deferred management costs. </p> <p><img src="https://img.seniorshousingonline.com.au/81ed1da922543989f76809084b527c85ef37add1" alt="" width="400" height="332" /></p> <p>The maximum fee level typically ranges between 25 and 36 per cent of your home value (noting the different pricing models explained above). So it pays to shop around.</p> <p>What’s more, operators apply this maximum fee in different timeframes.</p> <p>Around half of all villages reach the maximum fee level within six years (noting that the average stay in a retirement village is around 8-9 years). Around one in five however reach the fee within just four years.</p> <p>Obviously, you are more likely to pay more if you sign-up with an operator with a higher fee which applies in a shorter time frame.</p> <p><strong>How do I know what fee option is best for me?</strong></p> <p>Not only do you need to understand what the operator is offering, and shop around, you also need to consider your own financial circumstances.</p> <p>Operators are likely to be willing to reduce the deferred management fee amount, if you pay a higher entry price when you sell your family home and downsize into a retirement village dwelling. </p> <p dir="ltr">This is because they will make money by earning interest when they invest this higher amount, and therefore are willing to forgo a higher fee.</p> <p>The potential advantage of this approach is that, by paying a higher amount, you also won’t have too much spare cash lying around and breach the<span> </span><a rel="noopener" href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/age-pension/how-much-you-can-get/assets-test/assets" target="_blank">pension assets threshold</a><span> </span>(and therefore lose all or part access to the pension). </p> <p>A good financial advisor should be able to help with calculating this.</p> <p>Separately, for some people, an option where they pay a very high fee - in some cases well over 50 per cent - but also a much lower incoming price, is preferable. </p> <p>This is because, without this lower entry price, the residents wouldn’t have been able to move into the village at all. </p> <p>In other words, the deferred management fee is simply a formula - and can be pushed and squeezed in a way which best suits your needs and financial situation. </p> <p><strong>How can I compare and contrast different offers?</strong></p> <p>Fortunately, the Macquarie University has developed a<span> </span><a rel="noopener" href="https://rvcalculator.mq.edu.au/#/calculator" target="_blank">Retirement Village Calculator</a>, which seeks to boil all the above options (and the monthly service charge) into a simple monthly cost. </p> <p>This allows you to compare and contrast different operators and scenarios.</p> <p>In addition, some operators have done away with deferred management fees altogether - see the stories below for more information:</p> <ul> <li><a rel="noopener" href="https://www.downsizing.com.au/news/654/Largest-in-Australia-270m-Canberra-care-centered-village-accepts-its-first-residents" target="_blank">"Largest in Australia": $270m Canberra care-centered vlllage accepts its first residents<span> </span></a>(2020 story)</li> <li><a rel="noopener" href="http://big%20changes%20in%20retirement%20living/" target="_blank">Big changes in retirement living</a> (2018 story)</li> </ul> <p>Also check out this<span> </span><a rel="noopener" href="https://www.downsizing.com.au/news/110/What-you-need-to-know-about-legal-title-in-retirement-villages" target="_blank">expert analysis</a><span> </span>of different sort of legal titles and fee pricing models in NSW retirement villages.</p> <p><em>Written by<span> Mark Skelsey</span>. Republished with permission of <a rel="noopener" href="https://www.downsizing.com.au/news/700/Retirement-village-deferred-management-fees-your-questions-answered" target="_blank">Downsizing.com.au</a></em><em>.</em></p>

Retirement Income

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Bunnings and Westfield launch genius new service with no fees

<p>Bunnings and Westfield have introduced new drive-through services amid the ongoing coronavirus pandemic.</p> <p>Bunnings has launched its contactless service, Drive and Collect, which is now available at 250 of its larger stores across Australia.</p> <p>The new service gives customers the option to order online and pick up their purchase from Bunnings car parks at a convenient date and time. Shoppers text or call the store team on arrival and their items are then brought outside and placed in their car boot.</p> <p>“We’re taking a commonsense approach to finding ways to quickly adapt our business so that we can continue to safely serve our retail customers and enable tradies to keep their businesses running,” Bunnings managing director Mike Schneider told <em><a href="https://www.news.com.au/finance/business/retail/bunnings-westfield-offer-contactless-drivethrough-service-amid-coronavirus/news-story/b5ecf17f2ed8d272783aac990bbc8797">News.com.au</a></em>.</p> <p>“This is just another example of how we are adapting our business to this changing environment and our store teams are doing their best to provide customers with the best service, while keeping everyone safe.”</p> <p>Westfield is also offering a no-contact shop and collect service. Westfield’s parent company Scentre Group announced the new Westfield Direct on Thursday as “a new way for you to buy from your favourite stores and quick eats”.</p> <p>Shoppers are able to purchase items from multiple retailers through the Westfield Direct website and collect the order at the drive-through area.</p> <p>More than 350 retailers – including Harris Farm Markets, Donut King, Aesop and L’Occitane – are available through the service, allowing shoppers to access <a href="https://10daily.com.au/news/australia/a200415zuomk/drive-thru-pick-up-now-available-at-westfield-20200415">up to 8,000 products</a>.</p> <p>“From takeaway food to daily necessities and extras, simply order online, select your pick-up time, and collect your order at our designated drive-thru point – with no booking or delivery fee applied,” the company said.</p> <p>Westfield will also be expanding to other categories and retailers over the coming weeks and months.</p>

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