Fee
Encyclopedia
A fee is the price
one pays as remuneration
for services. Fees usually allow for overhead
, wage
s, cost
s, and markup
.
Traditionally, professionals in Great Britain
received a fee in contradistinction to a payment
, salary
, or wage, and would often use guineas rather than pounds
as units of account
. Under the feudal system, a Knight's fee
was what was given to a knight for his service, usually the usage of land.
A contingent fee
is an attorney's fee
which is reduced or not charged at all if the court case is lost by the attorney
.
A service fee, service charge, or surcharge is a fee added to a customer's bill. The purpose of a service charge often depends on the nature of the product and corresponding service provided. Examples of why this fee is charged are: travel
time expenses, truck
rental fees, liability and workers' compensation
insurance
fees, and planning
fees. UPS
and FedEx
have recently begun surcharges for fuel
.
Restaurant
s and banquet halls charging service charges in lieu of tips must distribute them to their wait staff in some U.S. state
s (e.g., Massachusetts
, New York
, Montana
), but in the State of Kentucky may keep them.
A fee may be a flat fee or a variable one, or part of a two-part tariff
.
A membership fee is charged as part of a subscription business model
.
s, an activation fee is commonly assessed, although most companies fail to include it in the advertised price, and activation
means only typing some customer information into a computer
. For example, , Verizon Wireless
has begun charging 20 dollars for activation of its phones, even for existing customers who want to upgrade
. Customers are told that the phones can be returned or exchanged within 15 days, but are not told that the extra fee (which has been disclosed only in fine print
) will not be returned, and that yet another fee will assessed against him or her for getting a different new phone, or even going back to their old one.
Another fee is the early-termination fee applied nearly-universally to cellphone contract
s, supposedly to cover the remaining part of the subsidy
that the provider prices the phones with. If the user terminates before the end of the term, he or she will be charged, often well over 100 dollars. In the U.S., mobile phone companies have come under heavy criticism for this anti-competitive practice, and the Federal Communications Commission
(FCC) is considering limits to prevent price gouging
, such as requiring the fees to be prorated.
Many cable TV and telephone companies, including AT&T, include a regulatory-cost recovery fee in the bill
each month of around three U.S. dollars, passing the blame
onto government
regulation
, and essentially charging their customers for complying with U.S. law.
, fees for having an account balance under a required amount. Some banks charge a fee for using tellers in an effort to encourage customers to use automated services instead.<ref></ref> The fees have come in for criticism as excessive from consumer advocates. They have also targeted banks practices the maximize the assessment of fees and fees that can add up to many times the amount of small transactions.
U.S. banks extract fees from automatic teller machine transaction
s that are made at rival banks, even if the customer's home bank has no branch in a particular area (such as when the customer is on vacation
). Customers are sometimes charged twice, both by the bank that owns the ATM, and again by their bank. Bank of America
charges a denial fee, literally a fee for refusing service to the customer (if there are insufficient funds or a daily limit), and a fee to simply check the account balance at a "foreign" (other bank's) ATM.
Following the 2008 financial crisis and legislation passed by Congress, banks have modified many credit card
agreements with customers sometimes increasing interest rate
s or reducing credit limits.
Registration with MasterCard/Visa are required for merchants processing convenience fees.
MasterCard Convenience Fee Rules
MasterCard states that any convenience fee must comply with the following:
• Must be properly disclosed to the cardholder in advance
• Cannot discriminate against or discourage use of the MasterCard cards or brand in favor of any payment acceptance brand deemed by MasterCard to be a competitive brand, including American Express, Discover, and Visa
• Does not have to be assessed on cash, check, automated clearinghouse (ACH), or personal identification number (PIN) based debit payments
• Can be assessed as either a flat per transaction fee, a variable or tiered rate fee based on the amount owed, or a fixed percentage of the amount owed.
The merchants segments allowed to charge convenience fees under MasterCard rules are listed here:
• Elementary and secondary schools for tuition and related fees and school- maintained room and board
• Colleges, universities, professional schools and junior colleges for tuition and related fees and school-maintained room and board
• Local, state and federal courts of law that administer and process court fees, alimony and child support payments
• Government entities that administer and process local, state and federal-fines
• Local, state and federal entities that engage in financial administration and taxation
• Government services - merchants that provide general support services for the government
Additionally, MasterCard (unlike Visa) will permit a variable convenience fee to be assessed in connection with Debit MasterCard® transactions in card acceptor business code (MCC) 9311—Tax Payments.
This provision allows, for example, a percentage-based convenience fee to be assessed for Debit MasterCard transactions using MCC 9311, even if a fixed or ad valorem convenience fee is assessed for a similar transaction on a competitive debit card. This allows the merchant to recoup processing costs based on the amount of the transaction.
General MasterCard/Visa Rule
Pg 5-20
http://www.mastercard.com/us/merchant/pdf/BM-Entire_Manual_public.pdf
Visa Convenience Fee Rules
http://usa.visa.com/download/merchants/visa-international-operating-regulations-main.pdf
Page 486
Visa convenience fee rules are more restrictive than MasterCard, as follows:
- The convenience fee must be a bona fide convenience in the form of an alternate payment channel, and must apply to all forms of payment in the alternate payment channel
- The convenience fee applies only to non face-to-face transactions
- The convenience fee must be disclosed to the cardholder and must allow the cardholder to cancel the transaction
- The convenience fee must be a fixed or flat payment amount
- The convenience fee must be included in the total amount of the transaction
The following is applicable only for the Visa Tax Payment Program:
- The convenience fee must be charged by the merchant, and must not be a third party to the transaction
- The convenience fee may not be a recurring transaction
A Visa merchant that accepts solely mail/phone order transactions may not charge a convenience fee.
Unlike MasterCard, Visa allows a convenience fee only if the merchant offers “an alternate payment channel” that provides a convenience to the cardholder. The most common example is a merchant that accepts face-to-face transactions with no convenience fee, but allows payment over the internet with a convenience fee.
Also, note that Visa allows only a fixed or flat convenience fee payment amount, unlike MasterCard which allows a variable fee.
space or other things. In the case of self-storage businesses, this negates claims of "only one dollar for the first month" made by Public Storage
and others. Apartment
complexes often charge fees for pet
s (mainly dog
s and cat
s). Some complexes euphemisitic
ally call these a non-refundable deposit, ignoring the definition of a deposit
as inherently being refundable.
collects a variety of fees in the course of handling the purchase of a house at a closing (real estate)
. These may include fees for tax service, flood certification, underwriting
, appraisal
, credit report, record deed, record deed trust, loan signing and processing.
s, online reservations and payments, and other transactions, there is sometimes a service charge (often called a convenience fee) that serves as additional compensation for the company facilitating the transaction. Ticketmaster
and others charge this, and have made a business model
of it. However, such groups have a monopoly
on particular events or even entire concert venues.
s have long charged fees for changing flight
s, and for excess luggage
. However, with the oil price increases since 2003, many are increasing fees. In May 2008, it was announced that some would be charging even for just one checked bag, making it nearly impossible to avoid. Airlines have also invented fees for nearly every "service" that has always previously been included in the ticket price. While the extra income may be necessary to prevent bankruptcy
, the practice of not including mandatory fees in the stated price is deceptive.
Airport
s also charge landing fee
s to airlines in order to cover costs, particularly airport security
.
representative. DirecTV
charges this when ordering a pay-per-view
movie via telephone instead of through the set-top box
. Some companies charge for technical support
, either prepaid or by using a premium-rate telephone number
(such as the 1-900 numbers in North America). In the 2000s, some bank
s in the U.S. began charging a fee just to visit a teller
, prompting such customer anger that the banks were forced to back down.
.
. These are supposedly intended to get people to pay rent or other charges on time, but these are sometimes exorbitant, or extremely out of proportion to the amount of money which is late. They can also add insult to injury for people who have hit hard financial times, making their situation worse. When added to credit card bills or check card
statement
s, it may also cause an overlimit or NSF fee, creating an endless and inescapable cycle of fees that trigger other fees for people aleady stretched to their financial limit.
and Sam's Club
, where membership dues have not been paid.
There are a few other "cost-plus" stores, however, that add ten percent or so at checkout, using the lower shelf price to trick consumers into erroneous comparison shopping. At Food Depot and other smaller low-end chain stores like this, the shelf price may be 1.95, when the shopper
will actually be charged 2.15 in the end, in a sort of legalized bait and switch
. (Furthermore, a disclaimer
indicates the shelf price is not even the actual cost to the store.)
before it expires. One example is when a renter leaves an apartment before a year-long contract is over. If tenants rent for a shorter period, or month-to-month, they are instead charged significantly more per month, and are often denied any promotional
deal
s. Mobile phone
companies in the U.S. are notorious for huge early-termination fees, typically starting at 175 dollars, and falling by only a few dollars per month, no matter the actual cost
of or subsidy
to the phone.
Some mortgage
companies also charge early payment penalties if the homeowner pays more than is due in order to reduce the interest
owed and to shorten the remaining term of the loan
. The fees typically negate this advantage at least in part.
There are also fees charged for any type of termination. In the suburban Atlanta
county of Gwinnett for example, customers were hit with termination fees of over 23 dollars when the county commission
chose not to renew the contracts of the county trash collectors in November 2008. The two companies charged this both in violation of county law
and in breach of contract
.
is a charge which a developer must pay to local government
, in order to raise money for capital improvements to road
s, libraries, and other services upon which the new land development
places a burden. This prevents existing residents from being forced to pay in tax
es, in addition to already having to put-up with the traffic
, noise
, and environmental damage of the new development.
is that a fee is paid for specific goods or services rendered by the government, while a tax has no connection to the benefits received for an individual.<ref>Taxes versus fees</ref>
. This is most common for national park
s, and often also state park
s or provincial park
s, and for privately-owned areas.
and building permits, rezoning
, and land grading
(which causes silt
); and sometimes for increasing stormwater
runoff, destroying native vegetation
, and cutting-down healthy tree
s.
what are actually penalties or tax
es. For example, Virginia's now-repealed Civil Remedial Fees
were actually a tax on drivers with certain kinds of traffic law violations.
s, student
s are charged tuition
and matriculation
, when can themselves be considered fees charged per credit hour. However, the term student fees typically refers to additional charges which the student is required to pay, typically no matter how many hours the student is taking in the academic term
.
Commonly this is a student activity fee, which helps to fund student organisations, particularly those which are academic in nature; and those which serve all students equally, like student government and student media. A newer fee is the technology fee, which is often charged to students by schools when state government
funding fails to meet needs for computer
s and other classroom technology. Students may also be charged a health
fee which usually covers the campus nurse, and possibly a visit to a local clinic
if the student is ill
.
Parking
fees are normally optional, because students may not have their own automobile
s. However, many U.S. schools are now forcing meal plans on their students, particularly those that stay in dorms, and some force freshmen to stay in the dorms. Generally, all fees except parking are covered under scholarship
s, whether they are from private, government, or lottery
funds. However, at least one U.S. state (Georgia
) began denying HOPE Scholarship
money for any new fees added, even by its own state schools.
Price
-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
one pays as remuneration
Remuneration
Remuneration is the total compensation that an employee receives in exchange for the service they perform for their employer. Typically, this consists of monetary rewards, also referred to as wage or salary...
for services. Fees usually allow for overhead
Overhead (business)
In business, overhead or overhead expense refers to an ongoing expense of operating a business...
, wage
Wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...
s, cost
Cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this...
s, and markup
Profit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
.
Traditionally, professionals in Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
received a fee in contradistinction to a payment
Payment
A payment is the transfer of wealth from one party to another. A payment is usually made in exchange for the provision of goods, services or both, or to fulfill a legal obligation....
, salary
Salary
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis....
, or wage, and would often use guineas rather than pounds
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
as units of account
Unit of account
A unit of account is a standard monetary unit of measurement of value/cost of goods, services, or assets. It is one of three well-known functions of money. It lends meaning to profits, losses, liability, or assets....
. Under the feudal system, a Knight's fee
Knight's fee
In feudal Anglo-Norman England and Ireland, a knight's fee was a measure of a unit of land deemed sufficient from which a knight could derive not only sustenance for himself and his esquires, but also the means to furnish himself and his equipage with horses and armour to fight for his overlord in...
was what was given to a knight for his service, usually the usage of land.
A contingent fee
Contingent fee
A contingent fee or conditional fee is any fee for services provided where the fee is only payable if there is a favourable result...
is an attorney's fee
Attorney's fee
Attorney's fee is a chiefly United States term for compensation for legal services performed by an attorney for a client, in or out of court. It may be an hourly, flat-rate or contingent fee. Attorney fees are separate from fines, compensatory and punitive damages, and from court costs in a...
which is reduced or not charged at all if the court case is lost by the attorney
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
.
A service fee, service charge, or surcharge is a fee added to a customer's bill. The purpose of a service charge often depends on the nature of the product and corresponding service provided. Examples of why this fee is charged are: travel
Travel
Travel is the movement of people or objects between relatively distant geographical locations. 'Travel' can also include relatively short stays between successive movements.-Etymology:...
time expenses, truck
Truck
A truck or lorry is a motor vehicle designed to transport cargo. Trucks vary greatly in size, power, and configuration, with the smallest being mechanically similar to an automobile...
rental fees, liability and workers' compensation
Workers' compensation
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence...
insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
fees, and planning
Planning
Planning in organizations and public policy is both the organizational process of creating and maintaining a plan; and the psychological process of thinking about the activities required to create a desired goal on some scale. As such, it is a fundamental property of intelligent behavior...
fees. UPS
United Parcel Service
United Parcel Service, Inc. , typically referred to by the acronym UPS, is a package delivery company. Headquartered in Sandy Springs, Georgia, United States, UPS delivers more than 15 million packages a day to 6.1 million customers in more than 220 countries and territories around the...
and FedEx
FedEx
FedEx Corporation , originally known as FDX Corporation, is a logistics services company, based in the United States with headquarters in Memphis, Tennessee...
have recently begun surcharges for fuel
Fuel
Fuel is any material that stores energy that can later be extracted to perform mechanical work in a controlled manner. Most fuels used by humans undergo combustion, a redox reaction in which a combustible substance releases energy after it ignites and reacts with the oxygen in the air...
.
Restaurant
Restaurant
A restaurant is an establishment which prepares and serves food and drink to customers in return for money. Meals are generally served and eaten on premises, but many restaurants also offer take-out and food delivery services...
s and banquet halls charging service charges in lieu of tips must distribute them to their wait staff in some U.S. state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
s (e.g., Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, Montana
Montana
Montana is a state in the Western United States. The western third of Montana contains numerous mountain ranges. Smaller, "island ranges" are found in the central third of the state, for a total of 77 named ranges of the Rocky Mountains. This geographical fact is reflected in the state's name,...
), but in the State of Kentucky may keep them.
A fee may be a flat fee or a variable one, or part of a two-part tariff
Two-part tariff
A two-part tariff is a price discrimination technique in which the price of a product or service is composed of two parts - a lump-sum fee as well as a per-unit charge. In general, price discrimination techniques only occur in partially or fully monopolistic markets...
.
A membership fee is charged as part of a subscription business model
Subscription business model
The subscription business model is a business model where a customer must pay a subscription price to have access to the product/service. The model was pioneered by magazines and newspapers, but is now used by many businesses and websites....
.
Telecom
For telecommunications services such as high-speed Internet and mobile phoneMobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
s, an activation fee is commonly assessed, although most companies fail to include it in the advertised price, and activation
Activation
Activation in chemical sciences generally refers to the process whereby something is prepared or excited for a subsequent reaction.- Chemistry :...
means only typing some customer information into a computer
Computer
A computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...
. For example, , Verizon Wireless
Verizon Wireless
Cellco Partnership, doing business as Verizon Wireless, is one of the largest mobile network operators in the United States. The network has 107.7 million subscribers as of 2011, making it the largest wireless service provider in America....
has begun charging 20 dollars for activation of its phones, even for existing customers who want to upgrade
Upgrade
The term upgrade refers to the replacement of a product with a newer version of the same product. It is most often used in computing and consumer electronics, generally meaning a replacement of hardware, software or firmware with a newer or better version, in order to bring the system up to date...
. Customers are told that the phones can be returned or exchanged within 15 days, but are not told that the extra fee (which has been disclosed only in fine print
Fine print
Fine print, small print, or "mouseprint" is less noticeable print smaller than the more obvious larger print it accompanies that advertises or otherwise describes or partially describes a commercial product or service...
) will not be returned, and that yet another fee will assessed against him or her for getting a different new phone, or even going back to their old one.
Another fee is the early-termination fee applied nearly-universally to cellphone contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
s, supposedly to cover the remaining part of the subsidy
Subsidy
A subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
that the provider prices the phones with. If the user terminates before the end of the term, he or she will be charged, often well over 100 dollars. In the U.S., mobile phone companies have come under heavy criticism for this anti-competitive practice, and the Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
(FCC) is considering limits to prevent price gouging
Price gouging
Price gouging is a pejorative term referring to a situation in which a seller prices goods or commodities much higher than is considered reasonable or fair. In precise, legal usage, it is the name of a crime that applies in some of the United States during civil emergencies...
, such as requiring the fees to be prorated.
Many cable TV and telephone companies, including AT&T, include a regulatory-cost recovery fee in the bill
Accounts receivable
Accounts receivable also known as Debtors, is money owed to a business by its clients and shown on its Balance Sheet as an asset...
each month of around three U.S. dollars, passing the blame
Blame
Blame is the act of censuring, holding responsible, making negative statements about an individual or group that their action or actions are socially or morally irresponsible, the opposite of praise. When someone is morally responsible for doing something wrong their action is blameworthy...
onto government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
regulation
Regulation
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...
, and essentially charging their customers for complying with U.S. law.
Banking
Bank fees are assessed to customers for various services and as penalties. There are unauthorised overdraft fees, ATM usage feesATM usage fees
ATM usage fees are the fees that many banks and interbank networks charge for the use of their Automated Teller Machines . In some cases, these fees are assessed solely for non-members of the bank; in other cases, they apply to all users...
, fees for having an account balance under a required amount. Some banks charge a fee for using tellers in an effort to encourage customers to use automated services instead.<ref></ref> The fees have come in for criticism as excessive from consumer advocates. They have also targeted banks practices the maximize the assessment of fees and fees that can add up to many times the amount of small transactions.
U.S. banks extract fees from automatic teller machine transaction
Financial transaction
A financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.-History:...
s that are made at rival banks, even if the customer's home bank has no branch in a particular area (such as when the customer is on vacation
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
). Customers are sometimes charged twice, both by the bank that owns the ATM, and again by their bank. Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
charges a denial fee, literally a fee for refusing service to the customer (if there are insufficient funds or a daily limit), and a fee to simply check the account balance at a "foreign" (other bank's) ATM.
Following the 2008 financial crisis and legislation passed by Congress, banks have modified many credit card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
agreements with customers sometimes increasing interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
s or reducing credit limits.
MasterCard and Visa Convenience Fee Rules & Policies
Over the last several years MasterCard and Visa have liberalized their rules regarding convenience fees charged by merchants. The card associations, especially MasterCard, have encouraged new avenues of card acceptance by allowing merchant to charge these fees. In general, convenience fees are prohibited by MasterCard/Visa except in the situations described below.Registration with MasterCard/Visa are required for merchants processing convenience fees.
MasterCard Convenience Fee Rules
MasterCard states that any convenience fee must comply with the following:
• Must be properly disclosed to the cardholder in advance
• Cannot discriminate against or discourage use of the MasterCard cards or brand in favor of any payment acceptance brand deemed by MasterCard to be a competitive brand, including American Express, Discover, and Visa
• Does not have to be assessed on cash, check, automated clearinghouse (ACH), or personal identification number (PIN) based debit payments
• Can be assessed as either a flat per transaction fee, a variable or tiered rate fee based on the amount owed, or a fixed percentage of the amount owed.
The merchants segments allowed to charge convenience fees under MasterCard rules are listed here:
• Elementary and secondary schools for tuition and related fees and school- maintained room and board
• Colleges, universities, professional schools and junior colleges for tuition and related fees and school-maintained room and board
• Local, state and federal courts of law that administer and process court fees, alimony and child support payments
• Government entities that administer and process local, state and federal-fines
• Local, state and federal entities that engage in financial administration and taxation
• Government services - merchants that provide general support services for the government
Additionally, MasterCard (unlike Visa) will permit a variable convenience fee to be assessed in connection with Debit MasterCard® transactions in card acceptor business code (MCC) 9311—Tax Payments.
This provision allows, for example, a percentage-based convenience fee to be assessed for Debit MasterCard transactions using MCC 9311, even if a fixed or ad valorem convenience fee is assessed for a similar transaction on a competitive debit card. This allows the merchant to recoup processing costs based on the amount of the transaction.
General MasterCard/Visa Rule
Pg 5-20
http://www.mastercard.com/us/merchant/pdf/BM-Entire_Manual_public.pdf
Visa Convenience Fee Rules
http://usa.visa.com/download/merchants/visa-international-operating-regulations-main.pdf
Page 486
Visa convenience fee rules are more restrictive than MasterCard, as follows:
- The convenience fee must be a bona fide convenience in the form of an alternate payment channel, and must apply to all forms of payment in the alternate payment channel
- The convenience fee applies only to non face-to-face transactions
- The convenience fee must be disclosed to the cardholder and must allow the cardholder to cancel the transaction
- The convenience fee must be a fixed or flat payment amount
- The convenience fee must be included in the total amount of the transaction
The following is applicable only for the Visa Tax Payment Program:
- The convenience fee must be charged by the merchant, and must not be a third party to the transaction
- The convenience fee may not be a recurring transaction
A Visa merchant that accepts solely mail/phone order transactions may not charge a convenience fee.
Unlike MasterCard, Visa allows a convenience fee only if the merchant offers “an alternate payment channel” that provides a convenience to the cardholder. The most common example is a merchant that accepts face-to-face transactions with no convenience fee, but allows payment over the internet with a convenience fee.
Also, note that Visa allows only a fixed or flat convenience fee payment amount, unlike MasterCard which allows a variable fee.
Renting
Like an activation fee, a setup fee is often charged by places that rentRenting
Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership from landowners...
space or other things. In the case of self-storage businesses, this negates claims of "only one dollar for the first month" made by Public Storage
Public Storage
Public Storage , a real estate investment trust , is one of the largest self-storage companies in the United States with headquarters in Glendale, CA.Public Storage built its first self-storage facility in 1972...
and others. Apartment
Apartment
An apartment or flat is a self-contained housing unit that occupies only part of a building...
complexes often charge fees for pet
Pet
A pet is a household animal kept for companionship and a person's enjoyment, as opposed to wild animals or to livestock, laboratory animals, working animals or sport animals, which are kept for economic or productive reasons. The most popular pets are noted for their loyal or playful...
s (mainly dog
Dog
The domestic dog is a domesticated form of the gray wolf, a member of the Canidae family of the order Carnivora. The term is used for both feral and pet varieties. The dog may have been the first animal to be domesticated, and has been the most widely kept working, hunting, and companion animal in...
s and cat
Cat
The cat , also known as the domestic cat or housecat to distinguish it from other felids and felines, is a small, usually furry, domesticated, carnivorous mammal that is valued by humans for its companionship and for its ability to hunt vermin and household pests...
s). Some complexes euphemisitic
Euphemism
A euphemism is the substitution of a mild, inoffensive, relatively uncontroversial phrase for another more frank expression that might offend or otherwise suggest something unpleasant to the audience...
ally call these a non-refundable deposit, ignoring the definition of a deposit
Deposit account
A deposit account is a current account, savings account, or other type of bank account, at a banking institution that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank's books, and the resulting balance is recorded as a liability for the...
as inherently being refundable.
Real estate
A title company or attorneyLawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
collects a variety of fees in the course of handling the purchase of a house at a closing (real estate)
Closing (real estate)
Closing is the final step in executing a real estate transaction.The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the parties consummate the purchase contract, and ownership of the property is transferred...
. These may include fees for tax service, flood certification, underwriting
Underwriting
Underwriting refers to the process that a large financial service provider uses to assess the eligibility of a customer to receive their products . The name derives from the Lloyd's of London insurance market...
, appraisal
Real estate appraisal
Real estate appraisal, property valuation or land valuation is the process of valuing real property. The value usually sought is the property's Market Value. Appraisals are needed because compared to, say, corporate stock, real estate transactions occur very infrequently...
, credit report, record deed, record deed trust, loan signing and processing.
Event tickets
With respect to events ticketTicket (admission)
A ticket is a voucher that indicates that one has paid for admission to an event or establishment such as a theatre, movie theater, amusement park, zoo, museum, concert, or other attraction, or permission to travel on a vehicle such as an airliner, train, bus, or boat, typically because one has...
s, online reservations and payments, and other transactions, there is sometimes a service charge (often called a convenience fee) that serves as additional compensation for the company facilitating the transaction. Ticketmaster
Ticketmaster
Ticketmaster Entertainment, Inc. is an independent American ticket sales and distribution company based in West Hollywood, California, USA, with operations in many countries around the world. In 2010 it merged with Live Nation to become Live Nation Entertainment...
and others charge this, and have made a business model
Business model
A business model describes the rationale of how an organization creates, delivers, and captures value...
of it. However, such groups have a monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
on particular events or even entire concert venues.
Air travel
AirlineAirline
An airline provides air transport services for traveling passengers and freight. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit...
s have long charged fees for changing flight
Flight
Flight is the process by which an object moves either through an atmosphere or beyond it by generating lift or propulsive thrust, or aerostatically using buoyancy, or by simple ballistic movement....
s, and for excess luggage
Luggage
Baggage is any number of bags, cases and containers which hold a traveller's articles during transit.Luggage is more or less the same concept as "baggage", but is normally used in relation to the personal luggage of a specific person or persons Baggage is any number of bags, cases and containers...
. However, with the oil price increases since 2003, many are increasing fees. In May 2008, it was announced that some would be charging even for just one checked bag, making it nearly impossible to avoid. Airlines have also invented fees for nearly every "service" that has always previously been included in the ticket price. While the extra income may be necessary to prevent bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
, the practice of not including mandatory fees in the stated price is deceptive.
Airport
Airport
An airport is a location where aircraft such as fixed-wing aircraft, helicopters, and blimps take off and land. Aircraft may be stored or maintained at an airport...
s also charge landing fee
Landing fee
A landing fee is a charge paid by an aircraft to an airport company for landing at a particular airport. Landing fees can vary greatly between airports, with congested airports, ones where most of the landing slots are held by airlines being able to charge premium prices because of supply and...
s to airlines in order to cover costs, particularly airport security
Airport security
Airport security refers to the techniques and methods used in protecting airports and aircraft from crime.Large numbers of people pass through airports. This presents potential targets for terrorism and other forms of crime due to the number of people located in a particular location...
.
Customer service
Some businesses charge fees just for talking to a customer serviceCustomer service
Customer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...
representative. DirecTV
DirecTV
DirecTV is an American direct broadcast satellite service provider and broadcaster based in El Segundo, California. Its satellite service, launched on June 17, 1994, transmits digital satellite television and audio to households in the United States, Latin America, and the Anglophone Caribbean. ...
charges this when ordering a pay-per-view
Pay-per-view
Pay-per-view provides a service by which a television audience can purchase events to view via private telecast. The broadcaster shows the event at the same time to everyone ordering it...
movie via telephone instead of through the set-top box
Set-top box
A set-top box or set-top unit is an information appliance device that generally contains a tuner and connects to a television set and an external source of signal, turning the signal into content which is then displayed on the television screen or other display device.-History:Before the...
. Some companies charge for technical support
Technical support
Technical support or tech support refers to a range of services by which enterprises provide assistance to users of technology products such as mobile phones, televisions, computers, software products or other electronic or mechanical goods...
, either prepaid or by using a premium-rate telephone number
Premium-rate telephone number
Premium-rate telephone numbers are telephone numbers for telephone calls during which certain services are provided, and for which prices higher than normal are charged. Unlike a normal call, part of the call charge is paid to the service provider, thus enabling businesses to be funded via the calls...
(such as the 1-900 numbers in North America). In the 2000s, some bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s in the U.S. began charging a fee just to visit a teller
Bank teller
A teller is an employee of a bank who deals directly with most customers. In some places, this employee is known as a cashier. Most teller jobs require cash handling experience and a high school diploma. Most banks provide on the job training....
, prompting such customer anger that the banks were forced to back down.
Speaking
A speaking fee is a payment awarded to an individual for speaking at a public eventPublic speaking
Public speaking is the process of speaking to a group of people in a structured, deliberate manner intended to inform, influence, or entertain the listeners...
.
Late fees
Late fees are charged when payment is not received by a deadlineTime limit
A time limit or deadline is a narrow field of time, or particular point in time, by which an objective or task must be accomplished.In project management, deadlines are most often associated with milestone goals....
. These are supposedly intended to get people to pay rent or other charges on time, but these are sometimes exorbitant, or extremely out of proportion to the amount of money which is late. They can also add insult to injury for people who have hit hard financial times, making their situation worse. When added to credit card bills or check card
Check card
The term check card can refer to:* An identification card issued by a retailer allowing the holder to tender payment by check. Such cards were commonly issued in the United States by supermarkets and other retailers before the widespread use of debit cards....
statement
Bank statement
An account statement or a bank statement is a summary of all financial transactions occurring over a given period of time on a deposit account, a credit card, or any other type of account offered by a financial institution....
s, it may also cause an overlimit or NSF fee, creating an endless and inescapable cycle of fees that trigger other fees for people aleady stretched to their financial limit.
Retail
Some retail stores add fees, mainly for "guest passes" at membership warehouses like CostcoCostco
Costco Wholesale Corporation is the largest membership warehouse club chain in the United States. it is the third largest retailer in the United States, where it originated, and the ninth largest in the world...
and Sam's Club
Sam's Club
Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...
, where membership dues have not been paid.
There are a few other "cost-plus" stores, however, that add ten percent or so at checkout, using the lower shelf price to trick consumers into erroneous comparison shopping. At Food Depot and other smaller low-end chain stores like this, the shelf price may be 1.95, when the shopper
Shopping
Shopping is the examining of goods or services from retailers with the intent to purchase at that time. Shopping is an activity of selection and/or purchase. In some contexts it is considered a leisure activity as well as an economic one....
will actually be charged 2.15 in the end, in a sort of legalized bait and switch
Bait and switch
Bait-and-switch is a form of fraud, most commonly used in retail sales but also applicable to other contexts. First, customers are "baited" by advertising for a product or service at a low price; second, the customers discover that the advertised good is not available and are "switched" to a...
. (Furthermore, a disclaimer
Disclaimer
A disclaimer is generally any statement intended to specify or delimit the scope of rights and obligations that may be exercised and enforced by parties in a legally recognized relationship...
indicates the shelf price is not even the actual cost to the store.)
Early termination
An early-termination fee is charged by a company when a customer wants or needs to be released from a contractContract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
before it expires. One example is when a renter leaves an apartment before a year-long contract is over. If tenants rent for a shorter period, or month-to-month, they are instead charged significantly more per month, and are often denied any promotional
Sales promotion
Sales promotion is one of the four aspects of promotional mix. Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability...
deal
Bargaining
Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement. Bargaining is an alternative pricing strategy to fixed prices...
s. Mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
companies in the U.S. are notorious for huge early-termination fees, typically starting at 175 dollars, and falling by only a few dollars per month, no matter the actual cost
Cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this...
of or subsidy
Subsidy
A subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
to the phone.
Some mortgage
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
companies also charge early payment penalties if the homeowner pays more than is due in order to reduce the interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
owed and to shorten the remaining term of the loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
. The fees typically negate this advantage at least in part.
There are also fees charged for any type of termination. In the suburban Atlanta
Metro Atlanta
The Atlanta metropolitan area or metro Atlanta, officially designated by the US Census Bureau as the Atlanta-Sandy Springs-Marietta Metropolitan Statistical Area, is the most populous metro area in the U.S. state of Georgia and the ninth-largest metropolitan statistical area in the United States...
county of Gwinnett for example, customers were hit with termination fees of over 23 dollars when the county commission
County commission
A county commission is a group of elected officials charged with administering the county government in local government in some states of the United States. County commissions are usually made up of three or more individuals...
chose not to renew the contracts of the county trash collectors in November 2008. The two companies charged this both in violation of county law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
and in breach of contract
Breach of contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
.
Infrastructure and environment
An impact feeImpact fee
An impact fee is a fee that is implemented by a local government on a new or proposed development to help assist or pay for a portion of the costs that the new development may cause with public services to the new development within the United States...
is a charge which a developer must pay to local government
Local government
Local government refers collectively to administrative authorities over areas that are smaller than a state.The term is used to contrast with offices at nation-state level, which are referred to as the central government, national government, or federal government...
, in order to raise money for capital improvements to road
Road
A road is a thoroughfare, route, or way on land between two places, which typically has been paved or otherwise improved to allow travel by some conveyance, including a horse, cart, or motor vehicle. Roads consist of one, or sometimes two, roadways each with one or more lanes and also any...
s, libraries, and other services upon which the new land development
Land development
Land development refers to altering the landscape in any number of ways such as:* changing landforms from a natural or semi-natural state for a purpose such as agriculture or housing...
places a burden. This prevents existing residents from being forced to pay in tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
es, in addition to already having to put-up with the traffic
Traffic
Traffic on roads may consist of pedestrians, ridden or herded animals, vehicles, streetcars and other conveyances, either singly or together, while using the public way for purposes of travel...
, noise
Noise
In common use, the word noise means any unwanted sound. In both analog and digital electronics, noise is random unwanted perturbation to a wanted signal; it is called noise as a generalisation of the acoustic noise heard when listening to a weak radio transmission with significant electrical noise...
, and environmental damage of the new development.
Government
In government, the difference between a fee and a taxTax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
is that a fee is paid for specific goods or services rendered by the government, while a tax has no connection to the benefits received for an individual.<ref>Taxes versus fees</ref>
Public resources
A user fee is a fee paid for the use of a public resource, like a parkPark
A park is a protected area, in its natural or semi-natural state, or planted, and set aside for human recreation and enjoyment, or for the protection of wildlife or natural habitats. It may consist of rocks, soil, water, flora and fauna and grass areas. Many parks are legally protected by...
. This is most common for national park
National park
A national park is a reserve of natural, semi-natural, or developed land that a sovereign state declares or owns. Although individual nations designate their own national parks differently A national park is a reserve of natural, semi-natural, or developed land that a sovereign state declares or...
s, and often also state park
State park
State parks are parks or other protected areas managed at the federated state level within those nations which use "state" as a political subdivision. State parks are typically established by a state to preserve a location on account of its natural beauty, historic interest, or recreational...
s or provincial park
Provincial park
A provincial park is a park under the management of a provincial or territorial government in Canada.While provincial parks are not the same as national parks, their workings are very similar...
s, and for privately-owned areas.
Licenses and permits
Fees are usually charged for various government services, including license plates and annual motor vehicle registration, as well as driver licenses and professional licensing. Fees are also charged for various permits, like demolitionDemolition
Demolition is the tearing-down of buildings and other structures, the opposite of construction. Demolition contrasts with deconstruction, which involves taking a building apart while carefully preserving valuable elements for re-use....
and building permits, rezoning
Zoning
Zoning is a device of land use planning used by local governments in most developed countries. The word is derived from the practice of designating permitted uses of land based on mapped zones which separate one set of land uses from another...
, and land grading
Land grading
Grading in civil engineering and construction is the work of ensuring a level base, or one with a specified slope, for a construction work such as a foundation, the base course for a road or a railway, or landscape and garden improvements, or surface drainage...
(which causes silt
Silt
Silt is granular material of a size somewhere between sand and clay whose mineral origin is quartz and feldspar. Silt may occur as a soil or as suspended sediment in a surface water body...
); and sometimes for increasing stormwater
Stormwater
Stormwater is water that originates during precipitation events. It may also be used to apply to water that originates with snowmelt that enters the stormwater system...
runoff, destroying native vegetation
Vegetation
Vegetation is a general term for the plant life of a region; it refers to the ground cover provided by plants. It is a general term, without specific reference to particular taxa, life forms, structure, spatial extent, or any other specific botanical or geographic characteristics. It is broader...
, and cutting-down healthy tree
Tree
A tree is a perennial woody plant. It is most often defined as a woody plant that has many secondary branches supported clear of the ground on a single main stem or trunk with clear apical dominance. A minimum height specification at maturity is cited by some authors, varying from 3 m to...
s.
Deceptive use
Sometimes fee is used to whitewashWhitewash
Whitewash, or calcimine, kalsomine, calsomine, or lime paint is a very low-cost type of paint made from slaked lime and chalk . Various other additives are also used...
what are actually penalties or tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
es. For example, Virginia's now-repealed Civil Remedial Fees
Civil Remedial Fees (Virginia)
Virginia Remedial Fees were a set of taxes enacted by the Virginia General Assembly that collected up to $3,000 for moving violations. The taxes were enacted as the method to fund a variety of transportation projects without raising other taxes, and with the side-benefit of discouraging abusive...
were actually a tax on drivers with certain kinds of traffic law violations.
Schooling
At public universities and community collegeCommunity college
A community college is a type of educational institution. The term can have different meanings in different countries.-Australia:Community colleges carry on the tradition of adult education, which was established in Australia around mid 19th century when evening classes were held to help adults...
s, student
Student
A student is a learner, or someone who attends an educational institution. In some nations, the English term is reserved for those who attend university, while a schoolchild under the age of eighteen is called a pupil in English...
s are charged tuition
Tuition
Tuition payments, known primarily as tuition in American English and as tuition fees in British English, Canadian English, Australian English, New Zealand English and Indian English, refers to a fee charged for educational instruction during higher education.Tuition payments are charged by...
and matriculation
Matriculation
Matriculation, in the broadest sense, means to be registered or added to a list, from the Latin matricula – little list. In Scottish heraldry, for instance, a matriculation is a registration of armorial bearings...
, when can themselves be considered fees charged per credit hour. However, the term student fees typically refers to additional charges which the student is required to pay, typically no matter how many hours the student is taking in the academic term
Academic term
An academic term is a division of an academic year, the time during which a school, college or university holds classes. These divisions may be called terms...
.
Commonly this is a student activity fee, which helps to fund student organisations, particularly those which are academic in nature; and those which serve all students equally, like student government and student media. A newer fee is the technology fee, which is often charged to students by schools when state government
State government
A state government is the government of a subnational entity in a federal form of government, which shares political power with the federal or national government. A state government may have some level of political autonomy, or be subject to the direct control of the federal government...
funding fails to meet needs for computer
Computer
A computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...
s and other classroom technology. Students may also be charged a health
Health
Health is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...
fee which usually covers the campus nurse, and possibly a visit to a local clinic
Clinic
A clinic is a health care facility that is primarily devoted to the care of outpatients...
if the student is ill
Illness
Illness is a state of poor health. Illness is sometimes considered another word for disease. Others maintain that fine distinctions exist...
.
Parking
Parking
Parking is the act of stopping a vehicle and leaving it unoccupied for more than a brief time. Parking on one or both sides of a road is commonly permitted, though often with restrictions...
fees are normally optional, because students may not have their own automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
s. However, many U.S. schools are now forcing meal plans on their students, particularly those that stay in dorms, and some force freshmen to stay in the dorms. Generally, all fees except parking are covered under scholarship
Scholarship
A scholarship is an award of financial aid for a student to further education. Scholarships are awarded on various criteria usually reflecting the values and purposes of the donor or founder of the award.-Types:...
s, whether they are from private, government, or lottery
Lottery
A lottery is a form of gambling which involves the drawing of lots for a prize.Lottery is outlawed by some governments, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments...
funds. However, at least one U.S. state (Georgia
Georgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...
) began denying HOPE Scholarship
HOPE Scholarship
The HOPE Scholarship Program created in 1993 under the supervision of Georgia Governor Zell Miller, is a merit-based higher education scholarship that is funded entirely by revenue from the Georgia Lottery and is administered by the Georgia Student Finance Commission...
money for any new fees added, even by its own state schools.