"Outrage": Philadelphia Airport Adds Hidden 3% Surcharge To All Vendor Items

With the idea of an unrealized gains tax being tossed around at the Federal level, and just when you thought we couldn’t possibly conjure up any more fees, taxes, surcharges or other burdensome cash grabs, the Philadelphia Airport is calling your bluff.

The airport spurred “outrage” this week after it was revealed that they are adding a 3% surcharge to every purchase, according to View From The Wing. As if airports weren’t already adding 50% surcharge on everything they sell there to begin with…

According to the report the surcharge is “to offset the employee wages and benefits” that must be paid to airport workers, but none of the money actually goes to employees.

View From The Wing then asks the astute question: “You might ask, why allow vendors to charge people more than the marked prices, instead of just raising prices?”

And you already know the answer, right? It’s because the airport doesn’t let them raise prices, stating that “operators are only permitted to charge up to 15% more than a comparable street-side unit”.

Thus, the airport then pretends that a surcharge isn’t a price increase. And while we’re fuzzy on the innerworkings of the charge, it would seem to us that it puts another set of hands in between the customer and the vendor, so we’d be doubtful about vendors having access to all of the new cash they are bringing in. You’ll have to pardon our skepticism, but just remember, we’ve covered Wall Street for decades.

Off-airport stores have increased prices due to 20% inflation over the past four years, and airport vendors have followed suit. With price caps based on a percentage over ‘street pricing,’ the dollar gap between outside and airport prices has grown, the report says.

Now as a result of the charge, menu prices appear lower than they are, with a $10 item actually costing $10.30, excluding tips. This 3% surcharge, not a service charge, is attributed to the high minimum wage at the airport, which is $15.06 plus benefits.

Despite wages being a cost factor, not all airports have the same wage levels, with some, like St. Louis, paying more. Perhaps funds from paid water refill stations could cover these costs instead.

Vendors must disclose the surcharge but only at the point-of-sale and on receipts, meaning customers learn of it after being charged. This likely leads to lower tips as customers try to keep their total bill as expected. The 3% surcharge diverts money from worker tips to concession owners, undermining the minimum wage increase benefits for workers.

Source: ZeroHedge

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