Booking fees have spread like a fungus across British retail in the past few years and their banishment to the history of underhand business wheezes is cheering news for everyone.
Travel and entertainment companies slyly alighted on these rip-off charges as a way of spiking up the headline price. The Office of Fair Trading dislikes them because they obscure the cost of a product and thus make it harder to shop around. There is a more obvious reason to dislike them: they are totally out of proportion with card processing fees – up to 20p for a debit card and for a credit card, 1 to 2 per cent of the transaction value.
Ryanair, an infamous stealth charger, slaps a £6 "administration fee" on a flight: £48 for a holiday for a family of four – 200 times the bank charges. After legislation is introduced in 2012, a ban would prevent the transport sector (airlines and ferries are the worst offenders) from charging anything more than the cost of processing a card. Less clear is what will happen to theatres and cinemas; though the Treasury hopes to rein in "most of the retail sector".
By acting quicker than the rest of Europe, which will introduce the ban from 2014, the Coalition has struck a blow for hard-pressed shoppers.
A note of caution: Ryanair's "administration fee" is really a part of its price: its margin is so low that if it cannot charge the fee, it will load the money on to the fare another way. But at least we will see up front what we are paying.Reuse content