Stealth inflation

Stealth Inflation is the term used to describe charges and fees created by business to gain extra profit and revenue from its customers. The stealth part of the term is that business will often use miscellaneous fees to charge customers without the customers consciously knowing the fees existed, even though they may have agreed then signed a contract for the goods and services the fee is hidden in a mirage of words and policies. The inflation part of the term relates to the up charging of the service without actually providing anything additional. Since most companies charge a fee to accept payment a portion gets built into profit and revenue. A big example of stealth inflation can be overdraft fees from banks surcharges from Telco providers, processing fees and installation fees.

Examples

Electric and Television ProvidersStealth inflation can also be calculated in service payment fees.

In example an electric bill can average from $119.99 or more. When consumers go to pay the bill the processing fee can jump to an additional 5 - 6%.

Department StoresThe last 90 day policy

Some department stores have what is called the last 90-day policy. " A customer returning an item is subject to refund based and the lowest sale price within the last 90 days. " with or without a receipt depending on the store.

$39.99 1 pair of pants Paid price $19.99 Lowest price in 90 days $19.99 Refunded $20.00 Customer lakes the loss 50% Profit Gain for the company

Phone ServiceMisc fees

Lets say you sign up for cellular service the phone company may tell you its only 49.99 at sign up but when you pay your first bill you find out there are surcharges roaming charges and connection fees.

BanksOverdrafts

Another good example is the bank overdraft fee. As below you can see if a normal checking account costs 15.00 per month than the bank just made 10 times that in a single day. last year banks collected 17 billion in overdraft fees.

Further reading

* [http://moneycentral.msn.com/content/savinganddebt/p64971.asp Liz Pulliman Weston MSN money and personal finance]
* [http://query.nytimes.com/gst/fullpage.html?res=9B03EFD7163DF937A35751C1A9659C8B63&sec=&spon=&pagewanted=all NY times artical on Stealth Inflation]

References

Bank overdraft Fees [http://www.responsiblelending.org/issues/overdraft/briefs/page.jsp?itemID=29674762 Center for responsible lending]