Business 101: Convenience and Service Fees

Published on Jan 26, 2010   //  Business Topics

Over the weekend, Darren Barefoot wrote a blog post about the silly service fees being charged by Cinemark. When you choose to buy and print your movie tickets at home, they charge a $1.00 service fee per ticket above and beyond the cost of the ticket itself.

As Darren mentions, this makes very little sense from a business standpoint. By having your customers print their tickets at home, you reduce the labour cost involved with hiring more ticket sellers on location and you save some money related to the ink and paper needed to print these tickets. Fewer lineups, more convenience, and everyone is happier all around.

Yes, I understand that there must have been some initial costs involved in setting up the online payment system, but by charging the additional $1 fee, you are actually discouraging customers from using it. That defeats its purpose. Similarly, Ticketmaster charges you a fee if you print the ticket at home, but no additional fee if you have the ticket mailed to you or if you pick it up from a local Ticketmaster outlet.

One of the comments posted on Darren’s blog explains that the online ticket sales service is likely outsourced to a third-party, which charges Cinemark a fee for each ticket sold through the service. Rather than absorb this cost, Cinemark passes the charge onto the consumer. This may very well be true, but I agree with Darren in that it is not a smart business practice.

What do you think? If you were Cinemark, would you provide the “print at home” service for free or would you charge the $1 fee?

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