Leaders often treat commissions as a pricing decision, but customers experience them as a decision based on trust. Each fee sends a signal about how a company thinks about the relationship, whether it’s trying to remove friction for customers or, sadly, monetize it.
Some fees seem reasonable, while others seem like punishment, deception, or laziness masquerading as politics. The difference matters more than many leaders realize.
Let’s take a look at the fees companies charge, why they charge them, and how they shape the customer experience.
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Rates that customers consistently don’t appreciate
Some tariffs trigger near-universal customer frustration because they shift the burden of a company’s operational choices onto the customer. Here are some of the most common ones.
Return or restocking costs: Sometimes these cover legitimate costs. More often they exist because the product descriptions, sizes or indications were inadequate. Customers are penalized for the uncertainty the company creates.
Surprise fees at checkout (shipping and beyond): Customers tolerate shipping costs. What they don’t tolerate is discovering them after committing to the purchase. The same goes for vague processing or management fees that appear later in the game.
Restaurant surcharges (for example, “service”, “wellness”, “health care”): The intent may be admirable, but the execution is lacking. Labor is a key cost of doing business, so include it in the price. Don’t separate it and force customers to reconcile it at the table. I once ate at a restaurant that charged a landscaping fee. I asked. The restaurant was under renovation and was passing the costs on to customers. My reaction: Not my problem. There was no option to decline the fee, unlike employee services charges, but again, this is a cost of doing business or poor planning.
Convenience fees: These are a masterclass in irony. Customers are charged for using the most efficient and lowest-cost channel for the company. If it’s convenient for you, say so.
Penalties for early termination or cancellation: These don’t create loyalty: they trap customers. If someone wants out, the relationship is already broken.
Automatic renewal penalties: Forgetting to cancel shouldn’t be a money-making strategy. Send reminders and give customers the option to unsubscribe before charging them.
Modification or Modification Fees: Life happens. Asking customers to adapt, especially when the operating cost is minimal, seems punitive.
Paper billing fees: Making customers pay for their preferred format, while pushing yours, is short-sighted.
Payment processing fees: These are the fundamental costs of doing business. Passing them on communicates to customers that this is a transaction, not a relationship.
Staggered Support Fees: Charging more to fix problems with your product indicates that support is a profit center. It shouldn’t be like this: it’s what’s at stake.
Inactivity or dormancy fees: Penalizing customers for not engaging or using ensures they won’t return. If usage is low, the experience is unsuccessful.
In themselves, all of these fees might seem minor. Collectively, they report that the company is optimizing transactions rather than building relationships. Ask yourself:
- Are you saving money for short-term income or building long-term trust and relationships?
- Do commissions improve the customer experience or make up for why it doesn’t work?
The commissions generally accepted by customers
Not all fees generate that guttural response you’d expect from having to pay more, unexpectedly. Customers are willing to pay when the rate is logical, transparent and linked to real value.
- Optional updates: Priority shipping, premium services and enhanced experiences are choices, not penalties.
- Accelerated or special handling: If customers ask for something faster or more complex, it makes sense to pay for it. If your cost doesn’t go up, theirs shouldn’t go up either.
- Usage-based pricing: Paying for what you use is often considered fair, especially if customers can predict the bill without needing a calculator and a lawyer.
- Professional Services: Charges for consultancy, installation and custom work are accepted when the value is clear. Call it what it is: expertise.
- Reasonable penalties for late payment: Clients accept responsibility when expectations are clear and grace exists.
- Government or regulatory commissions: These are tolerated if clearly labeled, so don’t disguise them.
- Premium access or subscription levels: Customers will pay for priority and exclusivity if the experience is met.
Customers will pay for value, choice or real incremental cost. They resist paying for friction, ambiguity, or business convenience. When fees compensate for broken processes, rigid policies, or internal cost structures, customers revolt. When commissions are clear, earned and avoidable, customers comply.
Why do companies charge these fees
Despite the frustration they create, most unpopular tariffs do not originate from malicious intent. They usually emerge from practical business pressures and legitimate attempts to offset real expenses.
Cost recovery: Many fees arise as legitimate attempts to offset real expenses, for example, handling returns, processing payments, or handling special requests. The problem is that companies often pass these costs directly onto the customer instead of improving the process that creates the cost.
Behavior management: Late, cancellation, and modification penalties are intended to shape behavior. In practice, they often feel like punishment.
Risk Management: No-shows, returns and unused reservations create uncertainty. Tariffs shift this risk to customers. There are often real, sunk costs associated with these fees.
Margin Protection: In highly competitive industries, base prices are kept artificially low while profitability comes from add-ons and surcharges, e.g., baggage fees, concert ticket fees, hotel resort fees. Done poorly, these become price camouflage.
Standardization of the sector: “Everyone else is doing it” is one of the least strategic – and most common – reasons why a tariff exists.
Finance-driven decision making: Many pricing structures arise from spreadsheets rather than experience design discussions. Finance sees cost and margin recovery, while customers see friction and lack of transparency.
This gap (between finance and customers), which explains practically all the other reasons, is ultimately where trust is undermined.
Why this conversation matters
Rates are not just a pricing strategy: they are a question of customer centricity and culture. They truly reveal a company’s way of thinking and answer this fundamental question: When friction appears, do we remove it or monetize it?
They also highlight broken processes upstream: return fees often indicate inadequate product information, change fees signal rigid systems, and support fees reflect insufficient investment in the service.
In other words, many tariffs are symptoms rather than solutions and end up shaping trust over time. Customers rarely leave because of a fee, but repeated friction and small perceived injustices accumulate.
Brands focused on extracting short-term revenue tolerate such erosion. Brands focused on long-term loyalty question whether or not those fees belong in the experience. (Check out an article I wrote for MarTech last year on value creation versus value extraction.)
What options do customers have?
Customers are not entirely helpless in the face of unpopular tariffs, even if their options vary. Sometimes the simplest approach is to ask for a fee waiver. Frontline employees often have the power to make exceptions, especially for reasonable requests.
Customers can also vote with their wallets. Companies that rely heavily on punitive pricing often find that competitors willing to design a better experience quickly gain loyalty.
Public feedback channels like online reviews and social media can force change, especially when rates seem deceptive. In regulated industries, formal complaint channels provide additional leverage.
But the most powerful force remains market pressure. When enough customers object, companies respond. Some examples of where this has happened include: reducing bank overdrafts and ATM fees, eliminating airline change fees, and increasing scrutiny of junk fees on event tickets.
Unfortunately, change rarely comes from internal reflection, but from external pressures. Let’s change the situation.
The questions leaders should ask themselves
The real issue isn’t whether commissions generate revenue. It depends on whether they signal the type of relationship the company intends to build.
A couple of helpful questions leaders should ask (for that internal reflection):
- If we designed this experience from scratch today, would this fee exist? And why?
- Which of our commissions would we be forced to remove if a better competitor showed up tomorrow? And why?
The conversation should then move from defending compensation to defining why it exists. In the end, commissions are rarely just about money: for customers, they’re about trust.
