The Ethics of Junk Fees

The Cherry Creek Food Hall is located in Greenwood Village and it charges an extra 3.5% “junk fee” that is not disclosed on the menu. The Federal Trade Commission has issued a proposed rulemaking that would prohibit these types of fees because they are deceptive and unfair. I think these fees are also unethical.

I recently visited the food hall and produced a video about my experience. I sent an email to the public relations company engaged by the corporate owner of the business, asking the company to change this pricing scheme before the FTC forces it to do so. I want the company to make this change voluntarily, because it’s the fair and right thing to do.

RCI Hospitality Holdings, Inc., is the publicly traded company that owns the food hall. My email included a link to the rough cut of the video, and I offered to include the company’s response in the video if it could respond in two weeks. The company acknowledged my request but did not respond.

The Ethics of Junk Fees – 3:13

Click HERE to read my comments submitted to the FTC about the proposed rule.

I also sent a letter to my local city council, informing them of my junk-fee experience. The city does not regulate trade practices; that’s the role of the FTC. However, it does regulate liquor sales and in Colorado, a liquor license can only be granted to applicants with “good moral character”. That’s a state law. It’s a mandate.

I think this requirement is a vestige of the prohibition era of 100 years ago and I think this part of the law is wrong. I think requiring a liquor board to pass judgement on the moral character of another is a moral dilemma itself. See my page on Moral Character.

City Councilmembers swear an oath to uphold the US Constitution and the laws of the State of Colorado before taking office. If a councilmember is faithful to their oath, they will follow the rule of law, including the part about judging the moral character of applicants wanting to sell booze, and even if they disagree with the law. The moral dilemma is how to determine morality because the answer is based on the morals of the judge.

I wonder if the liquor licensing board believes that deceptive pricing is unethical, and if so, if it is an indication of moral character?

As a friend wrote, these are “important philosophical policy debates”.