This is the Cato Daily Podcast for Monday, February 19th, 2024.

I'm Caleb Brown.

When the president talks about so-called junk fees, just what is it that he's referring to? Does he mean

surprise charges that appear on bills? Or does he mean something more mundane like

charging for benefits that some people are willing to pay for and others don't care.

Cato's Ryan Bourne boils down the White House's odd rhetoric surrounding junk fees.

Ryan, you may have had this experience. I've had this experience a couple of times where you go into a restaurant, you have a perfectly fine meal, and then at the end of the meal you are presented with, this is all post pandemic you are presented with a

check that has a surprise 20% 15%, 25% surcharge on the bill that is referred to as like a service fee.

And occasionally it will say helpfully in parentheses this is not a tip and so people have had this

experience this is a convenience that restaurants add on to bills in our inflationary times to perhaps not

deal more directly with things like menu costs and adjusting their menu pricing accordingly, but it feels opaque.

It feels as if you were given a false impression of the prices that you were about to pay for a product and I think it's a really

decent example of what the president might consider a junk fee which is it's

opaque it's not clear what it does, it's not clear what it's paying for, and it is a surprise on a bill.

He's not talking about that.

No, he's not talking about that specific example.

Now, there's a kind of strong version of the junk fees that the Biden administration is referring to

and then there's kind of like the softer way that they use that catch as a catch-all term for things that we just like or find annoying.

So the official definition that the White House uses to define junk fees is those charges

designed either to confuse or deceive consumers or to take advantage of locking or

other forms of situational market power.

So a very precise definition where things are deliberately deceptive or just designed to be

...