Gourmet Magazine offered a twelve issue subscription for $1 an issue – $12 for twelve issues.

That whet my appetite.

But when the bill came, the “amount due” was $15.96.


According to the fine print, the difference, $3.96, was for “postage and handling.”
You’d think that the price of the magazine would include getting it to you – that’s the way newspapers and the other magazines I’m familiar with do it.

Gourmet’s technique is known in the health care arena as “unbundling,” a way to soak people for a few extra bucks. For example, hospitals bill people for a night in a hospital room but charge separately for the television in the hospital room. A growing number of companies have picked up the tactic. Cell phone companies routinely impose extra fees and charges for things that are really part of their overhead.

Apart from misleading consumers, this kind of marketing cripples competition itself. If you aren’t able to determine the actual price you are going to pay, then how can you comparison-shop?

We’re not talking about optional items here – like adding a sunroof or twenty inch wheels to a car purchase. A magazine subscription is worthless if it is not delivered to you. The only reason why Gourmet’s marketing department breaks out the cost is to hope that consumers won’t notice the extra thirty-three cent per issue charge.

PS Check out the offer on the bill to “extend” the subscription another 12 issues – once again, for $1 an issue. Are they going to cover “postage and handling” this time, or are they going to demand another thirty-three cents an issue when they bill me for the extra year?