Last month Dr. Shawn Ambrose, an assistant professor of business at Fort Wayne, Indiana’s University of Saint Francis, went online to purchase a Greyhound bus gift ticket for his daughter Geri to use to come home to Fort Wayne for the holidays. Ambrose was surprised to find an $18 fee on top of the $207 bus ticket price. Comparing, it dawned on him that Expedia.com had not charged a fee when he had recently purchased an airline ticket for his son David to return from California. To save the Greyhound fee Ambrose had his daughter buy the ticket with her debit card, and he reimbursed her later.
But what in Greyhound was going on here, he thought.
Ambrose, along with other Greyhound customers, discovered the company charges an $18 gift ticket order surcharge as an anti-fraud measure. The surcharge is added to the ticket price for web and phone purchases when an individual purchases a ticket for someone other than the credit card holder.
“I am a business professor, and I was pretty sure no company charges such a high fee for their services,” Ambrose told BUSRide. “I did the research. The average cost for a Greyhound bus ticket is $48. With a gift ticket fee of $18, that’s almost a 40-percent markup.”
A friend told Ambrose about the website Change.org, a for-profit corporation that offers among other business services a civil reform-oriented social networking platform for people to start online petitions. Earlier this year Ambrose had signed a petition calling for Bank of America to eliminate a $5 charge for use of debit cards that was to go into effect in January.
Ambrose decided to start a Change.org petition himself, calling on Greyhound to eliminate the $18 fee. As of Monday afternoon nearly 320 had signed the petition.
“It’s a fee that does not stand up to scrutiny,” Ambrose says. “It can’t cost Greyhound $18 to process a third-party transaction. Outraged consumers are fed up with being nickel and dimed to death.”
Ambrose went online to Greyhound’s Facebook page and voiced his opinion. On Oct. 27 Greyhound posted a reply:
- Greyhound Bus Lines @Shawn – Hi Shawn, so sorry for the delay in getting back to you. We receive a high number of bank chargebacks related to credit card transactions where the person for whom the ticket was purchased doesn’t end up traveling. These charge-back costs from the card issuers are high, and can be associated with fraudulent activity (i.e. stolen credit cards). However, rather than pass this cost along to all customers who buy tickets as a general fee, we only do it for those who purchase tickets for others with a credit card online or by phone. It is important to note that we do not add this charge if the credit card holder is also traveling. Thank you.
But Ambrose points to an Oct. 27 article in the Toronto Star newspaper where some Canadian residents have complained about the fee. One calls the fee a Greyhound “cash grab.”
On Monday Greyhound sent a statement to BUSRide, stressing the charge not only counteracts fees incurred by the company for credit card fraud, but also serves as a handling fee for providing the ticket to the recipient at will call. The statement goes on to say that the charge is both a way to keep the company safe, as well as the 17.6 million passengers Greyhound transports throughout North America annually. Greyhound recommends that people purchasing the ticket do so at a terminal or agency and mail it directly to the recipient.
Ambrose isn’t buying the rebuttal. He points toward research made public earlier this year by CyberSource Corp., a unit of Visa Inc, that states in 2010 fraud losses decreased to 0.9 percent, down about $600 million from 1.2 percent in 2009. It was the second consecutive year the fraud loss percentage had decreased.
“Greyhound says the gift ticket fee is a fraud-prevention fee; I have a hard time believing one out of three of these transactions are fraudulent,” Ambrose says.
Ambrose contends that while he was able to avoid the fee, others who may be facing financial hardship may have to pay the fee or not travel by bus at all.
“Greyhound caters to a demographic hoping to save money on travel costs, and while I was able to avoid the fee, many people do
not have this option,” Ambrose says. “I’m looking at others who, I believe, Greyhound is taking advantage of with this fee.”
— Glenn Swain
That type of rip off by Greyhound gives a bad name to the whole bus travel industry. It is not that airlines do something bad, they need to do it as well.
I just bought a ticket for my son to come and visit me and they hosed my for $18. It is profit plain and simple. It does not prevent fraud.
Next time I will just email my son the money which costs me $1.50.