Tuesday, January 22, 2019

When the fine print destroys your image - the Burke Williams surcharge

Burke Williams, using the slogan "beyond the spa," provides massage and other services throughout California. The company's marketing emphasizes a refined, high-class image.

But if you look at the company's FAQs, you'll find something curious.

Why is there a surcharge on my invoice?

Beginning July 1st, 2018, in response to state and local minimum wage increase and to assure that our valued employees continue to receive the compensation and benefits they deserve, a 3% surcharge will be added to all services. 100% of this surcharge goes directly to the compensation of our employees.

Obviously this is a pricing presentation tactic, and in one sense could be compared to other pricing presentation tactics. Gas stations that price in tenths of a cent. Automobile sticker prices that exclude a bunch of things. Companies that charge extra for shipping and handling.

But as Megan Lynch notes, this pricing presentation tactic does not reflect well on Burke Williams' overall message.

You say the “surcharge” is due to minimum wage, but you want to make sure your employees get what they deserve. Which, apparently, is the least amount the law will allow you to pay despite your high prices & tony surrounding.

Think about it. Customers are going to, in Lynch's words, a "tony" place, and probably have above average income themselves - Burke Williams' listed prices (excluding surcharges) for simple massage are around $100 and up, and are higher in San Jose and San Francisco. The company's "transformative journeys" (which sound very Goop-y) are north of $500, and are again higher in San Jose and San Francisco.

Yet the existence of the surcharge suggests that these prices alone are insufficient for the cost of doing business, which (as of July 1, 2018) included wages somewhere between $10.50 per hour and $15 per hour.

Of course, this assumes that Burke Williams classifies its workers as employees and not independent contractors.
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