Is this the travel industry’s most egregious fee?

For years I’ve used this forum to criticize new and ever-higher ancillary travel fees, particularly from airlines. I’ve also been vocal about fighting for greater transparency of pricing, so consumers are clear what they’ll be paying prior to booking.

So imagine my surprise a few weeks ago when I purchased transportation for my son during spring break, and was hit with what I’ve come to believe is the most egregious fee of all — except it wasn’t imposed by an airline, but by Greyhound.

His $31 online fare was slapped with a $2 “Service Fee,” the type of nickel-and-diming most of us hardly recognize anymore. But once we indicated he was the traveler and I was the cardholder, the price jumped by another $18 — or 58% — due to a “Gift Ticket” fee, which “applies if someone is buying a ticket and not traveling.” So that $31 price was actually $51, and after evaluating our options we had no choice but to accept it.

Quiet collection?

I was even more surprised to learn Greyhound’s Gift Ticket fee has been collected for years now, even though an informal survey of travel experts revealed it has escaped major attention. This despite the fact the $18 is a locked-in price, so it actually can double the cost of some very inexpensive tickets; last week my son bought a $16 Greyhound ticket, so if I had paid for it, the fee actually would have been higher than the fare.

However, it didn’t escape the attention of Dr. Shawn Ambrose of the University of Saint Francis in Fort Wayne, Ind. A few years ago he was buying a bus ticket for his daughter and encountered the Gift Ticket fee; he paid it, but he also channeled his displeasure into creating a Change.org petition. In assessing its effect, Dr. Ambrose told me, “I received links on Facebook for other petitions, so I believed it would be a good start. Over 8,800 people signed the petition, and I was able to have a conversation with the CFO of Greyhound.”

I also contacted Greyhound, and spokeswoman Lanesha Gipson told me: “The Gift Ticket fee is a fraud-protection fee that counteracts the costs incurred for protecting the customer and the company against credit card fraud. When customers purchase tickets with a credit card at the terminal, they are asked to show their ID to verify that the name on the credit card matches the name on their ID. There is no way to do this online.”

Like me, Dr. Ambrose is skeptical of this reasoning. His letter to Greyhound noted “the explanations that the fee is a handling fee and/or anti-fraud measure are not persuasive when critically examined.” Furthermore, his letter stated: “Your representatives have also stated that the Gift Ticket fee is an anti-fraud measure. With an average ticket cost of $48 [in 2010] and a Gift Ticket Fee of $18, the average ticket cost is covered by 2.67 Gift Ticket fees. In other words, one out of every 2.67 Gift Ticket sales are fraudulent. This defies logical explanation.”

A fair question is why other companies — both inside and outside the travel industry — also don’t charge for third-party billings. The answer, it would seem, is if all companies that engaged in online commerce instituted such a fee, there would be a revolt, not just for travel purchases but all Internet purchases.

A bold new industry

For travelers, the Pandora’s box was opened in earnest in 2007 when Spirit Airlines redefined itself as an “ultra-low-cost carrier” and began charging for checked bags and other amenities and services. Since then other U.S. airlines have followed Spirit’s lead to varying degrees, leaving Southwest as the only domestic carrier currently not charging for first — let alone second — checked bags.

And as I noted here, the rest of the travel industry has emulated the airline sector by embracing “a la carte pricing.” Ancillary fees are now standard for hotels, car rentals and cruises, and confusion over pricing transparency continues to increase, which is why I recently predicted “fees will increase, proliferate and confound.”

Ironically, while railing about transparency of airline fees, I’ve continually offered kudos to the bus and rail industries for holding the line against excessive fees. Yet Greyhound’s Gift Ticket fee stands out as one of the most flagrant add-on costs in the industry; put another way, when a travel company institutes a fee not charged by Spirit or Ryanair, that takes some doing. Ryanair, for example, imposes a 2% fee on credit card transactions, but even the world’s most notorious generator of ancillary travel fees doesn’t charge extra for a “gift ticket.”

There are two reasons I believe Greyhound’s fee is particularly burdensome. One is the bus line clearly carries a large percentage of travelers who cannot afford to fly, and therefore such riders are more apt to receive financial assistance when family or friends purchase tickets on their behalf. The second is that Gipson states more than 50% of Greyhound’s ridership is between ages 18 and 24. While Greyhound can’t identify how many riders are college students or military personnel, the bus company actively markets to both groups and provides discounts. Yet many travelers in college or the military also fall into that 18-to-24 range, and also commonly rely on parents and others to purchase tickets. In recent years, I’ve repeatedly booked and paid for travel while my son has been in college and serving in AmeriCorps.

In fairness, the good news is baggage fees are less common for domestic travelers who opt not to fly. Although it was noted that Amtrak instituted new excess baggage fees last year, the rail line’s policy of two free personal items and two free carry-ons is as good as it gets for travelers.

Similarly, Greyhound is more lenient than most domestic airlines as well: The first checked bag is free, and the second is $15. But I’ve asked quite a few riders about this, and they indicate even second checked bags usually are not charged. For the record, the airlines maintain complex systems to process, handle, transport and load checked bags, while Greyhound’s costs are considerably less since most passengers “check” their own bags by tossing them into the belly compartments (there are policies in place for those needing assistance).

What to do

Some travel fees can be avoided with a little preplanning. In this case, the only answers are obvious.

• If possible, transfer funds so the traveler can make his or her own online booking.

• Tickets can be purchased at the bus terminal so that ID can be shown in person. But there’s an important caveat: Unfortunately, Greyhound buses often fill up, particularly during peak times such as holidays. So waiting until the day of travel can be risky.

• If this fee significantly drives up your ticket price, consider alternative modes of transportation, such as Amtrak.

Bill McGee, a contributing editor to Consumer Reports and the former editor of Consumer Reports Travel Letter, is an FAA-licensed aircraft dispatcher who worked in airline operations and management for several years. Tell him what you think of his latest column by sending him an email at travel@usatoday.com. Include your name, hometown and daytime phone number, and he may use your feedback in a future column.