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May 7, 2025
How Transparent Should Retailers Be on ‘Unexpected’ Supply-Side Fees or ‘Hidden’ Tariff Costs?
“Hidden fees and tariffs are eroding branding loyalty.”
That concise yet concrete statement was the lede offered up by Chain Store Age’s editor-in-chief, Marianne Wilson, as she detailed the findings of a recent study conducted by global commerce platform VTEX. Broadly speaking, that study suggested that U.S. consumers were extremely averse to so-called hidden or unexpected fees tied to various emerging supply chain woes faced by retailers, particularly the ongoing tariffs enacted by President Donald Trump.
Among the findings: More than three-quarters of respondents (82%) said that clear pricing without hidden fees was essential to a stress-free shopping experience. Additionally, about a third reported feeling frustrated when encountering obscured fees, with 20% going so far as to immediately abandon their cart when confronted with these.
Furthermore, 73% of those polled said that they had either swapped brands or curtailed spending entirely as a result of rising prices, while just over a quarter of respondents (26%) pointed to stress and anxiety regarding spending as a driving force behind a decision to move away from a once-favored brand.
“The findings expose a widening credibility gap, as brands increasingly pass tariff costs onto consumers through vague or last-minute fees, according [to] VTEX,” Wilson wrote.
“It also could risk the potential of tariffs and inflation-related fees becoming a catch-all for hidden charges, fueling further disconnect between what shoppers expect and what brands deliver,” she added.
Wilson pressed on to quote VTEX founder and co-CEO Mariano Gomide de Faria on the results of its survey.
“We’re at a critical juncture for retail. Tariffs and supply-side pressures are no longer looming threats, they’re the new normal. The brands that obscure those costs or spring them on customers at checkout are eroding trust. In this environment, agility, visibility, and transparency are non-negotiable,” he said. “Retailers need to build experiences that feel like clarity and control is in the customer’s hands.”
Trump Claims to Have Talked Amazon’s Jeff Bezos Down From Displaying Tariff Costs Next to Products
Following recent reports that Amazon was planning to display the added costs of tariffs next to product listings — a claim Amazon denied, per Business Insider — headlines were soon proliferating suggesting that Trump had called Amazon founder and executive chairman Jeff Bezos to discuss the matter.
“He’s just a very nice guy, we have a relationship. I asked him about it,” Trump told NBC News’ Kristen Welker during a May 4 interview. “He said, ‘Well, I don’t want to do that,’ and he took it off immediately.”
Whether or not Amazon was considering the placement of tariff costs next to product listings, it seems that at least some degree of transparency on the part of U.S. retailers is being called for by cash-strapped and worried consumers. Navigating a path between apparent consumer demand for transparency while maintaining an attractive pricing strategy could be fraught and will almost certainly be a topic of much debate in the days to come.
Discussion Questions
Should retailers openly disclose and itemize costs associated with tariffs on product listings or price tags? Why or why not? What are the benefits and drawbacks associated with doing so?
Which retailers or retail segments are likely most susceptible to concerns surrounding the hidden fee/tariff fee debate? Will customers ultimately look past their interest in transparency for other reasons or motivations?
How important is transparency in terms of passing along costs in today’s retail market? Are consumers actually likely to abandon established practices or preferences if transparency protocols aren’t adopted, or is it something of an idle threat?
Poll
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Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
Nolan Wheeler
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Carol Spieckerman
President, Spieckerman Retail
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The judgment here has to be left up to individual retailers and what works best for their customers. I certainly don’t think any retailer should cower down to the federal government and be shy in explaining what is happening; after all, our system makes very clear that government is the servant of the people, not the master. But neither do I think overly complex discussion of tariffs is helpful. If there are price increases, retailers should keep it simple and honest. Where consumers may bear additional costs, such as import charges for products ordered overseas, I think retailers should advise on the tariff costs consumers will pay. Transparency is important there.
If Amazon got smacked down for pricing transparency, other retailers may fear the risks of similar communications. However, consumers may reward retailers who clearly show how tariffs are padding product prices. Since the pandemic, consumers have been leery of retailers’ and brands’ pricing opacity amid shrinkflation and higher margins. Companies that break down the impact of tariffs will increase brand trust.
Great points Lisa! Retailers should be transparent with incremental costs of tariffs up-front and not “surprise” them with extra charges at checkout. Transparency builds trust and unpleasant surprises erode loyalty.
Thank you, David.
100% needs to be on the pages while customers are browsing and prior to checkout.
This quite a complex question. I’ve always been a fan of separate shipping costs because they make sense to customers. Maybe that’s one of the most important issues — if noting the costs separately “makes sense” then it can be useful to customers and that can lead them to be more satisfied and (possibly) to also purchase more. Unfortunately, an approach like that backfires if the customers don’t trust the company’s cost listing or if that specific cost makes them feel “nickel and dimed.” I certainly don’t know about the whole of the market. But Amazon’s adding commercials to Prime Video then offering to remove them for an added fee made my whole household quite angry. I suppose my fundamental advice to retailers: Take great care — it could be a superb move or a horrific move. Depending.
Credibility is a big question in today’s America. If the cost of tariffs is shown, will the response be, from the less financially literate, its “fake pricing”?
Transparency will help customers understand the reason for price increases. However, there is a risk of not sharing the information—competitors will. So, do you want to lose customers to retailers who share pricing information? That’s part of the risk.
Several years ago, I interviewed a manufacturer/retailer impacted by tariffs (during the first Trump administration). He was overly transparent with his reasons for the higher prices. The result was what he hoped for: no lost sales.
Transparency is a choice. Decide what works best for you and your customers.
Transparency = trust. Unequivocally, retailers should be transparent in their pricing. Notwithstanding, Bezos’ capitulation to Trump, retailers should all be clear with customers about what’s driving prices up. Trump can’t call every retailer, like he did with his pal Jeff. If retailers are not transparent, then they will simply appear too expensive and lose customers to less expensive options. Retailers are in a tough spot, but they didn’t create this and by being transparent, they improve the probability of preserving their customer relationships.
Yes, transparency is trust, and trust is ultimately essential. But, if POTUS says it is fake, who you gonna believe?
The retail opportunity here is to keep communication simple and honest. Because planned tariffs may have a short-term lifespan while deals are worked out, retailers should identify any temporary line-item costs for what customers pay above and beyond normal pricing. Customers will also appreciate learning what retailers are doing to lower the impact costs even with the sting of price increases.
There’s no right answer, but keep in mind that customers know what things cost. That sweater has cost $20 for years, so when it costs $55, they’re going to know that something is amiss. Hiding the tariffs isn’t a thing.
And, they will assume the retailer is ripping them off.
Spot on. Void of key decision making information, the customer will their own assumptions, often negative ones.
American consumers would be well served to see external costs broken out from actual cost of goods and other services, like delivery charges.
Right now there is a lot of uncertainty about the impact of tariffs, and especially how much ability a retailer or manufacturer may have to offset or control new costs. I can imagine a scenario where products’ countries of origin are included in their descriptions, alongside estimated surcharges for import costs. This might enable shoppers to make more informed comparisons among similar products.
But wouldn’t that mean a lot of new work on the part of online merchants to maintain their price tables? The arithmetic might need to change as policies evolve, or even from shipment to shipment. It gets even more complex for products assembled with components from more than one country.
All that effort ultimately has to be paid for somehow, which means tariff costs will add operating costs that ultimately come out of the consumers’ pockets.
This is more a question of “how?” vs “if”. Consumers are bombarded with media takes on the tariff situation – some minimalized, others sensationalized, still others outright lies. Through what medium and with what message should retailers attempt to break through the noise? Should disclosures be conveyed to engaged customers through loyalty apps? Called out via in-store signage? Painstakingly printed on pricing labels? Reported to the masses via media interviews? As much as I would love to advocate for transparency and truth, attempts to deliver on it could be thankless, futile, or even damaging. In this environment, Amazon would seem to be the most powerful messenger, given its reach and that its marketplace is its marketing and message for the most part. But alas, Amazon has signaled it won’t be a profile in courage.
This article – by accident or deliberately – is confusing two quite different issues: pricing tranparency, and reporting operations. Certainly the first is, desirable…if not downright essential: if a product is advertised as costing $X, that should be the price…not $X plus a number of unavoidable fees tacked on. But disclosing how that $X was arrived at? No: telling us it’s $X, but would be this much less if this or that cost could be avoided, contradicts the very principal of tranparency. Companies that wish to plead their case (against tariffs) should use a forum other than the price tag to do so.
Retailers should be as transparent as possible through either in-store signage or printing on the receipt, on the website checkout page.. it is also becoming a tax on a tax as something that used to cost $10. with 7% sales tax had $0.70 in sales tax. Now that same item may cost $20.00 and have $1.40 in sales tax in addition to the Tariff fees. Showing all of this to the Consumer prior to the time of purchase or at checkout is going to become more important as time goes on.
Yes, “a tax on a tax”. I never thought about that.
Increases from any tariff will be a tax on a tax but not as extreme as a doubling. Tariffs are applied to value at point of delivery or wholesale value not retail value. The increase at retail attributed to tariff will vary based on markups from point of delivery.
Deciding to disclose the impact of a tariff on retail price should include an understanding of what your competitors are doing. Retail price should be fully burdened with tariff included for a fair comparison. If the price increase is substantial, justifying the increase by calling out the tariff impact makes sense.
As an example, the dramatic increases in raw material during covid caused us to call out those cost changes when making quotes that rose dramatically over prior quotes.
I expect some standard approaches to develop by industry.
Good point on the extra taxes. The impact of the tariffs are even more costly when you factor in the extra sales tax.
As you observe, the imposition of tariff-caused price increases could result in sales tax hikes – unless the sales tax for an item is calculated only on its pre-tariff product cost. Is this possible? Well we don’t pay sales tax on shipping charges today, so maybe…
Seems like it would require itemization within the shopping cart. Not to mention more complex maintenance of the price tables to reflect the actual tariff charges associated with each item, reflecting when and where it was shipped from.
Employees should be as transparent on tariff costs as they are with all their costs, including rent, employee costs, etc. Hey, why not include their employees’ commission on the product and profit margins too?
It’s a retailer’s job to simplify the sale and make it easy for the customer. Only a foolish retailer complicates pricing to satisfy their political bias.
Retailers can simplify tariff-related information by providing clear explanations on their websites or in-store materials. They can also offer customer support, train staff to explain tariffs, and use digital platforms to update customers on changes, fostering trust and transparency. Transparency about costs, including tariffs, enhances customer trust and loyalty, as shoppers value understanding what they pay for. A lack of transparency could erode trust, driving customers to seek alternatives that align with their values.
Consumers want transparency in commerce. Full stop. To the extent a retailer can, they should be transparent about any fees, surcharges, etc. that cause a price to increase, especially when they are not the cause of the price increase. Doing so builds and maintains trust between the consumer and the brand. That said, this can be complex for a marketplace where all of the required information about the origins of a product may not be provided by every seller. In that scenario it becomes difficult to offer the same level of transparency across the marketplace and across all sellers. So while desirable, this doesn’t come for free operationally. However, the reward for doing so measured in brand loyalty may far outweigh the operational costs in the long run. Transparency and trusts will generate happy and loyal customers.
Absolutely way more important to earn or maintain customer trust in the brand than any possible fallout reaction from price increases or naming added costs. Brand trust is hard to earn and easy to lose.
It should be 100% up to the retailer to decide whether to disclose tariff fees. I think most customers would appreciate the data. I think transparency is the way to go.
And, just occurred to me, something I hadn’t thought about, since there are no rules, what’s going to keep a less-ethical retailer from putting a tariff number out there that’s not real to pad some margin? Or, as these tariffs fluctuate and with this administration than can it be an hourly event, keep those fees accurate?
Absolute transparency must become the gold standard if retailers expect to earn—and keep—consumer trust in today’s market. The data makes it crystal clear: shoppers overwhelmingly rank clear, upfront pricing as essential to a positive experience, and the mere whiff of hidden fees or vague tariff surcharges is enough to send them to a competitor. Obscuring costs at checkout or blaming price increases on ambiguous “supply chain challenges” may offer short-term cover, but it erodes loyalty and credibility in the long run. Retailers who embrace radical transparency—not just in pricing, but in communicating why costs are shifting—will foster greater loyalty and stand out in a crowded, skeptical landscape. Putting clarity and honesty front and center can brands truly build lasting relationships with increasingly savvy consumers.
Put a bright red T on the shelf signaling it is a tariff. This nonsense that “retailers can afford them” has to be aggressively shown. If I had a store right now, I doubt I’d be purchasing much for back-to-school or holiday in case he changes his mind.
He’s enjoying the power way, way too much. He cut a deal with Britain, but God knows what he’ll do tomorrow. This is what we get for having an old, venal man in charge
It’s more damaging to surprise shoppers with hidden tariffs than to risk losing them with transparent pricing. Honesty builds trust, and trust turns into long term loyalty.
Complete and utter transparency is the way to keep the customers trust. The imposition of this whole tariff scenario was a complete ambush…on everybody. All the rules changed overnight. And then changed again. And are still changing. And until we can have some level of confidence that we’ve achieved some new normal, with some new, stable tariff structure, how is a customer supposed to evaluate prices? Just show them as simply as possible. Old price + tariff surcharge. It’s simple and it’s honest. And it provides total clarity on the cost of the new tariff paradigm. If customers want to support the politics and the math of the new tariff paradigm, there it is. The fact that they were lied to about who would pay the tariffs is kind of tough bananas for those who told the lies. If it’s short term pain for long term gain, show me the math. Customers may indeed get frustrated with retailers, but retailers didn’t lie. They are in the unfortunate position of having to expose the lie. We can’t shoot the messenger. We can ask, and expect, the retailer to report the facts as clearly as possible, and then we’ll all vote. Both with our wallet and at the ballot box.
Throughout the years, successful retailers and brands have entered into an implicit agreement based on trust, built on delivering on expectations for product quality, service, and accuracy in exchange for their ongoing purchases. The increasing centrality of social media channels as the new source of information for breaking news, social trends, government policies, and politics in general has significantly transformed the relationships retailers and brands have with their customers/consumers. This shift has made the concept of trust, central to any sustainable customer-facing strategy, a more challenging endeavor. The rise of partisanship and a lack of trust in traditional sources of information have placed a higher value on the veracity of information that forms the retailing relationships.
Given this evolving landscape, retailers and brands must communicate openly and honestly about the key issues that matter to customers. These issues include pricing, unexpected fees, sourcing, ingredient quality, inventory management, delivery speed, and return policies. In many ways, customers have come to depend on the stability of these relationships in a world that is constantly changing.
In product categories where customers are well-informed about prices due to frequent purchases, such as basics and groceries, they deserve a clear explanation of any changes: is it a price adjustment to cover new tariffs or a margin increase? In other categories, such as computers and electronics, with higher-priced items, transparency and explanation are key. In the apparel and footwear segment, where there’s a shift towards working through existing inventories, customers are likely to have questions about why their favorite color is no longer available. Addressing these concerns is crucial in maintaining trust and transparency.
Disclose accurate information that is desired and valued by your customers. In my case, yes, I would appreciate knowing accurate information about how tariffs have affected the price of things I purchase or use.