The Hidden Cost of New Fees: What Event Leaders Can Learn from Southwest’s Misstep

When bags go from free to fee—trust takes off.

When Southwest Airlines recently announced a new $35 fee for checked bags, it didn’t just spark outrage—it violated a brand promise. For years, “Bags Fly Free” wasn’t just a slogan; it was a pillar of the airline’s identity and a differentiator in a fee-heavy industry.

From a consumer psychology standpoint, this wasn’t just a price hike—it was a breach of trust. And if you’re leading conferences, trade shows or learning programs, the lesson is clear: fees aren’t just math—they’re emotional.

Here’s how the psychology behind Southwest’s stumble maps directly onto your event pricing strategy.

Loss Aversion: New Fees Feel Like a Takeaway

When customers perceive they’re losing something they once had, it feels worse than never having had it at all. That’s the foundation of loss aversion—a well-documented psychological principle.

For Southwest, the new baggage fee wasn’t viewed in isolation—it was viewed in contrast to years of free bags. The emotional response? “You took something from me.”

If your event attendees are used to perks—free receptions, recordings, networking lounges—and you begin charging for them, it can feel like a downgrade, not a value shift. Even a modest fee can generate frustration if it’s perceived as a loss (Dooley, 2025).

Breaking a Brand Promise Hurts More Than the Cost

Southwest's identity was built around being consumer-friendly and anti-fee. That’s why this change struck a nerve. The backlash wasn’t simply about price—it was about perceived betrayal.

Your event brand might be built on “all-inclusive access” or “community-driven programming.” If you add charges for essentials like speaker sessions or access to materials that used to be included, you risk violating what your audience believes about you. Once that trust is gone, it’s hard to rebuild (Dooley, 2025).

Surprise Fees Undermine Trust

Southwest didn’t ease into this policy change. There wasn’t a phased rollout or a compelling story behind the change. There was just… a new fee.

Event attendees react the same way. If you’re going to introduce a new cost:

• Give people advance notice

• Explain the reasoning

• Frame it in terms of value, not just budget need

People are more forgiving when they understand the why. They’re far less forgiving when they feel blindsided.

Your Attendees Compare You to You

This is a big one. Consumers don’t just compare you to competitors. They compare you to the last time they experienced your event.

That means last year’s “included lunch” becomes the measuring stick. If it’s gone, it’s not just a change—it’s a disappointment. If you remove items or restrict access in a way that looks like corner-cutting, it will feel like a step backward—even if your pricing is still competitive.

Bundle It or Break Trust: What the Research Says About Pricing

Instead of layering in new fees, consumer psychology research suggests a better approach: bundle them into the upfront cost. Why?

• Minimized “pain of paying”: Behavioral economist Richard Thaler showed that people experience emotional discomfort with every transaction (Thaler, 1999). Bundling reduces that to a single pain point, instead of multiple.

• Avoid the drip pricing trap: According to the Journal of Consumer Policy, drip pricing (revealing fees gradually) leads to lower satisfaction and trust—even if the final price is comparable (Xia & Monroe, 2004).

• Higher perceived value: When you clearly communicate what’s included in a bundle, even if attendees don’t use every feature, they perceive the package as more valuable (Soman & Gourville, 2001).

• Mission-aligned organizations face more risk: In values-driven spaces (like nonprofits or professional associations), attendees are especially sensitive to fairness and motives behind pricing changes (Feinberg, 2012). Bundling feels more transparent and trustworthy.

In short: bundling is better. It reduces friction, boosts trust, and protects your brand reputation—something Southwest just put at risk.

The Takeaway: It’s Not Just the Fee—It’s the Feeling

The backlash to Southwest’s bag fee wasn’t about the $35. It was about what it meant to loyal customers: a broken expectation, a shift in values, a loss of trust.

In events, the same principle applies. Be thoughtful, transparent, and strategic when introducing new fees or unbundling services. Otherwise, you risk paying a much bigger price—in brand loyalty and attendee satisfaction—than the fee was ever worth.

Here’s How We Can Help

At Eventcraft Studios, we help event leaders build pricing models that protect trust, maximize value, and align with your event’s mission. Whether you're navigating new budget realities or redesigning your attendee experience, our strategy-first approach ensures your pricing decisions strengthen—not weaken—your brand. Let’s reimagine how you deliver value.

References

Dooley, R. (2025, May 29). Southwest Airlines just made a costly mistake in consumer psychology. Forbes. https://www.forbes.com/sites/rogerdooley/2025/05/29/southwest-airlines-just-made-a-costly-mistake-in-consumer-psychology/

Feinberg, F. M. (2012). Fairness and pricing: The psychology of price acceptability. Journal of Marketing Research, 49(1), 14–28. https://doi.org/10.1509/jmr.10.0428

Soman, D., & Gourville, J. T. (2001). Transaction decoupling: How price bundling affects the decision to consume. Journal of Marketing Research, 38(1), 30–44.

Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183–206.

Xia, L., & Monroe, K. B. (2004). Price partitioning and its impact on consumer evaluations. Journal of Consumer Psychology, 14(1–2), 115–126.