Can I suggest that it really doesn't matter as long as it is CLEARLY UNDERSTOOD BY EVERYONE IN ADVANCE. It's the surprise that leaves a bad taste, not really the cost or method... As someone else has already mentioned, they all end up costing about the same because if not:
1. They go bust because they're not charging enough.
2. They make lots of money for a very short period and then go bust because they're charging too much.