Drip pricing: new rules set to stop checkout charges
Hidden fees, otherwise known as drip pricing, are set to be banned under new proposals in the Digital Markets, Competition and Consumers (DMCC) Bill.
The new rules mean that mandatory charges (such as booking fees) must be included in the upfront price for products and services, preventing any nasty surprises at the checkout.
Here, we explain what drip pricing is, where you might have come across it – and how these changes might impact your online shopping.
What is drip pricing?
Unavoidable fees cost consumers £2.2bn every year, according to the Department for Business and Trade (DBT). And if you've booked flights, concert or cinema tickets online, you've probably come across drip pricing.
Drip pricing occurs when you're shown an initial price for a product or service, only to be slapped with additional, non-optional charges (such as booking fees) later on in the checkout process.
These sneaky charges can leave you feeling ambushed at the checkout. They also make it harder for you to compare the overall price of an order across different companies.
Which companies use sneaky fees?
Travel companies are some of the worst offenders when it comes to hidden charges. Research by the DBT found that 72% of the transport and communication sectors engaged in drip pricing.
You may have noticed these fees when you book train seats or flights. Or you might have noticed extra fees creeping into your order total when you book concert and cinema tickets.
Most ticketing sites add on a range of charges (such as booking fees, service charges and venue levies) to the face value cost of a ticket – and they rarely show all these fees upfront.
Drip pricing is used by more than half of entertainment providers and the hospitality industry, DBT research found.
- Find out more: how to beat Ryanair's drip pricing
What are the new rules?
The new rules, expected to come into force this spring, won't stop companies charging additional fees, but they will have to show them in the upfront price or at the start of the shopping journey.
These changes should help prevent any nasty surprises at the checkout, as well as allowing you to compare prices more easily between companies, ensuring you get the best price possible.
You may still incur extra charges with some online purchases, though.
This new legislation only applies to mandatory fees, not optional ones, so you can still incur extra costs further along the checkout journey if you add on things like airline seat reservations and luggage upgrades.
While it's encouraging to see the government clamping down on drip pricing, Which? believes further action may be needed to tackle other sneaky pricing tactics.
