Drip Pricing: Ban on Hidden Fees for Online Customers on the Horizon

Drip pricing, the practice of hiding fees from online customers, is to be outlawed under new legislative proposals.

Additionally, companies will be required to combat fake reviews and ensure clearer pricing on supermarket shelves. This follows a governmental review highlighting the need for improved price transparency among businesses.

The upcoming Digital Markets, Competition and Consumers Bill will encompass these regulations. Drip pricing often occurs in the final stages of online shopping, where initial prices are later supplemented by extra charges.

This is especially prevalent in the entertainment, hospitality, transport, and communication industries and costs consumers approximately £2.2 billion annually.

Under the proposed regulations, all compulsory charges should be included in the advertised online prices from the outset. This includes any non-negotiable booking fees for events or travel.

However, optional extras such as airline seat selection or extra luggage will not fall under this rule. Implementation is scheduled for this spring.

Kevin Hollinrake, the Minister for enterprise, markets, and small business, emphasizes that while modern shopping offers ample choices, it also increases the risk of misleading or costly tactics. The Bill aims to facilitate price comparison for customers and protect them from false reviews.

The Department for Business and Trade notes the impact of reviews on consumers, with 90% considering them during purchases, influencing the £224 billion spent online in 2022.

The Competition and Markets Authority (CMA) supports new measures, which will hold website hosts responsible for ensuring the authenticity of reviews on their platforms.

The reform will also extend to the Price Marking Order (PMO), obligating sellers to display the total selling price and unit price, such as per kilogram, including during promotions. This is intended to help consumers compare products and discern the best value more easily.