Estimating
the prevalence and impact of online drip pricing: full
report
Estimating
the prevalence and impact of online drip pricing: summary
tables
Details
Drip pricing occurs when consumers are shown an initial price for
a good or service while additional fees are revealed (or
“dripped”) later in the checkout process.
This research estimates the prevalence of online drip pricing
across the retail, hospitality, entertainment and transport and
communication sectors. It also estimates the detriment caused to
consumers as a result.
It found that:
- 46% of the 525 online and mobile app providers in our sample
include at least one dripped fee (not including delivery fees) as
part of their checkout process
- out of the 4 sectors in our sample (entertainment,
hospitality, retail, transport and communication), dripped fees
are most frequently found in the transport and communication
sector (72% of providers) and least frequently in the retail
sector (15% of providers) once delivery fees are excluded
- nearly half of providers (41%) included dripped fees that met
more than one criterion of harm (mandatory, pre-selected and
optional, presented past the halfway point of the checkout
process, costing more than 25% of the product price, 3+ dripped
fees)
- across all sectors, service fees (fees charged to
receive/purchase a service, such as booking or processing fees)
tended to meet the most criteria of harm
- after factoring in provider market share, consumer
expectations and the size/degree of harm of the dripped fees,
dripped fees (other than delivery fees) are estimated to cause UK
consumers to spend an additional £595 million to £3.5 billion
online each year
