Why Companies Should Do Away With “Drip Pricing”

by Chris Bjorklund

Have you ever been lured by an ad for a low-priced ticket to a baseball game or concert? How many times have you seen an exceptional price for a hotel room and were motivated to make an online reservation? What may have stopped you in your tracks (or not) were all the hidden fees that weren’t disclosed at the outset. As you get close to completing the transaction, other hidden charges are added: a service fee, a processing fee, a convenience fee, a COVID-cleaning fee, a parking fee, a resort fee, and a fee to use the gym and even the swimming pool. In some cases, the fees can be as much as 50% of the originally advertised price. According to the San Francisco Chronicle, in the Bay Area this summer, fees for events as a percent of the advertised ticket prices ranged from 5% to almost 30%!

Hiding fees (also known as “drip pricing”) is a common practice. What I dislike is that mandatory surcharges are added as the consumer is close to finalizing an order. It’s true that consumers are free to decline the offer and keep shopping, but some people don’t want to walk away from a purchase after investing a lot of time and effort.

If all sellers would be transparent about their prices up front, it would level the playing field among sellers and make it easier for consumers to compare offers using actual prices. A few ticket vendors are now offering that option, allowing consumers to see full ticket prices before they make a purchase. Let’s hope that practice catches on before the Federal Trade Commission decides to ban drip pricing. Such a proposal is under consideration this year.