Research and analysis

Estimating the prevalence and impact of drip pricing

This research investigates the prevalence of online drip pricing across selected sectors and assesses the detriment it may cause to UK consumers.

From:
Department for Business and Trade
Published
4 September 2023

Documents

Estimating the prevalence and impact of online drip pricing: full report

PDF, 542 KB, 62 pages

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Estimating the prevalence and impact of online drip pricing: summary tables

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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
Published 4 September 2023