Pricing, fees and drip pricing: showing the real number

A price is a claim. If the advertised number is not the number the buyer ends up paying because compulsory charges are added later, the advertisement has asserted something untrue about cost.

What makes drip pricing a problem

Drip pricing is the practice of revealing charges progressively through a purchase, so that the first number shown is lower than the amount actually payable. The UK’s Digital Markets, Competition and Consumers Act 2024, whose unfair commercial practices provisions apply to conduct from 6 April 2025, identifies drip pricing specifically among the practices it prohibits, alongside fake reviews — both were previously handled more diffusely.

The underlying principle is older and applies far beyond the UK: a price that omits compulsory charges is a misleading action, because it causes a transactional decision the consumer would not have made had the total been shown.

Two categories of charge

The distinction that resolves most of this:

• Compulsory charges — booking fees, service charges, mandatory delivery, taxes where they are not legally required to be shown separately, processing fees. These are part of the price and should be included in the advertised figure.
• Optional extras — insurance, a premium tier, faster delivery. These may be presented separately, provided the default is not preselected in a way designed to be overlooked.

The test is not the label but the effect: if the purchase cannot be completed without the charge, the charge is part of the price.

Inertia is a regulated practice, not a clever tactic

A preselected add-on, a checkbox pre-ticked, a bundle the customer must dismantle to avoid — these rely on the customer not noticing. Several regimes now treat them as unfair rather than merely irritating, and the UK Act names subscription traps and prechecked options among the practices in scope.

The commercial case against them is stronger than the legal one. A customer who discovers a fee after committing to the purchase is a refund request and a negative review; a customer told the total up front is a customer who has already agreed to it.

Where the regimes differ, precisely

This is one of the areas where a page written for one country is wrong in another, and the difference is not subtle.

• European Union. The Price Indication Directive requires the selling price and, where relevant, the price per unit of measure to be shown, including taxes. The Omibus Directive added rules on price reductions, which must be based on the lowest price in a stated prior period.
• United Kingdom. The DMCCA 2024 sets a single prohibition on unfair commercial practices and gives the CMA direct enforcement powers, including fines, without going to court. Drip pricing is named within it.
• United States. Regulation is largely sectoral and state-level, enforced by the Federal Trade Commission under its unfair-or-deceptive standard. There is no single federal total-price rule, which does not make drip pricing safe — it makes the risk depend on the channel and the state.

The practical consequence: the same checkout can be compliant in one market and not in another. Where you sell into several, the safest single standard is the strictest one you face — showing the total including tax and compulsory charges wherever you are permitted to.

Discounts and reference prices

A discount is a claim about a former price, and it is the most commonly made claim in advertising of any kind. The question a regulator asks is simple: was that price genuinely charged, for a genuine period, before the reduction?

A reference price that was set yesterday, for a product that has only ever sold at the lower figure, is not a discount. Several regimes now specify the period over which the prior price must be measured, which converts a vague standard into an arithmetic one — and an arithmetic standard is worth knowing before you set the strikethrough.

The general substantiation method, which applies to a price claim as much as to any other, is in advertising claims and substantiation.

A checklist for the page

1. Every compulsory charge is inside the headline number.
2. Tax is shown, or shown as included, in the way the destination market requires.
3. Extras are opt-in rather than opt-out.
4. Any reference price was genuinely charged for the required period.
5. The total at checkout matches the total in the advertisement.
6. The stated price per unit is shown where the product is sold by measure.

Drip pricing by degree

Not every late charge is unlawful. A fee disclosed before the customer commits is late but not deceptive; the problem begins when the charge appears after a decision has effectively been made. The test is timing relative to commitment, which is why the same fee can be lawful at one point in a flow and misleading at another.

The practical rule for a checkout: no compulsory charge may appear for the first time after the customer has entered payment details. That single constraint satisfies most regimes and removes the flow design that generates complaints.

Currency and cross-border pricing

Where a customer buys from another country, the total depends on the exchange rate and on whether the merchant or the customer bears the conversion. A price shown in the customer currency and then charged in the merchant currency, with a conversion added at the card issuer, is a total the customer did not see.

Showing the currency the customer will actually be charged in, or stating the conversion approach, removes the dispute. Where local law requires the total in local currency, showing anything else is a pricing claim problem rather than a UX one.