Drip pricing

rdf:langString Drip pricing

rdf:langString Drip pricing is a technique used by online retailers of goods and services whereby a headline price is advertised at the beginning of the purchase process, following which additional fees, taxes or charges, which may be unavoidable, are then incrementally disclosed or "dripped". The objective of drip pricing is to gain a consumer's interest in a misleadingly low headline price without the true final price being disclosed until the consumer has invested time and effort in the purchase process and made a decision to purchase. Naïve consumers will purchase based on headline price and sophisticated consumers will consider total cost when comparing offers. Drip pricing can distort competition because it can make it difficult for businesses with more transparent pricing practices to compete on a level playing field. Many jurisdictions have enacted legislation to outlaw drip pricing of fees, taxes and surcharges. For example, throughout the European Economic Area and most of the rest of Europe, retailers must include VAT in prices given to consumers. Article 22 of Directive 2011/83/EU on Consumer Rights outlaws the default selection of additional drip-priced charges such as pre-ticked boxes on websites; this is enacted in the United Kingdom under Regulation 40 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.