Goodbye to drip pricing in your online shopping

Finally some good news! Shopping online is about to get much easier thanks to a ban on ‘drip pricing’. This is when businesses quote a price to lure you in, then add on additional, unavoidable fees that you can’t opt out of. As a result, what you are charged out at the checkout can be much higher.

Drip pricing is a big deal The Department for Business and Trade (DBT) found that these unavoidable fees cost us all £2.2 billion every year. The charges affect over half of all entertainment and hospitality transactions and nearly three quarters of transport and communication charges.

These new rules are part of the Digital Markets, Competition and Consumer Bill (DMCC). Drip pricing and fake reviews all now banned and much stronger enforcement powers have been granted to the Competition and Markets Authority (CMA) to enforce the rules that businesses must follow.

The headaches associated with online shopping should disappear soon… well, most of them (Picture: Adobe)

Not all additional charges are being banned though. Here’s my guide on what to watch for.

How do the new rules work?

Even though drip pricing is being banned, you won’t see the end of all add-on charges. The fees themselves aren’t being banned –the business must tell you up front about them.

So if you are buying tickets to a gig, you may have no choice but to pay reservation and booking fees. These fees must now be quoted in the price you see at the beginning of the process – not tacked on at the end. The same goes for things like installation fees for new broadband services.

However, though the new rules apply to the most egregious of offenders in the add-on charges game – airlines – many of their sneaky fees will not be covered by the new law. That’s because most airline’s additional fees are largely optional. If you aren’t obliged to pay for these services, they can still be charged later on when you’ve started the process of booking a flight.

Drip-pricing, micro-charging and other fees

Not all charges fall under the new drip-pricing rules. Here’s an overview.

Drip-pricing This is where businesses hide the true cost of goods or services by offering a cheap starting price. They then add on unavoidable extra charges, so what you pay at the checkout can be much higher. They must now tell you up front about the full cost including these fees.

Additional or add-on fees Some firms charge a dizzying array of extra fees. These aren’t covered by the new rules if they are optional. With airlines, you might consider taking luggage on holiday, or sitting with your family to be ‘essential’. But these charges still count as optional – and the airline can (currently) tack them on to your bill.

Micro-charging This is where businesses charge you small amounts for services or goods that used to be free. For example, some email providers now charge as much as £7.50 a month just to allow you to keep your current email address.

Ancillary charges This is the traditional term for any additional charge associated with something you purchase. Don’t be fooled - if you see this term, assume you’re being charged extra for something.

What if I’m faced with an unavoidable extra fee at the check-out?

Just because the law has changed and these unavoidable extra fees should not suddenly materialise at the point of payment, some businesses may still try it on.

If you find yourself faced with extra charges when you come to pay for goods or services, check to see if they can be cancelled our removed. If not, then you should have been warned about the charge up front. Take a screenshot of the payment screen on your phone or computer and make a formal complaint to the business. You can ask for some or all of the extra charge to be refunded if you feel you had no choice to pay it.

Oh and don’t forget to shop the business! Keep me posted if you spot anyone breaking the rules.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. Read more from him at this link