The Central Government has recently issued a warning about ‘drip pricing’, a practice where companies initially display a lower price for a product or service but later add on additional fees during the purchase process. According to the Ministry of Consumer Affairs, this can lead to unexpected charges and increase the overall cost for consumers.
To illustrate how drip pricing works, the Department of Consumer Affairs provided an example of a shoe priced at ₹ 4,700. However, after including all additional charges, the total price increased to ₹ 5,100. This practice is often used to attract customers into initiating the purchasing process, with the hope that once they have invested time and effort, they will be less inclined to abandon the purchase upon discovering the additional costs.
Drip pricing can complicate comparison shopping and disadvantage sellers who provide more transparent pricing structures. Companies prefer to present a lower initial price to avoid alarming customers with unexpectedly high prices. The Government has advised consumers to be cautious of such practices and to seek assistance from the National Consumer Helpline (NCH 1915) if they encounter hidden charges.
To combat drip pricing and other unfair business practices, US President Joe Biden has announced that his administration is working to end these practices. Drip pricing is a strategy where only a portion of an item’s cost is initially displayed, with the full amount revealed later during the purchase process. This can involve withholding essential fees like local taxes or booking charges, or omitting necessary add-ons like internet access or amenities, which may be required for product or service usage. The price advertised may not accurately reflect the final cost to the consumer.
Consumers should be aware of drip pricing and take steps to protect themselves by carefully reviewing all fees and charges before making a purchase. They should also consider comparison shopping to find the best prices and avoid companies that engage in unfair pricing practices.
