What is Drip Pricing?
Hidden fees, also known as "drip pricing," are set to be banned under new laws that aim to make online shopping more transparent for consumers. Drip pricing occurs when a retailer advertises a headline price, but the final price at checkout is higher due to additional charges.
Why is This Important?
These hidden fees make it difficult for consumers to compare prices across different retailers. According to the Department for Business and Trade, these surprise charges cost consumers £2.2 billion annually.
What Will Change?
The new rules will ban hidden fees and require businesses to provide clearer pricing information. Mandatory fees, such as booking fees for cinema and train tickets, will need to be included in the headline price or at the start of the shopping process. However, optional fees like airline seats and luggage upgrades will not be affected.
Who Will Be Affected?
Research by the Department for Business and Trade found that drip pricing is prevalent in various industries. It is used by 54% of entertainment providers, 56% of the hospitality industry, and 72% of the transport and communication sectors.
What Are the Benefits?
These new regulations aim to protect consumers from confusion, scams, and unexpected costs. By ensuring upfront pricing and banning fake reviews, customers will have an easier time comparing purchases and making informed decisions.
Other Changes and Reforms
Along with the ban on hidden fees, the Digital Markets, Competition and Consumers Bill will also address fake reviews. Website hosts will be held accountable for reviews on their platforms. Additionally, the Price Marking Order will be reformed to ensure consistent unit pricing, making it easier for consumers to compare products.
When Will These Changes Take Effect?
The measures are expected to be legislated as part of the Digital Markets, Competition and Consumers Bill and rolled out in the spring.
Practical Tips for Online Shopping
Here are some tips to help you cut costs when shopping online:
- Create a list of items you need to avoid overspending.
- Use price comparison tools like Google Shopping to compare prices across retailers.
- Only purchase items you actually need, not just because they are on offer.
- Take advantage of exclusive discounts and savings by becoming a member or signing up for newsletters.
- Search for discount codes online to find potential savings.
Remember, being an informed shopper can help you save money and avoid unnecessary expenses.
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