What Is drip pricing? UK Compliance checklist for businesses
Businesses selling to consumers must review how they display their prices following the introduction of the Digital Markets, Competition and Consumers Act 2024 (DMCCA). The DMCCA prohibits "drip pricing", and businesses that do so can be fined up to 10% of their global annual turnover or £300,000, whichever is higher. The Competition and Markets Authority has been clear that “drip pricing” is a key focus area for them, so it is important that you do not get caught out.
What is drip pricing?
Drip pricing is where a product or service is advertised for sale but the mandatory fees relating to it are added a later stage in the customer’s purchase journey, typically at the point of checkout.
This checklist explains what drip pricing is and the practical steps businesses can take to reduce compliance risks.
Drip pricing compliance checklist
Show the total price upfront
Businesses must advertise the total price of the product or service upfront, where possible. This includes all mandatory fees such as booking, service or admin fees and any mandatory taxes, duties and regulatory charges. Consumers must not be ambushed with any mandatory fees at a later stage, for example, during the checkout process.
Explain any variable charges clearly
Where the total price cannot be given in advance (for example, because of variable geographical delivery costs that change based on the customer’s location), you must provide the calculation method used to calculate these additional costs upfront in equal clarity and prominence to the initial headline price.
Include recurring subscription costs
Where the product or service is provided on a subscription basis, you must include all recurring contract term costs in the primary figure (for example, monthly charges).
Ensure marketing reflects the final price
All marketing and advertising must reflect the true total cost. You must not lure customers under the pretence of low prices only for these to be increased at checkout by mandatory fees and costs.
Examples of drip pricing
- Advertising concert tickets without displaying the compulsory booking fee.
- Displaying hotel prices before adding mandatory resort charges.
- Showing subscription prices that exclude compulsory monthly platform charges.
Check out our recent articles on StubHub and the AA’s fines for drip pricing as well as the CMA’s investigation into Ryanair for potentially engaging in the prohibited practice.
Review your pricing practices
If your business sells products or services to consumers, now is a good time to review your pricing practices. Our commercial and consumer law team advises retailers, manufacturers, digital platforms and service providers on compliance with the DMCCA and wider UK consumer protection legislation.
Get in touch with David Wozniak on [email protected] or 0191 211 7831 to ensure that your pricing practices are UK consumer law compliant.
Drip pricing is where a product or service is advertised for sale without all of the unavoidable fees, charges or taxes specified at the outset, only for them to be disclosed at a later stage in the customer’s purchase journey, typically at the point of checkout.
Yes, drip pricing is an unfair commercial practice and is prohibited under the DMCCA.
Yes, the DMCCA applies to businesses selling goods and services to consumers in the UK, including those selling online.
Mandatory delivery charges cannot be excluded and should be advertised as part of the headline fee. If multiple paid delivery options exist, the cheapest mandatory option must be included in the upfront total price. If there are premium delivery options such as next-day delivery, these do not need to be included in the total headline price although it should be clear that these are added extras.
Any charge that a consumer cannot avoid incurring if they want to purchase the goods or services advertised.
The rules around drip pricing extend to recurring charges/subscriptions. The total price to be paid over the entire contract term, including any compulsory platform charges, must be clearly stated at the outset.