Drip pricing is a strategy used by some sellers to lure in consumers by advertising deceptively low prices, only to reveal hidden mandatory fees after the consumer is on the verge of completing a transaction. The practice, which is pervasive for concert and event ticket sales as well as hotel and vacation rentals, increases consumer search time, complicates comparison shopping, and often causes consumers to spend more money than they otherwise would, by exploiting cognitive biases.
We submitted a petition to the Federal Trade Commission formally calling for a new rule banning the use of drip pricing. Under our proposal, all sellers would be required to disclose the full price of a product or service upfront, with any mandatory surcharges included as part of that total price. As our petition explains, the Commission can issue a regulation banning drip pricing under three distinct sources of authority: as a deceptive trade practice, unfair trade practice, and unfair method of competition.