{"id":171,"date":"2025-09-05T13:29:55","date_gmt":"2025-09-05T13:29:55","guid":{"rendered":"http:\/\/www.ccsbinc.com\/?p=171"},"modified":"2025-09-11T16:30:13","modified_gmt":"2025-09-11T16:30:13","slug":"what-is-drip-pricing-and-why-is-it-banned-in-the-uk","status":"publish","type":"post","link":"http:\/\/www.ccsbinc.com\/index.php\/2025\/09\/05\/what-is-drip-pricing-and-why-is-it-banned-in-the-uk\/","title":{"rendered":"What is drip pricing, and why is it banned in the UK?"},"content":{"rendered":"<\/p>\n<p><span style=\"font-weight: 400\">There is nothing more frustrating than when you think something you&rsquo;re buying is cheap, only to be hit with a hefty charge at the end of checkout.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Businesses have been doing this for decades. Known as &ldquo;drip pricing&rdquo;, this deceptive sales tactic lures customers in with cheap prices, only to add extra mandatory charges during checkout.<\/span><\/p>\n<p><span style=\"font-weight: 400\">However, the UK&rsquo;s new Digital Markets, Competition and Consumers Act 2024 (DMCC) has enforced a ban on drip pricing, meaning businesses can no longer use it as a legal <\/span><a href=\"https:\/\/startups.co.uk\/strategy\/pricing-strategy-guide\/\"><span style=\"font-weight: 400\">pricing strategy<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Below, we&rsquo;ll share what drip pricing is, the new laws around it, and how your business can remain compliant with the DMCC.<\/span><\/p>\n<div class=\"highlight-box\">\n<div class=\"highlight-box-decor\"><\/div>\n<div class=\"highlight-box-headline\">\n<p>                            <span class=\"highlight-box-title\"><br \/>\n                    &#128161;Key takeaways                <\/span>\n                    <\/div>\n<div class=\"highlight-box-content\">\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Drip pricing is a practice where a business <\/span><b>advertises a product or service at a low initial price, but then adds mandatory fees later<\/b><span style=\"font-weight: 400\"> in the purchasing process.&nbsp;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The most common industries to use drip pricing include<\/span><b> airline travel, hospitality, ticketing platforms, and online retail<\/b><span style=\"font-weight: 400\">.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Under the UK&rsquo;s<\/span><b> Digital Markets, Competition and Consumers Act 2024 (DMCC)<\/b><span style=\"font-weight: 400\">, drip pricing is now illegal as of April 2025.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Businesses can be <\/span><b>fined up to 10% of their annual global turnover <\/b><span style=\"font-weight: 400\">if they are found to use drip pricing.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Businesses <\/span><b>must now include all mandatory costs in the total price <\/b><span style=\"font-weight: 400\">from the beginning of the checkout process.<\/span><\/li>\n<\/ul>\n<\/p><\/div>\n<\/p><\/div>\n<div class=\"vc_empty_space\" style=\"height: 32px\"><\/div>\n<div class=\"jumplinks-content\">\n<ul class=\"jumplinks-content-list\">\n<li class=\"jumplinks-content-item\">\n                <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-what-is-drip-pricing\">What is drip pricing?<\/a>\n            <\/li>\n<li class=\"jumplinks-content-item\">\n                <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-what-are-the-new-laws-on-drip-pricing\">What are the new laws on drip pricing?<\/a>\n            <\/li>\n<li class=\"jumplinks-content-item\">\n                <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-what-do-businesses-need-to-do-to-comply\">What do businesses need to do to comply?<\/a>\n            <\/li>\n<\/ul>\n<\/div>\n<div class=\"jumplink-anchor-section\">\n<div class=\"jumplink-anchor-pointer\" id=\"link-what-is-drip-pricing\"><\/div>\n<\/div>\n<h2>What is drip pricing?<\/h2>\n<p><span style=\"font-weight: 400\">Drip pricing is a deceptive pricing strategy where a business will advertise its products or services at a low price, but then add compulsory and unavoidable costs later in the transaction process.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Understandably, drip pricing has historically been controversial among consumers for its lack of transparency and misleading people about the price, causing them to spend more money than they intended.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400\">Research by <\/span><a href=\"https:\/\/www.linkedin.com\/pulse\/rise-fall-drip-pricing-what-how-can-harmful-hartley-law-jfy8e\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400\">Hartley Law<\/span><\/a><span style=\"font-weight: 400\"> found that 46% of 525 online and mobile apps had at least one dripped fee and were most frequently found in the transport and communications sector.&nbsp; Additionally, statistics by <\/span><a href=\"https:\/\/www.boyesturner.com\/news-and-insights\/drip-pricing-ban-new-rules-now-force#:~:text=What%20is%20drip%20pricing?,of%20a%20misleading%20headline%20price.\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400\">Boyes Turner<\/span><\/a><span style=\"font-weight: 400\"> revealed that drip pricing has cost UK consumers as much as &pound;2.2bn a year.<\/span><\/p>\n<h3>Which industries use drip pricing?<\/h3>\n<p><span style=\"font-weight: 400\">There are several sectors that have used drip pricing over the last few decades. While the specific term wasn&rsquo;t coined until 2009, the practice itself dates back as far as the 1970s. The most common industries that have used drip pricing include:<\/span><b><\/b><\/p>\n<ul>\n<li><b>Travel and airline:<\/b><span style=\"font-weight: 400\"> They charge the initial fare, plus mandatory charges for things like checked baggage and seat selection.<\/span><\/li>\n<li><b>Ticketing platforms:<\/b><span style=\"font-weight: 400\"> Ticket sellers often add extra &ldquo;service fees&rdquo; or &ldquo;booking fees&rdquo; that are only revealed at the final stage of checkout.<\/span><\/li>\n<li><b>Hospitality:<\/b> <a href=\"https:\/\/startups.co.uk\/guides\/how-to-start-a-restaurant\/\"><span style=\"font-weight: 400\">Restaurant businesses<\/span><\/a><span style=\"font-weight: 400\"> may add <\/span><a href=\"https:\/\/startups.co.uk\/payment-processing\/service-charges-uk\/\"><span style=\"font-weight: 400\">a service charge<\/span><\/a><span style=\"font-weight: 400\"> to the bill at the end of the meal, while takeaway firms might charge a delivery fee to the final price.<\/span><\/li>\n<li><b>Online retail: <\/b><span style=\"font-weight: 400\">An online store will advertise an initial price for a product or service, and then add mandatory charges later in the checkout process (e.g. booking or admin fees).<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">However, sometimes drip pricing isn&rsquo;t intentional and can happen for a few reasons. For example, a lack of communication between departments (leading to important fees being overlooked in marketing materials), not being clear on which charges count as mandatory, or even just a bad web design that hides costs until the last step.<\/span><\/p>\n<div class=\"jumplink-anchor-section\">\n<div class=\"jumplink-anchor-pointer\" id=\"link-what-are-the-new-laws-on-drip-pricing\"><\/div>\n<\/div>\n<h2>What are the new laws on drip pricing?<\/h2>\n<p><span style=\"font-weight: 400\">In April 2025, the UK&rsquo;s Digital Markets, Competition and Consumers Act 2024 (DMCC) came into effect, banning drip pricing.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400\">Under this new law, businesses are required to be completely transparent about the final price of a product or service at the very beginning of the sales process. The total price must include mandatory fees, such as administration fees, booking fees, service charges, and taxes. Optional costs do not need to be included.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Fees that cannot reasonably be calculated at the start are exempt from this rule. However, businesses must still provide clear information about how this price will be calculated, and it must be displayed as prominently as the headline price.<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/p>\n<p><span style=\"font-weight: 400\">If a business breaches this law, the Competition and Markets Authority (CMA) can fine up to 10% of its annual global turnover.<\/span><\/p>\n<h3>Which businesses are affected?<\/h3>\n<p><span style=\"font-weight: 400\">The new rules on drip pricing will impact all consumer-facing businesses, and any UK business selling goods or services online must comply, or face fines from the CMA.<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/p>\n<p><a href=\"https:\/\/startups.co.uk\/guides\/how-to-start-an-ecommerce-business\/\"><span style=\"font-weight: 400\">Ecommerce stores<\/span><\/a><span style=\"font-weight: 400\">, digital service providers, and subscription-based services will be most affected. Additionally, sectors that previously used drip pricing &mdash; such as airline travel, event ticketing and hospitality &mdash; and business-to-business (B2B) firms will also have to comply with these new rules.<\/span><\/p>\n<div class=\"jumplink-anchor-section\">\n<div class=\"jumplink-anchor-pointer\" id=\"link-what-do-businesses-need-to-do-to-comply\"><\/div>\n<\/div>\n<h2>What do businesses need to do to comply?<\/h2>\n<p><span style=\"font-weight: 400\">We&rsquo;ve gone through what drip pricing involves and the DMCC ban, but how can your business avoid getting in trouble with the law? Here are five steps you can take to ensure your business remains compliant with the regulations.<\/span><\/p>\n<h3>1. Be transparent about your pricing<\/h3>\n<p><span style=\"font-weight: 400\">The first and most obvious thing to do is to be clear and transparent about your pricing.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400\">This means you should include all mandatory fees in the total price of your product or service. It might also be worth implementing a price calculator or a breakdown of the prices so that customers fully understand what they&rsquo;re paying for. This not only ensures compliance but can also improve the <\/span><a href=\"https:\/\/startups.co.uk\/marketing\/tips\/customer-service-skills\/\"><span style=\"font-weight: 400\">customer experience<\/span><\/a><span style=\"font-weight: 400\"> when they&rsquo;re purchasing from you.<\/span><\/p>\n<h3>2. Review your checkout process<\/h3>\n<p><span style=\"font-weight: 400\">Optional fees do not need to be included in the total price. However, you should review your checkout process so that any optional extras (e.g. gift wrapping, late checkout, or upgrades) are clearly presented, not pre-selected, and easy to decline.<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/p>\n<h3>3. Update your platforms<\/h3>\n<p><span style=\"font-weight: 400\">You should carry out an audit of your <\/span><a href=\"https:\/\/startups.co.uk\/websites\/creating\/how-to-create-a-business-website\/\"><span style=\"font-weight: 400\">business website<\/span><\/a><span style=\"font-weight: 400\">, marketing materials, and current ads. That way, you can review the pricing information on these platforms to ensure that all mandatory fees are included, and no claims or promotions are considered misleading under the new rules.<\/span><\/p>\n<h3>4. Train your staff<\/h3>\n<p><span style=\"font-weight: 400\">If you have marketing or sales employees on your team, provide them with adequate training (e.g. workshops or online courses) so that they have a good understanding of the new rules. Robust internal procedures should also be implemented to ensure compliance, such as a content\/ad approval workflow and continuous monitoring of promotional content.<\/span><\/p>\n<h3>5. Stay informed<\/h3>\n<p><span style=\"font-weight: 400\">Finally, staying on top of any relevant updates and enforcement decisions by the CMA, plus other regulatory bodies, such as the Advertising Standards Authority (ASA), will help you spot potential issues early, change your practices, and show that you&rsquo;re taking compliance seriously.&nbsp;<\/span><\/p>\n<h2>What else is in the DMCC?<\/h2>\n<p><span style=\"font-weight: 400\">Aside from the ban on drip pricing, the DMCC has also introduced new rules on <\/span><a href=\"https:\/\/startups.co.uk\/marketing\/tips\/subscription-business-model\/\"><span style=\"font-weight: 400\">subscription models<\/span><\/a><span style=\"font-weight: 400\"> and fake reviews.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Any reviews that aren&rsquo;t based on genuine customer experience are banned. Businesses are no longer allowed to submit, commission, or publish fake reviews. It is also illegal to publish reviews that hide the fact that they&rsquo;re incentivised (e.g. offering a reward to a customer in exchange for a positive review).<\/span><\/p>\n<p><span style=\"font-weight: 400\">For businesses offering a subscription service, the DMCC rules mean that businesses must provide specific information about the subscription before the customer signs up. Consumers also have the right to cancel a subscription within 14 days of entering the contract and receive a full refund, as well as easily cancel without any complicated or unnecessary steps.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400\">All in all, drip pricing is not a lawful pricing strategy, and it could land your business in serious trouble if you&rsquo;re caught using it. What&rsquo;s more, intentionally misleading customers will inevitably cause reputational damage, making you seem untrustworthy and dishonest.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400\">Being transparent about mandatory charges and staying compliant with the DMCC will help build trust with your customers and make the buying process much smoother.<\/span><\/p>\n<p><b>Struggling to decide on how to price your products or services? Read our guide on the <\/b><a href=\"https:\/\/startups.co.uk\/strategy\/pricing-strategy-guide\/\"><b>top pricing strategies<\/b><\/a><b> to find the best fit for your business.<\/b><\/p>\n<p>The post <a href=\"https:\/\/startups.co.uk\/strategy\/what-is-drip-pricing\/\">What is drip pricing, and why is it banned in the UK?<\/a> appeared first on <a href=\"https:\/\/startups.co.uk\">Startups.co.uk<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p class=\"text-justify mb-2\" >There is nothing more frustrating than when you think something you&rsquo;re buying is cheap, only to be hit with a hefty charge at the end of checkout. Businesses have been doing this for decades. Known as &ldquo;drip pricing&rdquo;, this deceptive sales tactic lures customers in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-171","post","type-post","status-publish","format-standard","hentry","category-startups"],"_links":{"self":[{"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/posts\/171","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/comments?post=171"}],"version-history":[{"count":1,"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/posts\/171\/revisions"}],"predecessor-version":[{"id":172,"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/posts\/171\/revisions\/172"}],"wp:attachment":[{"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/media?parent=171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/categories?post=171"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.ccsbinc.com\/index.php\/wp-json\/wp\/v2\/tags?post=171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}