CANADA – Allegations of “Add-on pricing”, or “drip pricing”, have become a hot topic in recent years as consumers have moved towards making more purchases online. Drip pricing can be thought of as the incremental disclosure of additional fees. Bit-by-bit, these add-ons can cause a discrepancy between the final price of an item and the original listed price. One common example is the addition of airline baggage fees, which can dramatically increase total airfare prices. Other examples of drip pricing include:
- delivery fees for event tickets;
- municipal taxes charged by hotels;
- rental car insurance fees; and
- bank withdrawal fees.
While the concept of drip pricing has existed for some time, the advent of e-commerce has given rise to increased litigation and regulatory risk for businesses selling online services and products. Website interface design allows businesses to be more flexible in how they display and structure their pricing, however, the same flexibility can lead to pitfalls, prompting consumers to respond with class proceedings based on allegations of deceptive marketing practices.