‘Drip pricing’ in retail is when consumers are shown an initial price for their good/service while additional fees are revealed later in the sales process. Consumers are often disproportionately influenced by the first headline price they see and can be drawn into paying more than they intended or needed to. UK consumer protection law requires retailers to provide people with the information they need to make informed purchase decisions.
ORR reviewed the ticketing websites and apps of 19 third-party ticket retailers (TPRs). Twelve of the 19 TPRs charge booking fees, and seven of these did not include their fees in the upfront price. ORR’s review found that booking fees ranged from £0.45 (per ticket) to £6.45 (per transaction) and finder’s fees were between 10-15% of the saving made on a split ticket.
The review also looked at 21 train companies, who are not permitted to charge ticket booking fees although they can charge certain fees such as postage costs for ticket delivery.
The key areas we want retailers to improve are:
- Ensuring the booking or finder’s fee is included within the upfront price.
- Ensuring that a clear breakdown of the fee and ticket price is provided at every stage, with appropriate prominence given to the fee.
- Ensuring consumers have access to readily available, transparent and accurate information about fees that they can read in advance of starting the booking process.
ORR has written to seven third-party retailers, highlighting its concerns and asking for details on how the company will address the findings. ORR plans to publish its letters and the retailers’ responses on the ORR website and will consider any next steps accordingly.
The regulator’s report comes at a time when the Department for Business and Trade (DBT) is expected to publish its findings of a wider consultation into price transparency that highlighted the risks of drip pricing for consumers.
Stephanie Tobyn, director of strategy, policy and reform, said:
Notes to editors
- Transparency of fees when buying rail tickets
- ORR’s review focused on four types of fees:
- booking fees, charged by many TPRs (train companies are not permitted to charge a booking fee);
- finder’s fees, charged by those TPRs who offer a split ticketing service , typically a percentage of the saving compared to a through ticket. (Split ticketing is where a journey is broken into sections, with a separate ticket for each part);
- fulfilment fees, charged by many retailers for some options for receiving tickets;
- refund fees, charged for cancelling or amending a ticket.
3. The Department for Business and Trade consulted on proposals on five key areas of consumer information transparency, with the aim of improving the quality and accessibility of information, including in relation to hidden fees and drip pricing. The consultation ran from 4 September 2023 to 15 October 2023: Smarter regulation: improving price transparency and product information for consumers - GOV.UK (www.gov.uk)