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A customer books a hotel online. The headline price looks great, £120 for two nights in London. They add it to their basket, enter their details, and head to checkout. Then the extras appear: a "weekend surcharge", a service fee, and a compulsory delivery charge for booking confirmation. By the time they click "pay", the bill has climbed to nearly £200. Multiply that experience across thousands of transactions, and it's easy to see why regulators are now stepping in.
This practice of advertising a low "headline" price and revealing unavoidable charges only later is known as drip pricing. It occurs when businesses "drip" mandatory charges into the buying process rather than showing the total cost upfront.
How is it regulated?
Since 6 April 2025, drip pricing has been prohibited in the UK under the Digital Markets, Competition and Consumers Act 2024 (DMCCA). The Competition and Markets Authority (CMA) has been given new enforcement powers, including the ability to fine businesses up to 10% of their global turnover in case of violations. It has also announced that drip pricing will be one of its early enforcement priorities, so businesses in all sectors should act now.
What businesses must do
The basic rule is simple: your website must display the total price upfront, covering all unavoidable fees and taxes. In other words, don't hold back compulsory charges until checkout. If the customer has no real choice but to pay, the cost needs to be visible from the start.
The rules distinguish between mandatory charges (which must always be included in the headline price) and optional charges (which can be shown separately if they are genuinely avoidable). These are explained below.
a) Mandatory charges
If a customer cannot complete the purchase without paying the fee, it is mandatory and must be included in the headline price. Examples include:
- a weekend surcharge added to a hotel booking when weekend dates are selected;
- an enrolment fee required to access online course content;
- a pick-up fee on top of car hire charges if applicable;
- fuel surcharges or young driver fees in car hire; or
- the total sum of all payments under a subscription (e.g., the full contract cost of a 12-month membership).
b) Optional charges
If the customer can choose to pay the extra extra fee, it is optional and may be shown separately. Examples include:
- paying extra for breakfast when booking a "room-only" hotel rate;
- choosing an extended warranty on a television or laptop;
- upgrading to premium or same-day delivery instead of standard delivery;
- selecting seat reservations or extra legroom on a flight; or
- opting for installation services when purchasing home appliances
Even though these optional charges may be displayed separately, they must still be presented clearly and brought to the customer's attention before they agree to pay.
Why this matters for your business
The principle of "total price upfront" sounds simple, but it can create challenges for depending on the product or service:
- Streaming platforms: service advertises "£9.99 per month" but ties customers into an 18-month contract. The total contract cost (annual fee) has to be clear from the start.
- Online retailers: product is shown at £800, but checkout reveals a compulsory £60 delivery fee because the store has no collection option. That delivery fee should be included in the upfront price.
- Event organisers: a ticket is advertised for £40, but at checkout a £6 booking fee and £3 payment processing fee are added. Those mandatory fees must be disclosed in the headline ticket price.
- Telecoms providers: a broadband deal is promoted at £25 per month, but there is a compulsory £35 "setup fee". That setup fee must be disclosed in the headline price.
The CMA has been clear: complexity is not an excuse. If the final cost can't be shown upfront, businesses must explain how it will be calculated, and that explanation must be as prominent as the headline price, not hidden in small print.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
