Centre Issues Warning Against ‘Drip Pricing’, What Is It?

Drip pricing has become a hot topic in consumer affairs, and recently, the Centre issued a warning about it. But what exactly is it, and why should consumers be aware of it? Let’s dive into the details.

What is Drip Pricing?

Drip pricing is a pricing strategy used by businesses where only a portion of an item’s cost is initially displayed. The full amount is revealed later during the purchase process. Here are some key points about drip pricing:

Hidden Charges: It can surprise consumers with “hidden charges.” These charges are often not apparent upfront and can catch buyers off guard.

Surges in Charges: The Centre’s warning advises consumers to seek assistance if they encounter sudden surges in charges on a product’s Maximum Retail Price (MRP).

Sample Scenario: Imagine buying a pair of shoes priced at ₹4,700. However, after all the charges included in the drip pricing are added, the final cost goes up to ₹5,1001.

How Does it Work?

The rationale behind drip pricing is that once shoppers are invested in the shopping process, they may commit to a purchase even after additional fees are revealed. Here’s how it works:

Initial Display: Only a partial cost (the “headline price”) is initially shown to consumers. This lower price is meant to attract attention.

Revealing Additional Fees: As the buyer progresses through the purchase process, essential fees (like local taxes or booking charges) are disclosed. These fees were not part of the initial advertised price.

Comparison Shopping Challenges: It complicates comparison shopping because consumers cannot accurately compare prices across different products or services.

Transparency Issues: Sellers who provide more transparent pricing structures are at a disadvantage when competing with businesses using drip pricing.

Centre’s Warning and Consumer Awareness

The Department of Consumer Affairs, managed by the Ministry of Consumer Affairs, recently issued a warning against this pricing. They emphasized the need for consumers to seek assistance if they encounter hidden charges. The National Consumer Helpline (NCH) is available for consumers to report such instances.

Global Perspective

It’s not unique to India. In the United States, President Joe Biden’s administration is working to end the practice this and other “junk fees” that can deceive consumers. The goal is to ensure transparency and protect buyers from unexpected costs.

Conclusion

As consumers, it’s essential to be aware of drip pricing and recognize when we might be facing hidden charges. By staying informed, we can make better purchasing decisions and protect our wallets.

Remember: If you encounter drip pricing, reach out to NCH 1915 for assistance or use WhatsApp at 8800001915. Stay informed, stay savvy, and watch out for those hidden fees!

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Rishita Diwan

Content Writer

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