The Federal Trade Commission will host a workshop on May 21 on drip pricing, a pricing technique in which firms advertise only part of a product's price up-front, and then reveal additional charges later as the consumer goes through the buying process. The added charges can be mandatory, such as surcharges and taxes, or optional fees for upgrades or add-ons. Drip pricing is used by many types of firms, including airlines, automobile dealers, financial institutions, Internet sellers, and rental car companies.
The day-long workshop, which is free and open to the public, will bring together economists and marketing academics to explore drip pricing theories, empirical studies, and policy issues raised by drip pricing.
Questions to be addressed include:
- Why do firms use drip pricing?
- How does drip pricing affect the way consumers search for products and services?
- Where is drip pricing used?
- When is drip pricing harmful to consumers?
- Is drip pricing efficient in some situations?
- Can competition prevent firms from harming consumers through drip pricing?
- Can consumer experience or firm reputation limit harm from drip pricing?
- What types of policies could lead to improved consumer decision-making and under what circumstances should such policies be applied?
The workshop will be held at the FTC's Conference Center at 601 New Jersey Avenue, N.W., Washington, DC. A government-issued photo ID is required for entry. Pre-registration for this workshop is not necessary, but is encouraged so that we may better plan for the event.
The Conference Center is accessible to people with disabilities. If you need an accommodation related to a disability, please contact Samantha Konstandt at email@example.com, or 202-326-3348. Requests should include a detailed description of the accommodations needed and a way to contact you if we need more information. Please provide advance notice.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
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