Drip pricing, or added fees consumers only learn about at checkout, are coming under fire from consumer groups as proposed rules make their way through Congress.
In the context of live event ticketing, the practice of drip pricing is “problematic because it can lead to significant consumer deception and frustration,” Sally Greenberg, CEO of the National Consumers League (NCL), told PYMNTS in an interview.
Greenberg said drip pricing is a sales tactic in which a company advertises only part of a product’s price upfront and reveals additional mandatory fees incrementally as the customer proceeds through the purchasing process.
“Customers may initially be attracted by a seemingly low-ticket price,” she said, “only to discover various fees and charges added on at later stages, making the final cost much higher than anticipated. This lack of transparency can hinder consumers’ ability to make informed purchasing decisions, distort price competition among ticket sellers, and ultimately undermine consumer trust in the market.”
Greenberg said drip pricing has been a concern for consumers for many years, particularly since the rise of online commerce in the late 1990s and early 2000s.
“The practice has become more prevalent with the increased use of digital platforms for purchasing tickets and other goods, as companies have found new ways to layer additional costs into the final price,” Greenberg added.
The NCL, along with a coalition of 18 other organizations, are backing HR 3950 – TICKET Act, a bill that would mandate all-in pricing across the ticket industry. Introduced in June 2023, the proposed legislation passed the House of Representatives 388-24 on May 15. The U.S. Senate has since referred the bill to the Committee on Commerce, Science, and Transportation.
In a July 25 letter to the committee, the NCL and 18 other organizations advocated for the bill, stating: “With the end of the current Congressional session fast approaching, now is the best chance to pass meaningful ticketing reform that will improve the lives of millions of live event fans.”
Given the “common sense nature of the proposal,” the letter said, “HR 3950 creates strong consumer protections without the threats to marketplace competition posed by some other legislative proposals. It would improve the consumer experience no matter who they shop from when purchasing tickets.”
The bill requires ticket sellers (including sellers on the secondary market) for concerts, performances, sporting events and similar activities to clearly and prominently disclose at the beginning of the transaction and prior to the selection of a ticket, the total ticket price for the event and an itemized list of the base ticket price and each fee (e.g., service fee, processing fee, delivery fee, facility charge fee, tax, or other charge). The total ticket price must also be disclosed in any advertisement, marketing or price list. Currently, ticket sellers generally disclose fees at the checkout stage.
Additionally, ticket sellers offering to sell a ticket that the seller does not have in their possession must clearly and prominently disclose that the ticket is not in their possession before a consumer selects a ticket to purchase. The proposed legislation also provides fans a full refund for a canceled event or, if the event is postponed, a comparable replacement ticket at the fan’s approval.
Washington, D.C., Attorney General Brian Schwalb’s recent lawsuit against StubHub underscores ongoing regulatory concerns. Filed on July 31, the suit accuses the ticket resale platform of engaging in drip pricing and failing to disclose the reasons for these fees or how they are calculated, revealing additional costs only incrementally throughout the purchasing process.
“Many ticket sellers, including StubHub, offer the ability to view prices with fees included on the first screen of a ticket-buying process,” Greenberg added. “Unfortunately, this is not always easy as this option is not usually turned on by default and it’s not always easy to find in the interface. For example, on StubHub, when a ticket buyer clicks into a particular event, he or she has to click the “Filters” button, then scroll down to the “Price Display Options” drop-down, then toggle the “Include estimated fees” slider to see the ticket price with fees included.”
