Drip pricing ban: new rules now in force

Since the 6th April 2025, new pricing information rules and an express ban on drip pricing apply to consumer contracts, introduced as part of the consumer law reform implemented by the Digital Markets, Competition and Consumers Act 2024 (DMCC). The new rules are intended to promote transparency and support competition and form part of suite of measures under the DMCC designed to tackle unfair commercial practices, which also include a ban on fake reviews and new rules for subscription contracts. 

What is drip pricing?

Drip pricing occurs when a trader advertises a product at a headline price but introduces (or ‘drips’) additional mandatory charges as a customer proceeds towards purchase, leading to a higher final price. The practice is particularly common in the transport, leisure, hospitality, entertainment and communication sectors; typical charges include admin fees, processing fees, booking fees and delivery charges. A report from the Department for Business and Trade estimated that these unavoidable fees cost consumers as much as £2.2 billion a year, with significant impact for consumers and for competing businesses who lose sales due to comparisons of a misleading headline price.

What do the new rules mean?

Under the new rules, businesses are required to set out in every ‘invitation to treat’ the total, all-inclusive, price of a product inclusive of fees, taxes and charges that the customer will ultimately incur if they purchase. The rules apply to goods, service and digital content whether the consumer is transacting online, in-store or by another channel. For these purposes:

• Invitation to treat: catches any communication about the characteristics of the product which might inform a transactional decision. Examples include pricing displays, website content, marketing materials, advertising, and packaging.
• Total price: includes all mandatory fees but excludes any charges that are truly optional. Optional charges relate to extras such as service upgrades (e.g. priority boarding) or product add-ons (e.g. gift wrapping or extended warranties).
• Mandatory fees: means sums that are unavoidable to purchase, receive or use the product. Ticket booking fees and cleaning charges on short term rentals are common examples. 

An exception applies where the nature of the product means the total price cannot reasonably be calculated in advance. In this case, the business must indicate as prominently as the headline price how the final total price will be calculated. Similarly, where delivery costs cannot be calculated in advance, the invitation to treat must indicate that they may be payable. Significantly, there is no exception for space limitations. Businesses will be expected to take steps to overcome limitations of short form media, for example by use of hyperlinks or QR codes.

Breach and enforcement

In assessing a breach, the Competition and Markets Authority (CMA) has latitude to consider the presentation of information and impact of consumer choice architecture (e.g. online user interface). Any breach carries the potential for sanctions including compliance directions (e.g. mandating compensation to customers) and/or fines up to the higher of £300,000 or 10% of the trader’s global turnover. While the CMA’s new powers permit it to bring enforcement through administrative proceedings (i.e. without going through the courts). It has indicated that its initial focus will be supporting businesses to achieve compliance with the new rules, rather than punitive enforcement.

Practical steps to compliance 

The rules apply to all consumer businesses, regardless of sector, and are particularly relevant to those trading online. Initial steps to compliance will include:

• Evaluate pricing models: to identify what falls within headline price and what charges are optional.
• Review pricing information: on your website(s) and in adverts, marketing materials and packaging for clarity.
• Audit choice architecture: to ensure that checkout processes and customer interfaces support timely presentation, including for price elements which cannot be calculated in advance.

What to expect in the coming months?

The CMA has issued draft guidance (CMA207) to help businesses understand the new pricing laws and consumer trading rules. Further consultation is expected over the summer – likely to consider delivery fees in particular – with final guidance expected in the Autumn. The Advertising Standards Authority is also updating its codes of practice to reflect the new laws.

Do you need legal advice?

If you have any questions on the new rules on drip pricing, fake reviews, subscription or how other aspects of the DMCC may impact your business, please get in touch with our Commercial and Technology lawyers at [email protected].