Drip pricing, or additional fees that consumers only learn about at the checkout, is coming under criticism from consumer groups as proposed legislation makes its way through Congress.
In the context of ticket sales at live events, the practice of drip pricing is “problematic because it can lead to significant consumer deception and frustration,” said Sally Greenberg, CEO of the National Consumers League (NCL), in an interview with PYMNTS.
According to Greenberg, drip pricing is a sales tactic in which a company only provides a portion of the product price up front and gradually reveals additional mandatory fees as the customer goes through the purchasing process.
“Customers may initially be attracted by a seemingly low ticket price,” she said, “only to later discover that various fees and costs are added, making the final cost much higher than expected. This lack of transparency can impair consumers’ ability to make informed purchasing decisions, distort price competition among ticket sellers and ultimately undermine consumer confidence in the market.”
Greenberg said the drip pricing strategy has been a concern for consumers for many years, especially since the rise of online commerce in the late 1990s and early 2000s.
“With the increased use of digital platforms to purchase tickets and other goods, this practice has become more widespread as companies have found new ways to build additional costs into the final price,” Greenberg added.
The NCL, together with a coalition of 18 other organizations, supports the bill HR 3950 – TICKET Act, which would mandate flat-rate pricing for the entire ticket industry. The bill, introduced in June 2023, passed the House of Representatives on May 15 by a vote of 388 to 24. 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, NCL and 18 other organizations spoke in favor of the bill, saying, “The end of the current Congressional session is fast approaching and now is the best opportunity to pass meaningful ticket reform that will improve the lives of millions of live event fans.”
Given the “commonsense nature of the proposal,” the letter states, “HR 3950 creates strong consumer protections without the threats to market competition that some other proposed legislation poses. It would improve the consumer experience no matter who they buy tickets from.”
The bill requires ticket sellers (including secondary market sellers) for concerts, performances, sporting events and similar activities to clearly and conspicuously disclose at the beginning of the transaction and before selecting a ticket the total ticket price for the event, as well as a detailed listing of the base ticket price and any fees (e.g., service fee, processing fee, delivery fee, facility fee, tax or other fee). The total ticket price must also be disclosed in any advertising, marketing or price list. Currently, ticket sellers generally disclose fees at the checkout.
In addition, ticket sellers who offer a ticket for sale that they do not own must clearly and prominently indicate that the ticket is not in their possession before a customer selects a ticket to purchase. The bill also requires that fans receive a full refund at a canceled event or, if the event is postponed, receive a comparable replacement ticket upon the fan’s consent.
Washington, DC Attorney General Brian Schwalb’s recent lawsuit against StubHub underscores ongoing regulatory concerns. The suit, filed on July 31, accuses the ticket resale platform of drip pricing and failing to disclose the reasons for these fees or how they are calculated, instead disclosing additional costs only gradually during the purchase process.
“Many ticket sellers, including StubHub, offer the ability to display prices including fees on the first screen of a ticket purchase process,” Greenberg added. “Unfortunately, this is not always easy to do, as this option is usually not enabled by default and is not always easy to find in the interface. For example, when a ticket buyer clicks on a specific event on StubHub, he or she must click the ‘Filter’ button, then scroll down to the ‘Price Display Options’ dropdown menu, and then toggle the ‘Include Estimated Fees’ slider to display the ticket price including fees.”
