Guess what? Shoppers love to spend. What they hate is feeling like they’ve been played.
For example: imagine you go to a restaurant. You see the prices listed on the menu, good. You order your food. Great.
… But when you get the bill, it’s 10–20% more expensive than you expected because of “hidden fees.”
You ask why, and the server says you’re paying for cutlery, mandatory tip, service fee, etc. on top of your bill. And you’re finding out only after you have already finished eating.
Yep, that’s a real tactic called drip pricing, and Michael Bateman has written all about it.
And yes, it’s a super effective way to extract more money because of the purchasing psychology behind it: once a shopper makes a buying decision, they don’t usually look back.
Shoppers tend to focus on the initial price. By the time they get to the final “drip” price, they’ve already committed and they go “ah, well” as they checkout.
Take Airbnb, for example. You find an apartment for $50 a night, but when you finally reach the checkout, you see a service fee, cleaning fee, country tax… and the price doubles.
This trend is starting to appear in various industries, from hospitality to airlines.
And as this trend becomes more common, more businesses will follow suit because they’ll feel themselves at a disadvantage if all their competitors are doing it.
So why is this dangerous?
Because even if it can make you more money in the short run, it makes your customers feel cheated out and upset. And you lose credibility long term.
In a world where even legit businesses adopt “scammy” models, you should think twice.
OK, so… what’s the solution?
If you can avoid it – do it. It could help you retain tons of customers.
But if you can’t, at least be honest about it. Don’t hide your fee away until the final checkout point. Instead, be open about it before shoppers commit.
That’s how you’ll retain both your customers and your reputation.