Who's Dripping?

You’re in your weekly department head meeting and the CEO tasks you to prepare for the upcoming budget season by increasing revenue through drip pricing. You silently think to yourself that you’ll have to Google it because you’ve never heard of it. When you do research on it, you will discover that the Federal Trade Commission just held a one-day workshop on The Economics of Drip Pricing. So what is it? It’s a pricing technique which companies use to advertise only a part of a product’s price and slowly reveal hidden fees like peeling away the layers of an onion. You’re more familiar with it than you think. The Las Vegas hotel you booked for your convention last year advertised how much the room would cost per night. You knew that it would have to include taxes and fees associated with that room. But it was a surprise that you had to pay an additional twenty dollars a night for what they called “resort fees” to use the facilities, although you had no say in opting out of that charge and knowing you had no free time to lounge by the pool or use the fitness center.