Prevalence of Drip Pricing and Its Impact on Business of Physical Merchants
Ministry of Trade and IndustrySpeakers
Summary
This question concerns whether drip pricing practices are disadvantaging physical merchants relative to online ones, as raised by Mr Saktiandi Supaat. Minister for Trade and Industry Gan Kim Yong noted that feedback on such incidents is limited and occurs across both online and physical retail sectors. He emphasized that under the Consumer Protection (Fair Trading) Act, all suppliers must include unavoidable fees in headline prices or disclose them clearly. Consumers can approach the Consumers Association of Singapore for assistance, with egregious cases being referred to the Competition and Consumer Commission of Singapore. Furthermore, the CCCS Price Transparency Guidelines (2020) provide businesses with clarity on pricing practices that could potentially infringe upon existing consumer protection laws.
Transcript
56 Mr Saktiandi Supaat asked the Minister for Trade and Industry whether the Competition and Consumer Commission of Singapore has received complaints or feedback that drip pricing, where the advertised price does not contain additional fees to be added in a sale/purchase, is eroding the business of physical merchants in favour of online ones.
Mr Gan Kim Yong: Drip pricing refers to the practice of advertising a product or service at a lower headline price and subsequently disclosing (dripping) additional mandatory or optional fees along with the transaction or payment process, resulting in a higher final price. While the Competition and Consumer Commission of Singapore (CCCS) and the Consumers Association of Singapore (CASE) have received some feedback on drip pricing practices, the number of incidents is small. These occurred in both online and physical store retailers.
Under the Consumer Protection (Fair Trading) Act (CPFTA), all suppliers, whether operating online or in physical stores, must ensure that unavoidable fees and charges are included in the total headline price, or disclosed to the consumer clearly and prominently together with the headline price. Consumers who encounter instances of drip pricing can approach CASE for assistance. In egregious cases, CASE will refer errant businesses to CCCS for investigation under CPFTA, regardless of whether they are online or physical stores. To help businesses, CCCS published the Price Transparency Guidelines in 2020 which give greater clarity on pricing practices that could potentially infringe CPFTA.