Add-on fees are driving consumers crazy. From restaurants and hotels to concerts and food delivery, we are increasingly shown a low price online, only to click through and find a range of fees that yield a much higher price at checkout.

The term drip pricing was popularized by a 2012 Federal Trade Commission conference. Its spread is associated with the proliferation of airline fees after the Sept. 11, 2001, terrorist attacks. Yet an example of the phenomenon that long predates 2001 is stores’ practice of listing goods without the sales tax, which gets added at checkout.

Why not include the sales tax with the sticker price? One study from 2019 showed consumers punish that sort of transparency. A grocery store let the authors tag some products with the familiar pretax price and some with the total price including tax. For example, a hair brush’s price tag showed $5.79 before tax, and beneath that $6.22 with the tax. Sales volume dropped for products with price tags that included the tax than a control group without the tax.

This isn’t because shoppers didn’t know the tax rate or which items were taxable. In fact, 75% of shoppers surveyed knew the sales tax within 0.5 percentage point, and most knew what goods were taxable. So, the tax-inclusive price tag didn’t give them new information; it was just that transparent reminders turned some people off.

Possible Preaching Angle:

Jesus never practiced “drip pricing.” He never hid the total costs for following him. It may turn some people off, but he always put the full cost upfront.