British government tough on hidden costs
Business Minister Kevin Hollinrake has said that the move is to ensure that the customers have “the clearest and most accurate information upfront” before they purchase a product or a service. Talking to BBC News, he said, “We’ll be listening to industry to ensure these new regulations work for businesses too and don’t generate unnecessary burdens, while at the same time providing a crucial safety net for consumers and their cash.”
Public Consultation by Department of Business
The Department of Business and Trade has said, “We are consulting on proposals on five key areas of consumer information transparency, with the aim of improving the quality and accessibility of information so that consumers can make informed choices about the products they purchase, whether it is their weekly shopping or booking a hotel room online. The five areas we are consulting on are the display of pricing information; hidden fees and drip pricing; fake and misleading reviews; online platforms and online interface orders.”
Hidden costs worth GBP 1.6 billion!
The government in its research has found that the practice of charging hidden costs is widespread and it costs customers about GBP 1.6 billion annually. The airlines also indulge in drip pricing, which means that the customers have to pay much more than advertised because of extra but necessary fees from ticket pricing to food. From speedy boarding to check-in to cabin bags to seat selection, customers have to pay extra. About three-quarters of transport providers including airlines and railways include hidden fees in their products.
Airlines UK Replies
But the airlines have argued that by ‘unbundling ’ extras like food and drink or cabin baggage from the ticket price, they give travelers more choice and cheaper fares overall.
But this practice is not limited to transport providers, 54% of providers in the entertainment industry and 56% of hospitality firms use hidden costs to earn more.
Q1. How much do customers across Britain pay annually as hidden costs?
A1. Customers in Britain pay about GBP 1.6 billion as hidden costs. Besides three-quarters of transport providers including airlines and railways, 54% of providers in the entertainment industry and 56% of hospitality firms use hidden costs.
Q2. What is drip pricing in airlines?
A2. Drip pricing in the aviation sector means the customers have to pay much more than the advertised price because of extra but necessary fees from ticket pricing to food. From speedy boarding to check-in to cabin bags to food, you have to pay extra.
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