E-Commerce: Why the Price You See Is Not What You Pay

Online platforms are increasingly using convenience fees, platform charges and other add-on costs, making the final price higher than the initially displayed price.

What Are Convenience Charges?

• These are additional fees imposed over and above the basic price of a product or service.
• They are common across food delivery, e-commerce, entertainment, travel and ticket-booking platforms.
• Companies justify such charges as covering costs related to technology, staff, payment systems and infrastructure.
• However, such fees can significantly increase the final bill and may not always be disclosed upfront.

Examples of Additional Charges

• IRCTC charges convenience fees on online railway-ticket bookings.
• Food-delivery platforms may impose platform or handling charges.
• Movie-ticketing and travel-booking websites often levy convenience or internet-handling fees.
• Airlines and online travel aggregators may add multiple service-related charges during checkout.

What Are Dark Patterns?

• Dark patterns are deceptive user-interface designs that manipulate consumers into making choices they may not otherwise make.
• India’s Guidelines for Prevention and Regulation of Dark Patterns, 2023 seek to regulate such practices.

What is Drip Pricing?

• In drip pricing, the consumer first sees a low headline price, while additional mandatory fees are revealed gradually.
• The final amount may therefore be substantially higher than the advertised price.
• The practice reduces transparency and makes comparison between platforms difficult.

Consumer Protection Concerns

• The Central Consumer Protection Authority (CCPA) has acted against platforms for unfair or deceptive pricing practices.
• In one case, it penalised a quick-commerce firm for displaying a lower price initially and adding handling charges and membership fees later.
• The CCPA treats practices such as basket sneaking and drip pricing as potential dark patterns.

Why Platforms Use Such Charges

• Add-on fees have become an important revenue source for digital platforms.
• As online transactions increasingly become the default mode of accessing services, consumers often have limited ability to avoid such fees.
• Small per-transaction charges can generate large cumulative revenues for companies.

Key Concern

• The central issue is not merely whether platforms can charge additional fees, but whether the full payable amount is disclosed clearly and upfront.
• Transparent pricing is essential to protect consumers from misleading or manipulative digital practices.

E-commerce pricing is increasingly shaped by add-on charges and dark patterns, making upfront price transparency a major consumer-protection issue.