Type | Description | Typical Offenders |
Drip pricing | Consumers only see an element of the price upfront and end up paying much more due to optional or compulsory extras | Airlines, car hire firms and insurance companies |
Time-limited offers | For example, sales that finish at the end of the month or last for one day only. | Carpet stores and furniture sellers |
Baiting sales | A company advertises discounts to attract visitors whilst having few items at that price on sale | |
Reference prices | Artificially inflating the pre-sale price of an item in order to make the discount look more attractive. | Companies offering cruises or selling furniture. Supermarkets |
Complex pricing | It is difficult for a consumer to assess an individual price, such as with three-for-two offers and 'free' add-ons. | Mobile phone companies, supermarkets and computer stores |
Surge pricing | Prices increase dramatically in response to peak demand | Uber |
Customized pricing | Prices are individually tailored using information collected about a consumer's internet use | |
Price comparison websites | There may be some hidden financial ties or other collusion between an apparently independent comparison site and the suppliers whose prices they are comparing |
I have talked about some of these pricing schemes and scams before, in particular complexity-based pricing. I've also talked about ways (such as the infamous Ghetto Latte) whereby consumers can get a better deal than the service provider intended. All this kind of thing results in chronic distrust between service provider and service user, and excessive transaction costs. Might seem like a classic argument for regulatory intervention, if we could really believe that would make the situation fairer. What do you think?
Update: Surge Pricing added 25 September 2017
NYE Surge Pricing Explained (Uber Website December 2011, via Web Archive)
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