'Drip pricing': The sneaky strategy airlines use to charge you more, and how to avoid it

‘Drip pricing’: The sneaky strategy airlines use to charge you more, and how to avoid it

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Buying flights on your phone is easy, convenient – and secretly costs you extra money.

The majority of consumers depend on mobile devices. According to a investigation of more than 3,000 US consumers, more than half of travel service purchases in February 2022 (51.4%) were made on a mobile device.

But beware of smart phone convenience. Sneaky “drip pricing” strategies mean you could end up pay more if you rely on your phone.

What is drip pricing?

Drip pricing is a popular online selling strategy. A company will show a little price upfront, then slowly add costs throughout the buying process.

This is particularly common with travel, where additional charges such as baggage and seat selection are up to par with the course. US airlines raised $5.3 billion in luggage fees only in 2021, according to the Bureau of Transportation Statistics.

However, a 2021 study in the journal Marketing Science found that shoppers tend to make suboptimal decisions in these drip pricing situations, that is, when hidden fees are applied throughout. throughout the payment process.

Buyers tend to compare initial prices between competitors, which are low, rather than the highest final price.

“When companies use a drip pricing strategy, the price is almost always lower than a competitor’s all-inclusive price,” says Shelle Santana, assistant professor of marketing at Bentley University and one of the study’s authors.

“But once they start adding amenities like a checked baggage, seat options, etc., this price difference between companies decreases and sometimes reverses.

Customers are exhausted by the length of the process and reluctantly accept the added fees. They assume that it will be too complicated to start over and find another option, even if it would be save them money.

“Consumers perceive high search costs associated with restarting their decision-making process, and they believe they will save less money than they actually will,” Santana says.

Why is buying travel deals on your phone a bad idea?

Buying a trip is far from simple and usually requires switching between multiple tabs and apps to find the best deal. It’s hard to do on a phone.

Consider the shared decision whether or not to purchase a flight with cash or award miles. This involves several steps.

First, you’ll need to check the airline’s app or website for reward availability, likely when switching to a personal calendar to check dates. Next, you will search for a third-party theft tool, such as Google Flights, for estimated cash fares before determining the redemption value in miles to dollars. Once you have determined the Best optionyou will then need to navigate through the payment process from cash and reward flight options to determine the true final price.

This lengthy process is virtually impossible on a mobile phone.

“I almost always travel shop on a desk,” advises Santana.

“I like to have multiple tabs open at once and switch between them to make sure I understand the price differences and factors between companies.”

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