There’s a reason that online ticket sellers hit you with those extra fees after you’ve picked your seats and are ready to click “buy.”
Pure profit.
A massive field experiment by Berkeley Haas Prof. Steven Tadelis with the online ticket marketplace StubHub concluded that so-called “drip pricing”—whereby additional fees are only disclosed when customers are ready to confirm their purchases—resulted in people spending about 21% more. It’s a particularly effective strategy for online sales, which in the past two years has overtaken brick-and-mortar shopping.
“Websites that incorporate ‘hidden fees’ that are only revealed at checkout are making more money than they would if they chose to honestly display all fees upfront,” Tadelis said.