The Competition and Markets Authority (CMA) has published a warning to online retailers to ensure they make their prices – including delivery fees – clear to customers up front, as the Christmas shopping period nears, encouraging any businesses which has not already done so to review their website, mobile app and online advertising to ensure their pricing is clear and complies with the law.
"Clear pricing that includes all the fees that people can’t avoid helps people compare offers confidently and choose the option that works best for them," states the CMA. "Unexpected charges make it more difficult for consumers to understand and compare the true cost of products, including between different retailers. The first price consumers see should be the price they pay."
When it comes to delivery fees, it says the total price, including the minimum mandatory delivery charge, must be shown to the customer throughout the sales process.
"We recognise that many businesses across the UK have taken steps since the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) came into force to ensure that they comply with the DMCC Act’s price transparency requirements," the CMA continues. "We welcome those changes. Increasing price transparency benefits consumers across the UK.
"We are concerned, however, that some businesses remain non-compliant in how they present delivery charges to consumers. Where we see ongoing non-compliance, we may use our enforcement powers to ensure that customers benefit from the price transparency that is required by law."
The CMA says that the DMCC Act requires that if the price of a product is being provided to a consumer (an ‘invitation to purchase’) that price must be the total price, including mandatory delivery or collection fees. The total price must also include any other unavoidable fees, taxes and charges. The total price must be provided at every stage of the purchase process where a price is given, including advertising, product pages, carts and baskets, checkout and payment pages.
The CMA has published guidance for business on compliance with the DMCC Act’s price transparency – chapter 4 of the guidance explains the core requirements of the DMCC Act, and paragraphs 5.2 to 5.21 provide additional guidance on the presentation of delivery fees. It says that online retailers, marketplaces, comparison sites and search engines should review their pricing practices against the DMCC Act’s requirements and the CMA’s price transparency guidance.
Examples of non-compliant practices include: displaying a product price without including a mandatory delivery charge in the total price; failing to include applicable mandatory delivery charges within basket totals or order summaries; failing to provide information about optional delivery fees or placing that information behind links, separate pages, pop-out pages, expandable sections or drop-down menus; and failing to provide information about delivery charges until late in the checkout stage.
The CMA has already enforced the rules on drip pricing against four businesses (see related), imposing fines totalling more than £5.1m and securing more than £1.35m in refunds for affected consumers.
