Revealing mandatory fees late in the purchase raises completion rates relative to disclosing the true total upfront.
Now restricted under consumer law in several jurisdictions after regulators concluded the effect was reliable enough to constitute a harm. The mechanism is sunk effort: by the fee reveal, the buyer has already invested in the transaction.
In practice
- A booking site shows £59, then a service fee, then a card fee, then a seat fee, and most buyers complete anyway.
- A gym membership advertised at £19 a month collects a joining fee, an admin fee and a minimum term at the point of signature.
- Standing
- Now restricted by consumer law in several jurisdictions.
- Further reading
- Wikipedia
- Subject
- Economics & Incentives
- Essay
- The regularities money obeys