Showing prices online: all-in pricing and the drip pricing rules

What you will be able to do

• Explain the drip pricing rule in the Competition Act and the HST exception
• Identify mandatory fees in your own pricing that must be folded into advertised prices
• Rewrite an advertised price so it is all-in, clear and attainable

Event pricing has a long tradition of the little extra: the facility fee, the admin charge, the mandatory service percentage that appears on the final invoice. Clients have always disliked it. Since 2022, Canadian law has treated it as a misleading price. If you show a price online, it must be a price the client can actually pay, with only taxes added on top.

Read the transcript

Showing prices online: all-in pricing and the drip pricing rules.

Event pricing has a long tradition of the little extra: the facility fee, the admin charge, the mandatory service percentage that appears on the final invoice.

Clients have always disliked it.

What drip pricing is.

Drip pricing means advertising one price and then adding fixed, mandatory charges later in the buying process, so the client cannot actually buy at the price they first saw.

The extra amounts drip in: on the quote, at checkout, on the contract, or on the final invoice.

Where drip pricing hides in event businesses.

Few event vendors set out to mislead.

Drip pricing usually arrives through habit, or because a fee was added years ago to cover a real cost and never moved into the headline price.

Worked example: rewriting a venue listing.

A small event space in the Junction, an example rather than a real business, advertises "Saturday evening rental from 3,000 dollars".

Every booking also carries a 15 percent facility fee and a 250 dollars cleaning fee.

Caterers and per-person prices.

Per-person pricing is where drip pricing most often slips in.

A menu advertised at 85 dollars a person, with a mandatory 18 percent service charge, actually costs 100.30 dollars a person before tax.

Making extras genuinely optional.

You do not have to put everything into one large number.

Add-ons are fine when the client can truly say no and still receive the service you advertised.

That is the lesson. The worksheet and the quiz are just below this video.

What drip pricing is

Drip pricing means advertising one price and then adding fixed, mandatory charges later in the buying process, so the client cannot actually buy at the price they first saw. The extra amounts drip in: on the quote, at checkout, on the contract, or on the final invoice.

The Competition Act now says directly that making “a representation of a price that is not attainable due to fixed obligatory charges or fees” is a false or misleading representation. There is one exception: charges imposed by an Act of Parliament or a provincial legislature, such as sales tax. In Ontario that means you may show a price and add 13 percent HST on top. You may not add anything else that the client cannot avoid.

The Competition Bureau’s guidance puts it plainly: consumers should see the true total cost upfront, without scrolling or reading fine print. It also notes that variable charges can raise concerns, so a mandatory fee that changes in size is not a safe way around the rule.

Where drip pricing hides in event businesses

Few event vendors set out to mislead. Drip pricing usually arrives through habit, or because a fee was added years ago to cover a real cost and never moved into the headline price. Check your own pricing against this table.

The test is simple. Could a client actually buy the thing you advertised for the price you advertised, plus tax? If not, the price is not attainable.

Worked example: rewriting a venue listing

A small event space in the Junction, an example rather than a real business, advertises “Saturday evening rental from $3,000”. Every booking also carries a 15 percent facility fee and a $250 cleaning fee. Here is what a Saturday client actually pays before tax:

• Room rental: $3,000
• Facility fee: 15 percent of $3,000 = $450
• Cleaning fee: $250
• All-in price before tax: $3,700
• HST at 13 percent: $481
• Total: $4,181

The compliant listing reads “Saturday evening rental from $3,700 plus HST”. The venue could also show the HST-inclusive total, which many consumers prefer, as long as it says the total includes HST.

Is $3,700 a worse marketing message than $3,000? Only if competitors keep dripping. Clients who have been burned by surprise fees often respond well to a line such as “All mandatory fees included. The only thing we add is HST.” Transparency becomes part of the position.

Caterers and per-person prices

Per-person pricing is where drip pricing most often slips in. A menu advertised at $85 a person, with a mandatory 18 percent service charge, actually costs $100.30 a person before tax. Advertise $100.30, or round the menu price so the all-in figure is clean, for example $85 with service included becoming $99 all-in. Optional upgrades, such as a late-night station, can still be listed separately.

Be careful with words. Calling a mandatory charge a “gratuity” does not make it optional. If every client pays it, it belongs in the price.

Making extras genuinely optional

You do not have to put everything into one large number. Add-ons are fine when the client can truly say no and still receive the service you advertised. The difference between an optional extra and a dripped fee is whether the base offer works without it.

• Optional: a second photographer, an extra hour of DJ time, a late-night food station, chair covers, a custom monogram on the dance floor. The event happens perfectly well without any of them.
• Not optional: a staffing charge the caterer cannot serve without, a power hook-up fee a venue applies to every booking, or a delivery fee on rentals that cannot be collected.

Where a charge depends on circumstances, such as travel beyond your area or overtime past a set finish, state the rule next to the price so the client can see in advance whether it applies: “Includes travel anywhere in the City of Toronto. Travel to Durham, Halton or beyond is $1.20 per kilometre from our studio, quoted before you book.” That is clear, predictable and easy to defend.

Finally, watch “starting from” prices. A starting price is fine when a real client can book it. If the entry price applies only to a Tuesday in February for ten guests, say so beside it, or use a price more clients will actually see.

An all-in pricing audit you can copy

1. List every place a price appears: your website, PDFs, listing platforms, social posts and ads, Google Business Profile, email templates and the price you say on the phone.
2. For each price, list every charge a typical client pays on top before tax.
3. Mark each charge as mandatory, optional or imposed by law.
4. Add every mandatory charge into the advertised price.
5. Rewrite each price with “plus HST” or “HST included”.
6. Check that any “from” or “starting at” price is one a real client can book.
7. Update the invoice and contract templates so they match the advertised figure exactly.
8. Put a date in your calendar to repeat the audit whenever you change prices.

The rules in Canada and Ontario

The Competition Act. The 2022 amendments became law on June 23, 2022. They made drip pricing an explicit false or misleading representation under both the civil provisions (section 74.01(1.1)) and the criminal provisions (section 52(1.3)). The only charges that may be left out of an advertised price are amounts imposed by an Act of Parliament or a provincial legislature, such as HST. The Competition Bureau’s page on drip pricing explains what it expects in practice, and you can read the wording itself in section 74.01 of the Act.

The penalties are serious. Under the civil provisions, an administrative monetary penalty for a corporation can be the greater of $10,000,000 ($15,000,000 for a subsequent order) or three times the value of the benefit derived, and if that benefit cannot reasonably be determined, 3 percent of the corporation’s annual worldwide gross revenues. For an individual it is the greater of $750,000 ($1,000,000 for a subsequent order) or three times the benefit. Those are maximums, not typical amounts, but they show how seriously Parliament treats misleading prices. Making a false or misleading representation knowingly or recklessly is also a criminal offence.

Ordinary selling price claims. If you show a “was” price or a percentage off, the reference price must be genuine. The Competition Bureau’s tests are that more than 50 percent of sales were at that price or higher within a reasonable period, usually within a year, or that you offered it in good faith at that price for a substantial period, usually within a year, immediately before or after the promotion. Keep records of your promotion dates and regular prices.

Ontario consumer protection. Under the Consumer Protection Act, 2002, which remains in effect until the 2023 Act is proclaimed, it is an unfair practice to make a false, misleading or deceptive representation. A consumer who entered an agreement because of an unfair practice has one year to withdraw from it. A surprise fee is not only a marketing problem; it can unwind the booking.

Ad Standards. Clause 1 of the Canadian Code of Advertising Standards says truthfulness is judged by the general impression an ad conveys, and that disclaimers and asterisked or footnoted information must not contradict more prominent parts of the message. Clause 3 deals specifically with price claims. A large “$3,000” with a small asterisk leading to “plus mandatory fees” fails both the Code and the Act.

How to show HST

Ontario’s HST rate is 13 percent. The CRA lets registrants show tax in one of three ways: state that the total includes GST/HST, show the HST amount separately, or show the rate. Where HST applies, show the combined 13 percent, not separate federal and provincial parts. For consumer-facing pages, many vendors find “plus HST” beside every price is the clearest choice. Small suppliers who are not registered do not charge HST and should not show it.

GTA practice notes

Listing platforms, social posts and paid ads are all advertising. A “from $1,200” figure on a wedding platform must be all-in just like the price on your own site. When you update prices, update the platforms the same day. Check Instagram and Facebook posts that show prices too: an old post pinned to the top of your profile is still advertising, so edit it or remove it. Phone and in-person quotes are also representations, so give staff the same all-in figures you publish. For corporate quotes, show each line clearly, but keep the advertised figure attainable. This is general information, not legal advice; for a pricing model with many moving parts, speak with a lawyer who practises competition or consumer law.

Worksheet

Download the worksheet and complete it for your own business, using Lantern & Lane as the model where it helps. Keep it with your marketing plan. It takes about 10 minutes.

Download the worksheet (PDF)