Reference Prices and Drip Pricing: How to Test a Price Display Without Making a Deceptive Claim

Answer first: Pricing research and price-display law answer different questions, and most teams only run the first. Van Westendorp and Gabor-Granger tell you what a customer will pay for your product. Neither tells you whether your strikethrough reference price, your checkout fees, or your limited-time banner is lawful, because those are questions about what the display conveys rather than about what the product is worth. Since 2025 both the UK and the US have hard rules requiring a total price, and the evidence regulators ask for is comprehension evidence: proof that real consumers, shown your actual display, correctly predicted what they would be charged. The metric that produces is total-price estimation error, and almost nobody measures it.

The four families of price claim

Price displays make more claims than teams realise. Each family has a different legal test and a different research design.

What changed in 2025

United Kingdom. The unfair commercial practices provisions of the Digital Markets, Competition and Consumers Act 2024 came into force on 6 April 2025. Section 230 governs invitations to purchase, defined as a commercial practice providing information indicating the characteristics of a product and its price which enables, or purports to enable, a consumer to decide whether to purchase.

Where a practice is an invitation to purchase, omitting the total price of the product is omitting material information. Section 230(4) defines that term without wiggle room: the total price of a product includes any fees, taxes, charges or other payments that the consumer will necessarily incur if the consumer purchases the product. Where part of the price genuinely cannot be calculated in advance, section 230(5) requires you to explain how it will be calculated, and to set that explanation out with as much prominence as the price itself.

Section 230(9) closes the presentational escape route: references to omitting information include providing information in a way that is unclear or untimely, or in such a way that the consumer is unlikely to see it. A mandatory fee disclosed in grey eight-point type below the fold is omitted, as a matter of law.

Sitting above this, section 226 defines misleading actions to include an overall presentation which is likely to deceive the average consumer, and section 226(3) states that an overall presentation may be deceiving even if the information it contains is true. Schedule 20 then bans outright, in all circumstances: falsely stating that a product will only be available for a limited time in order to elicit an immediate decision and deprive consumers of sufficient opportunity to make an informed choice; and describing a product as gratis, free, without charge or similar if the consumer has to pay anything other than the unavoidable cost of responding and collecting or paying for delivery.

United States. The FTC Rule on Unfair or Deceptive Fees is codified at 16 CFR Part 464, published at 90 FR 2166 on 10 January 2025. Section 464.2(a) makes it an unfair and deceptive practice to offer, display or advertise any price of a covered good or service without clearly and conspicuously disclosing the total price. Section 464.2(b) goes further than the UK rule on prominence: the business must disclose the total price more prominently than any other pricing information, except that where the final amount of payment is displayed it must be as prominent or more prominent than the total price.

Total price is defined as the maximum total of all fees or charges a consumer must pay, including any mandatory ancillary good or service, excluding only government charges, shipping charges, and optional ancillary items. Section 464.2(c) requires disclosure, before the consumer consents to pay, of the nature, purpose and amount of any excluded fee and the identity of what it is for, plus the final amount of payment. Section 464.3 separately prohibits misrepresenting the nature, purpose, amount or refundability of any fee.

The scope limit most summaries get wrong. Part 464 applies only to a covered good or service, defined in section 464.1 as live-event tickets, or short-term lodging including hotels, motels, inns, short-term rentals and vacation rentals. It does not cover software, subscriptions, retail goods or professional services. Those remain subject to the FTC Act's general deception prohibition and to state law, and several states have enacted broader pricing-disclosure statutes. If you sell SaaS, read Part 464 as the clearest published specification of what a regulator considers adequate, not as a rule you are exempt from worrying about.

Clear and conspicuous is a testable specification

The most useful thing in Part 464 for a research team is not a prohibition, it is a definition. Section 464.1 defines clear and conspicuous with eight enumerated requirements, and every one of them is empirically testable:

• Easily noticeable, meaning difficult to miss, and easily understandable by ordinary consumers
• Visual disclosures must stand out from accompanying text by size, contrast, location and duration so they are easily noticed, read and understood
• Audible disclosures must be delivered at a volume, speed and cadence sufficient to be easily heard and understood
• In interactive electronic media such as the internet, a mobile application or software, the disclosure must be unavoidable
• Diction and syntax understandable to ordinary consumers, in each language the underlying representation appears in
• Compliant in every medium through which it is received, including all electronic devices
• Not contradicted or mitigated by, or inconsistent with, anything else in the communication
• Where the representation targets a specific audience such as children or older adults, ordinary consumers includes members of that group

Read those as a research brief. Unavoidable is a behavioural claim you can falsify by watching whether people reach checkout without having read it. Not contradicted or mitigated is a net-impression claim you test by showing the whole page rather than the disclosure alone. And the final bullet makes your sampling frame a compliance variable, exactly as the FTC Green Guides do for environmental claims.

The three questions a pricing study can answer, and the one it cannot

Willingness to pay. What will this customer pay for this product? Mature methods exist: van Westendorp for acceptable price ranges, Gabor-Granger for revenue-maximising points, conjoint for trade-offs. Well covered, widely run.

Comprehension. Shown this display, does the customer correctly predict what they will be charged? Methods exist and are simple. Almost never run.

Materiality. Does the way the price is presented change the decision? Straightforward to test with a control cell. Rarely run.

Lawfulness. Is this display legal? Not an empirical question, and no study answers it. But comprehension and materiality evidence is what your lawyer needs in order to answer it, and what a regulator asks for when they challenge you.

The asymmetry is the point. Teams spend heavily on the first question, which affects revenue, and nothing on the second and third, which affect liability, even though the second and third are cheaper to run.

Designing a price comprehension study

Step 1: Use the real asset. Screenshot or prototype of the actual pricing page, listing, or checkout step, at the real screen size. Both the UK and US tests are about overall presentation, so a claim tested in isolation tests the wrong thing. Run a mobile variant separately; disclosures that clear the bar on a 27-inch monitor routinely fail below the fold on a phone.

Step 2: The headline question, asked unaided. Show the display for a realistic dwell time, then ask, before anything else: If you bought this right now, what is the total amount that would leave your account? Take a number. This is the whole study in one question.

Step 3: Compute total-price estimation error. Subtract the stated number from the true final charge. Report the mean signed error, the mean absolute error, and, most usefully, the proportion of participants whose estimate was within one percent of the true total. That proportion is your comprehension rate, and it is the number to put in front of counsel and in front of the design team, because both understand it immediately.

Step 4: Unaided fee recall. Ask what fees or charges apply on top of the headline price, without listing any. Then ask what each one is for. Section 464.2(c) requires disclosure of the nature and purpose of an excluded fee, and section 464.3 prohibits misrepresenting it, so whether people can say what a fee is for is directly on point.

Step 5: Reference price interrogation. Where a was-now price appears, ask unaided what the struck-through figure means. You are looking for whether people read it as a price genuinely charged recently, by you, to ordinary customers. If they do and it was not, you have a problem no disclaimer fixes.

Step 6: Urgency verification. For any countdown, low-stock or ends-tonight element, ask what the participant believes happens after the deadline. Then check that belief against what actually happens. Schedule 20 makes a false limited-time statement unlawful in all circumstances, so the gap between belief and reality is the finding.

Step 7: Control cell for materiality. One cell sees the display as designed, one sees the same offer with the total price stated up front. Compare purchase intent and stated fairness. A large gap tells you the presentation, not the price, is doing the work, which is exactly the pattern regulators treat as a transactional-decision effect.

Step 8: Aided pass, last. Only after all unaided measurement, point at the disclosure and ask whether it was noticed and whether it is understandable. Running this first destroys the study.

Mapping to structured questions

Koji supports all six of these types, and the sequence above depends on the one thing a form cannot do. When a participant says the total would be about forty dollars, somebody has to ask what makes you say that, and were you expecting anything else to be added? That follow-up is where you learn whether they missed the fee, saw it and discounted it, or assumed it was optional. Koji's AI interviewer generates those probes itself, in voice or text, across every participant at once, then produces the analysis without anyone reading two hundred transcripts. A conventional survey tool captures the forty-dollar answer and stops precisely where the evidence starts.

The practical consequence is speed. A comprehension study on a new checkout variant can field and report inside a day, which makes it viable to run on every pricing change rather than once a year. That cadence is what turns compliance evidence from a project into a routine, in the same way our pricing page research playbook treats testing as continuous rather than episodic.

Reporting it properly

A price-display report should sit alongside the willingness-to-pay work, not replace it, and should state: the exact asset and version tested, with screenshots; device and screen size; the true final charge used to score accuracy; comprehension rate at the one percent threshold; mean absolute estimation error; unaided fee recall rate per fee; the reference-price reading distribution; the control-cell materiality difference; and the date relative to the display going live. Keep the stimulus files. A year later the page will have changed and the screenshot is the only proof of what you tested.

Frequently asked questions

What is drip pricing and is it illegal now?

Drip pricing is revealing mandatory fees progressively through checkout rather than in the headline price. In the UK it is effectively prohibited for invitations to purchase: since 6 April 2025, section 230 of the Digital Markets, Competition and Consumers Act 2024 requires the total price, and defines it to include any fees, taxes, charges or other payments the consumer will necessarily incur. In the US the FTC Rule on Unfair or Deceptive Fees imposes a comparable total-price requirement but reaches only live-event tickets and short-term lodging.

Does the FTC junk fees rule apply to my SaaS pricing page?

No. 16 CFR Part 464 defines a covered good or service as live-event tickets or short-term lodging, including hotels, motels, inns and short-term or vacation rentals. Software, retail, subscriptions and services fall outside it. They remain subject to the FTC Act's general prohibition on deceptive practices and to state law, and several states have enacted broader pricing-disclosure statutes. Treat Part 464 as the clearest published specification of adequate practice rather than as the boundary of your obligations.

Can a price claim be deceptive if every number in it is true?

Yes, and UK law says so explicitly. Section 226(3) of the Digital Markets, Competition and Consumers Act 2024 states that an overall presentation may be deceiving even if the information it contains is true. The US test is the same in substance, judging deception on the net impression of the whole presentation. A strikethrough price that was genuinely charged for two days out of a year is a true number producing a false impression, which is why reference-price cases turn on how long and how widely the higher price was actually offered.

What is total-price estimation error?

It is the gap between what a consumer predicts they will pay after seeing a price display and what is actually charged, expressed in currency or as a percentage of the true total. Report it as mean absolute error plus the proportion of participants within one percent of the correct figure. It is the most useful output of a price-display study because it converts a legal question about clarity into a number you can compare across design variants and track over time.

How is this different from van Westendorp or Gabor-Granger?

Those methods estimate what a customer is willing to pay, treating the price as a clean number. A comprehension study takes your actual display and measures whether people understand what they will be charged. You can have an optimally priced product presented in a misleading way, and a perfectly lawful display at the wrong price. They are complementary, but only the comprehension study produces the evidence a regulator asks for.

How do I test whether a disclosure is clear and conspicuous?

Treat the regulatory definition as a specification. 16 CFR 464.1 requires a disclosure to be easily noticeable and easily understandable by ordinary consumers, unavoidable in interactive media, not contradicted or mitigated by anything else in the communication, and understandable to members of any specific audience the practice targets. Test each by showing the real display, asking unaided what the total will be and what fees apply, and only pointing at the disclosure afterwards. If unaided comprehension is low, the disclosure is not conspicuous however large the font.

Related Resources

• Pricing Page Research covers the wider playbook for testing pricing pages with real customer interviews.
• How to Run Pricing Research Surveys explains van Westendorp, Gabor-Granger and conjoint for willingness-to-pay work.
• Van Westendorp Price Sensitivity Meter details the four-question method and its limits.
• Structured Questions in AI Interviews covers all six question types used in the comprehension protocol.
• Advertising Claim Substantiation sets out the general evidence standard for any marketing claim.
• How to Research a Price Increase addresses the adjacent question of communicating a change in price.

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