Cineplex's $38.9 million fine for ‘drip pricing’ is a justified punishment
Charging customers hidden fees is a deceptive marketing practice and hinders consumer trust
The Competition Tribunal’s decision to fine Cineplex Inc. $38.9 million for charging customers a hidden $1.50 online booking fee has sparked debate about the transparency of consumer practices.
The tribunal’s ruling classifies this fee as “drip pricing,” a strategy where additional costs are only revealed late in the purchase process, leaving customers feeling misled.
Although Cineplex has continued to charge the fee despite the ruling, the controversy highlights a larger issue — the ethics of hidden fees and their impact on consumer trust.
The fine imposed on Cineplex is justified. Companies, especially industry leaders, have a responsibility to be transparent in their pricing. By not disclosing the full cost upfront, Cineplex engaged in deceptive marketing practices, drawing customers in with the promise of lower prices only to surprise them at checkout. This undermines consumer trust and leads to frustration, as people expect businesses to be honest about the final price from the start.
Hidden fees like this online booking charge are often seen as a quick way for companies to boost revenue, but they come at a cost to their reputation. When customers feel deceived, they are less likely to remain loyal to a brand, as per an article on Medium.
In this case, Cineplex’s decision to keep the online booking fee even after the ruling further aggravates the situation. It raises the question of if movie theatres should even charge for online bookings.
In today’s digital age, where online transactions have become the norm, charging extra for such services seems unnecessary and unfair. It feels like a tactic to squeeze more money out of customers rather than a necessary operational cost.
Furthermore, hidden fees in any industry creates complications. Not only do they diminish trust, but they also make it harder for consumers to make informed choices.
When a price is advertised, consumers naturally assume it reflects the full cost. Discovering additional fees later can make them feel trapped or manipulated into paying more than they initially intended. This undermines the concept of fair competition, as businesses with seemingly lower upfront costs may win customers over those that are transparent about their pricing.
In the case of Cineplex, the fine serves as a message that deceptive pricing practices won’t be tolerated. If the company is genuinely concerned about covering online booking costs, it should be upfront about the fees from the start.
Transparency is not just a legal obligation but a crucial element in maintaining consumer trust. Cineplex has an opportunity here to rebuild that trust by eliminating hidden fees, or, at the very least, making them clear from the outset.
Overall, the $38.9 million fine is not only justified but necessary to remind companies of their duty to consumers. Movie theatres — and businesses in general — should avoid hidden fees and embrace transparency in pricing.
It’s time for Cineplex and others to put their customers first and ensure that deceptive marketing practices become a thing of the past.
