The encyclopedia · Advertising & PR · Marketing decision · 2018
Discount Car's advertised rates were unreachable — $700K to say so
Oct 2018: Discount Car & Truck Rentals paid $700K — the fourth rental company in Canada's drip-pricing sweep, for advertising prices plus undisclosed fees.
Discount Car & Truck Rentals Ltd. · 2018-10
What happened
Discount Car & Truck Rentals advertised rental prices that buyers could not actually pay: the advertised rates excluded fees that every renter had to pay, so the final price was always higher than the ad. The Bureau's investigation into the car-rental industry — which had already settled with Avis/Budget, Enterprise and Hertz — concluded Discount was making false or misleading representations about its prices and discounts.
The agreement of 11 October 2018 made Discount the fourth car rental company to settle the sweep: a $700,000 administrative monetary penalty and a review of its practices to bring them into compliance with the Competition Act.
The sweep's logic compounds: once the Bureau establishes that advertised prices must include mandatory fees, every competitor running the same playbook is priced in. Discount was not punished for inventing drip pricing — it was priced for being the last one still doing it.
Why it happened
- Advertised rates excluded fees every renter had to pay — the advertised price was unreachable.
- Discounts were represented in ways the Bureau found misleading.
- It was the fourth rental company in the same sweep — the industry playbook had already been ruled illegal.
The lesson
When a regulator rules an industry's pricing playbook illegal in one case, every company still running it is next: drip-pricing settlements price the whole market, one company at a time.
Aftermath
Discount brought its advertising into compliance as part of the agreement. The rental sweep closed with all four major Canadian players settled on the same rule: the advertised price must include mandatory fees.
Sources
- Competition Bureau — Discount car rental penalised for advertising unattainable prices
- Cassels — Fixing the Leak: Discount Fined $700,000 for Drip Pricing
spotted an error? The club wants to know.
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