Understanding Drip Pricing in Self-Storage

You may have heard the term ‘drip pricing’ before, or it may be completely new to you. Either way, it is becoming an important pricing issue for businesses and consumers—and self-storage operators should understand it.

Drip pricing is the practice of advertising a product or service at one price and then adding mandatory fees or charges later in the purchasing process.

In self-storage, for example, a customer may see a unit advertised online for $79 per month. However, once they begin the rental process, they discover an administrative fee, mandatory monthly service fee, required protection plan, or another charge that was not reflected in the advertised price.

Self-storage operators have used various move-in and administrative fees for years. The problem is not necessarily the existence of a fee. The concern is whether a mandatory fee was clearly included or disclosed when the price was advertised to the consumer.

When required charges appear only after the customer has invested time in the rental process, the customer may feel that the original advertised price was misleading.

Why Drip Pricing Matters to Self-Storage Operators

Drip pricing can affect more than the customer’s final bill. It can affect consumer trust, competition between facilities, and potentially regulatory compliance.

Imagine two storage facilities competing for the same customer. One facility advertises a unit for $89 per month and clearly communicates its required charges. Another advertises a similar unit for $69 but doesn’t reveal additional mandatory fees until the customer begins renting.

The second facility may initially appear to be less expensive—even if the customer’s actual cost is ultimately the same or higher.

That is one reason lawmakers and regulators have become increasingly interested in price transparency.

For self-storage operators, this means it is important to look at the entire customer journey: your website, online rental system, advertisements, telephone conversations, and in-person sales presentations. Is the customer receiving a clear picture of what they will actually be required to pay?

California’s SB 478 and the “Honest Pricing Law”

California provides one of the clearest examples of legislation addressing drip pricing.

California Senate Bill 478 (SB 478), commonly referred to as the Honest Pricing Law or Hidden Fees Statute, took effect July 1, 2024.

The law generally prohibits businesses from advertising or displaying a price for a consumer good or service that does not include mandatory fees or charges, with certain exceptions such as government-imposed taxes and reasonable shipping charges.

Importantly, SB 478 is a price-transparency law, not a price-control law.

Businesses can generally determine what they want to charge. The issue is how that price is presented to the consumer.

As the California Attorney General’s office explains, the law specifically targets drip pricing—advertising a price that is lower than the amount the consumer will actually be required to pay.

In simple terms, California’s goal is that the price a consumer sees should be the price they pay.

🔗 You can read the California Attorney General’s SB 478 guidance and FAQs here.

What Could This Mean for a Self-Storage Facility?

Consider a facility advertising:

10×10 Storage Unit — $89 per month

If every renter must also pay an additional mandatory $5 monthly service fee, California’s law raises an important question about whether advertising only the $89 price accurately represents the required price.

On the other hand, optional products and services are different. If a customer can genuinely choose whether to purchase something, that is different from a mandatory charge every renter must pay.

This distinction makes it important for operators to understand exactly which charges are mandatory and which are optional.

Operators should also consider whether their employees understand the difference. A website can provide transparent pricing, but if a manager quotes an incomplete price over the telephone, the customer experience may still be confusing.

Drip Pricing Is Different From Dynamic or Surveillance Pricing

Another pricing practice receiving increasing attention is surveillance pricing, sometimes discussed alongside dynamic or algorithmic pricing.

Although these subjects relate to price transparency, they are not the same as drip pricing.

Drip pricing involves additional mandatory charges being revealed during the purchasing process.

Surveillance pricing involves using information about a particular consumer to determine or influence the price that consumer sees.

That information could potentially include browsing behavior, shopping history, location, purchasing patterns, or other consumer data.

The concern is that sophisticated pricing technology could allow businesses to estimate an individual’s willingness or ability to pay and adjust an offer accordingly.

For example, two customers could potentially receive different prices for the same product or service based on information an algorithm has collected or inferred about them.

Why Surveillance Pricing Is Receiving Attention

The Federal Trade Commission has examined what it calls surveillance pricing, including how companies may use personal information and consumer behavior to categorize individuals and potentially tailor prices.

The FTC has specifically examined information such as a person’s location, demographics, credit history, browsing history and shopping behavior.

🔗 You can learn more through the Federal Trade Commission’s surveillance pricing study.

For self-storage, this is particularly interesting because our industry has become increasingly sophisticated in its use of technology, revenue management systems and pricing algorithms.

Using technology to help determine pricing is not automatically the same thing as surveillance pricing. The important question is what information is being used to establish the price and how it is being used.

States Are Beginning to Address Algorithmic Pricing

States are also beginning to examine the use of consumer data and algorithms in pricing.

For example, Maryland enacted legislation in 2026 restricting certain food retailers and third-party food delivery services from using consumer personal data to establish prices. While that law focuses on those industries—not self-storage—it demonstrates growing legislative interest in individualized and data-driven pricing.

🔗 You can review Maryland’s Protection From Predatory Pricing Act here.

Self-storage operators should be careful not to assume that every law addressing dynamic, algorithmic, or surveillance pricing automatically applies to storage facilities. Requirements vary considerably by state and industry.

However, the broader trend is worth watching.

What Should Self-Storage Operators Be Thinking About?

For storage operators, the biggest takeaway is transparency.

Look at how your facility communicates pricing throughout the entire rental process.

If your website advertises a unit for $59, what does the customer actually have to pay?

If your manager receives a telephone inquiry and tells the customer the unit is $59 per month, are there other mandatory monthly charges the customer doesn’t hear about until later?

What happens when the customer arrives at the facility?

Are there required administrative fees, protection plans, service charges, or other costs that haven’t previously been discussed?

The more consistent your pricing information is from website → telephone call → property visit → rental, the less likely the customer is to feel surprised or misled.

Price Transparency Is Also About Customer Service

This isn’t simply a regulatory issue. It is also a customer-service issue.

Think about the experience from the customer’s perspective.

If I believe I’m renting a storage unit for one price and then discover several required charges when I’m ready to sign the rental agreement, I probably won’t feel very good about the experience.

Even if those fees are perfectly legitimate, I may wonder: Why didn’t you tell me this earlier?

That is exactly the type of question operators should try to eliminate.

Managers should be comfortable explaining what a unit costs, what is included, which charges are required, which products are optional, and what the customer can expect to pay at move-in.

Protecting Consumer Trust in Self-Storage

Pricing technology will continue to evolve. Revenue management, dynamic pricing and sophisticated algorithms aren’t going away, and legislation surrounding pricing practices is likely to continue evolving as well.

That makes this an important topic for self-storage operators to watch.

Review your website. Review your online rental process. Listen to the way your managers quote prices over the telephone. Look at what customers see when they arrive at your facility.

Most importantly, make sure your customers understand what they are agreeing to pay before they reach the end of the rental process.

Transparency isn’t just about following the rules. It’s about being a good steward of the self-storage industry and building trust with the people who choose to store their belongings with us.

Accompanying Video: “Understanding Drip Pricing in Self-Storage”