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1 minute read
Price bundling refers to when several products or services are sold together as one single package. It is commonly used by sellers to limit the transparency for the buyer, so the buyer can’t scrutinize the price of each product in the bundle and whether or not this is in line with his or her willingness-to-pay. Thus, although the products are discounted, the seller can increase profits by selling products that the buyer wouldn’t else have bought.
McDonald’s meals are examples of this concept, and the fast food chain recently got into trouble over their “Extra Value Meals”, where they bundled cheeseburgers with drinks and fries. Customers were complaining that the bundle price was higher than each item bought separately, and while it is perfectly legal (and sometimes a very effective technique) to bundle products at a total price that is higher than the individual product prices added together, the claim that the bundle offers “Extra Value” has now resulted in a class-action lawsuit against the fast food giant.
