Pricing
Tax-Inclusive vs Tax-Exclusive Pricing A/B Test
A pre-tax headline price shows a smaller number, while a tax-inclusive price shows the amount payable. Buyer expectations may differ, and this comparison is appropriate only where both displays are permitted. Keep the actual price, tax, and final amount unchanged, and state tax treatment clearly.
A/B test scenario. This page is a test plan, not the result of a real experiment.
- Pricing
- Revenue per visitor (RPV)
Option A vs Option B
Two alternatives; neither is the incumbent.
- Changed
- Options
- Page
- Pricing
- Difference
- changed
Hypothesis
A pre-tax headline shows a smaller number that may look more appealing at first glance, while a tax-inclusive price shows the amount payable up front. The pre-tax display could move more visitors toward payment, but if the final amount surprises them, the tax-inclusive display may earn more revenue per visitor.
Test plan
When to run this test
In a market that permits both displays, support questions like "Why is the amount different?", abandonment that rises when the total appears at the payment step, or disputes over an unexpected amount mean buyers are unsure what they will pay. One of the two displays should then bring visitors to the final total prepared for it, with payment-step abandonment staying low. Do not run it where consumers must see tax-inclusive prices, since there is no real choice there, and check the target market's display rules before launch.
How to measure success
Revenue per visitor (RPV)
Compare revenue within each eligible market and buyer type over the same attribution period.
Also track
- Payment-step abandonment rateMake sure exits caused by a higher displayed amount do not increase.
- Purchase conversion rate (CR)Track how purchase rate changes.
- Price-related support contactsTrack questions such as “Why is the amount different?”.
- Returns or disputesTrack disputes caused by an unexpected amount.
How to set it up
- Main priceCompare a tax-inclusive total with a tax-exclusive amount that has a separate tax line.
- Amount dueShow the final total clearly in both arms before commitment.
- Combined displayShowing both main prices together is a separate comparison.
- Buyer typeRandomize within eligible business and consumer groups rather than making them opposing arms.
- MarketDefine display eligibility before assignment and interpret each market separately.
What to watch when reading the result
- 1Even if conversion rises with the tax-exclusive display, compare the two on revenue per visitor. Read payment-step abandonment, price-related support contacts and disputes together; a smaller headline that later surprises buyers is not a win.
- 2Interpret each market separately and do not carry a result from one market to others. If the tax-exclusive label was hard to read, or the shipping-fee display changed too, the result no longer isolates the effect of tax display.
- 3Because buyer type and market eligibility are set before assignment, confirm that the arms fill each group in the planned shares, and fix assignment first if they are off (sample ratio mismatch). If assignment is sound and the gap is still small, remember the data is split by market, and work out the sample per variant each market needs with the sample size calculator. If a market's traffic falls short, consider running longer or leaving that market's result open.
Frequently Asked Questions
Can tax-inclusive versus tax-exclusive display be tested in every market?
No. Both presentations must be permitted for the eligible context. Where tax-inclusive consumer pricing is required, it is not an optional experiment arm.
When should the final amount appear with tax-exclusive pricing?
Make the full payable total clear before commitment. Actual price and tax remain unchanged. The tax-exclusive qualifier must be readable.
Can business buyers and consumers be assigned as opposing arms?
No. Randomize within a common eligible pool, balancing by group where needed. Use consistent revenue definitions and follow-up windows rather than treating buyer differences as treatment effects.
Can a result in one market be extended elsewhere?
Validate other legal and buyer contexts separately. Use RPV as the primary outcome and monitor checkout exits and amount-related complaints.
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