Ali Demirbaş - Lab
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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.

  • Pricing
  • Revenue per visitor (RPV)

Option A vs Option B

Two alternatives; neither is the incumbent.

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Options
Page
Pricing
Difference
changed

Hypothesis

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.

How to run this test

Primary metric

Revenue per visitor (RPV)

Compare revenue within each eligible market and buyer type over the same attribution period.

Other metrics

  • 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.

What to check before and during the test

  • 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.

Setup mistakes to avoid

  1. 1Do not test tax-inclusive display in markets where it is required for consumers; there is no valid alternative there.
  2. 2Check target-market price-display rules before launching the variant.
  3. 3Do not make the tax-exclusive label too small to read.
  4. 4Do not change tax display and shipping-fee display together.
  5. 5Do not generalize a result from one market to others.