Showing prices honestly: junk fees and drip pricing rules
Hidden fees added at checkout are now banned in more places. What the FTC fee rule and state drip pricing laws require, and how to show prices customers trust.
Junk fees and drip pricing are fees that appear only late in the buying process: a "service fee" at checkout, a "convenience fee" after the customer has chosen a time, a "resort fee" on the last screen. Since May 2025, a federal FTC rule requires live-event ticket sellers and short-term lodging businesses to show the total price, including mandatory fees, up front. California has banned drip pricing much more broadly since July 2024, and other states have passed their own versions. The simplest rule for any business: the first price a customer sees should include every fee they cannot avoid.
Beyond the law, hidden fees cost you customers. People who feel tricked at checkout abandon the cart, call to complain or leave a review about it. This guide explains the main rules in plain English and gives you a checklist for showing prices honestly. It is not legal advice; check with your attorney, especially if you sell in several states.
What counts as a junk fee
Regulators use a few terms:
- Drip pricing: advertising one price and adding mandatory fees later in the process.
- Mandatory fees: charges the customer has to pay to get the product or service as advertised, such as booking fees, service fees, cleaning fees or facility fees.
- Misleading fees: fees described in a way that hides what they are, such as a "processing fee" that is really just more profit, or a fee that suggests a government charge when it is not.
Optional add-ons the customer actively chooses, like an extended warranty or a premium time slot, are a different matter, as are government taxes and, in most rules, shipping.
The federal FTC fee rule
The FTC's Rule on Unfair or Deceptive Fees took effect on May 12, 2025. It covers two industries:
- Live-event tickets: concerts, sports, theater and similar events
- Short-term lodging: hotels, motels, vacation rentals and similar
Businesses in these industries must show the total price, including all mandatory fees, whenever they show a price, and display it more prominently than other pricing information. Government taxes and shipping charges can be shown separately, but must be disclosed before the customer pays. The rule also bans misrepresenting the nature, purpose or amount of any fee.
Earlier drafts would have covered nearly every industry. The final rule was narrower. But the FTC's general power to act against deceptive practices still applies to everyone, and it has brought cases over hidden fees in other industries before.
California's drip pricing ban
California went further. Since July 1, 2024, its law has made it unlawful to advertise, display or offer a price for a good or service that does not include all mandatory fees or charges, other than government taxes and fees and shipping costs. It applies to most consumer transactions, not just tickets and hotels.
Practical consequences:
- A cleaning company cannot advertise "$120 per visit" and then add a required "$15 trip fee".
- A gym cannot advertise a monthly rate without a mandatory "annual maintenance fee" folded in or clearly part of the total.
- An online store cannot add a mandatory "handling fee" that is not shipping.
Restaurants got a specific carve-out: they can keep mandatory service charges if the charge is disclosed clearly on menus and ads, subject to conditions. Check the current details if you run a restaurant in California.
Other states
Several other states, including Minnesota and Massachusetts, have adopted their own rules against hidden mandatory fees, and more states have considered them. Details differ: which businesses are covered, which fees can be shown separately and how prominent the total must be. If you sell to customers across many states, the practical approach is to follow the strictest rule everywhere: total price up front, every time.
Subscriptions and cancellation
Related rules cover subscriptions. The FTC's broader "click-to-cancel" rule was struck down by a federal appeals court in 2025, but the federal law on online subscriptions (ROSCA) still applies, and many states have automatic renewal laws, with California's among the strictest. They generally require clear disclosure of renewal terms, consent before charging and an easy online way to cancel. If you sell memberships, maintenance plans or subscriptions, review your sign-up and cancellation flow with your attorney.
A checklist for honest pricing
| Check | What to look for |
|---|---|
| First price shown | Includes every mandatory fee |
| "From" prices | Real, available, with mandatory fees included |
| Checkout | No new mandatory fees appear at the last step |
| Fee names | Describe what the fee is honestly |
| Taxes and shipping | Disclosed before payment |
| Ads and social posts | Same total price as the website |
| Subscriptions | Renewal terms clear, cancellation easy |
| Phone and in-person quotes | Same rules as the website |
Why honest pricing also sells better
Clear prices filter out people who cannot afford you before they take your time, and they build trust with those who can. On service websites, a pricing section or a "from" price with what is included tends to reduce back-and-forth on calls. When you advertise, a landing page with the same total price as the ad avoids the bait-and-switch feeling that kills conversions. The website conversion checklist covers pricing sections in more detail.
On my own site, prices are shown in US dollars as final amounts, with "from" where the price is a starting point, and the ad budget you pay to Google or Meta is listed separately because it goes to them, not to me. You can see how that looks on the pricing page.
Where to start
Go through your website, ads and checkout as a customer would. Note every price shown and every fee added. If anything appears late that the customer cannot avoid, fold it into the main price. Then check that ads and printed materials match. If you are rebuilding your site anyway, a clear pricing structure is part of how I approach business websites, and the legal pages guide covers the terms and policies that sit next to your prices.
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Pricing rule questions
Can I still advertise 'from' prices?
Generally yes, if the 'from' price is real and available, and any mandatory fees that apply to it are included. A 'from $99' cleaning where every booking also carries a required $25 service fee is the kind of thing drip pricing laws target. Include the mandatory fee in the 'from' price.
Do I have to include sales tax in the advertised price?
In most places no. The FTC fee rule and California's law both allow government-imposed taxes and fees to be shown separately, and shipping can usually be added later if disclosed. Check your state's specific rules with your attorney.
Does this affect service businesses or only ticket sellers?
The federal FTC fee rule is limited to live-event tickets and short-term lodging. State laws like California's apply much more broadly, to most goods and services sold to consumers. And the FTC can still act against deceptive pricing in any industry under its general powers.
What about credit card surcharges?
Surcharges are regulated separately by card network rules and state laws, and some states restrict or ban them. If you add one, disclose it clearly before payment and check the current rules in your state. Many businesses now build card costs into the price instead.
Want a pricing page
customers trust?
I build websites and landing pages that show clear prices, with all mandatory fees included, and the calculators and FAQs that answer the next question.