In April 2026, StubHub paid $10 million in restitution because, for a single weekend in May 2025, it advertised live-event ticket prices that did not include mandatory fees. Two days of non-compliance. Eight figures of damage. And the price disclosure rules StubHub stumbled over are now spreading rapidly through state legislatures.
If you sell hotel rooms, concert tickets, restaurant meals, vacation rentals, or any kind of subscription, the era of "starting at $99" followed by a checkout page revealing a $40 resort fee, a $12 service charge, and a $5 "convenience" fee is over. Regulators have spent the last 24 months methodically dismantling drip pricing. Plaintiff's lawyers have followed close behind with class actions. And the rules are not federal-only — every state is now writing its own version, each with its own quirks.
This guide walks through the four overlapping regimes you actually have to comply with in 2026: California's SB 478 Honest Pricing Law, the FTC's Rule on Unfair or Deceptive Fees, the Minnesota and Massachusetts cross-industry junk fee bans, and the upcoming Connecticut and ticketing-specific laws. By the end you'll have a checklist you can hand to your engineering team this week.
Why "Drip Pricing" Became Regulators' Favorite Target
Drip pricing — the practice of showing a low headline number and adding mandatory fees incrementally during checkout — works because consumers anchor on the first price they see. Studies cited by the FTC estimate that drip pricing costs U.S. consumers more than $11 billion per decade in wasted search time alone, on top of the financial harm of paying more than the advertised price.
The FTC, state attorneys general, and the plaintiff's bar all see the same pattern: when the headline price isn't the real price, competition stops working. A hotel that quotes $149 but actually charges $199 with resort fees can undercut an honest competitor that quotes the true $189 price. The consumer who sorts by price gets the dishonest result. So the fix that regulators converged on is simple in concept and brutal in implementation: the advertised price must equal the total mandatory price.
California SB 478: The Cross-Industry Hidden Fees Statute
Effective July 1, 2024, California's SB 478 — the "Honest Pricing Law" — amended the Consumers Legal Remedies Act (CLRA) to make it illegal for most businesses to advertise, display, or offer a price for a good or service that does not include all required fees or charges, with two narrow exceptions: government-imposed taxes and reasonable shipping costs for physical goods.
The Core Rule
The price a Californian sees must equal the price they pay. SB 478 does not regulate how much you can charge or what you can charge for — it only regulates how you present the price. You can still have a $40 resort fee. You just have to bake it into the headline number.
The Restaurant Exception (SB 1524)
A last-minute amendment, SB 1524, carved out restaurants, bars, and certain food vendors. They may continue to charge mandatory service fees, surcharges, and automatic gratuities — but only if the fee is "clearly and conspicuously" displayed wherever prices are shown. This exception does not extend to food delivery platforms, which must follow the standard SB 478 all-in pricing rule.
In practice, restaurants are using one of three patterns: (1) all-in menu prices with no surcharge; (2) standard menu prices plus a clearly disclosed flat percentage service charge printed on every menu page, the website, and the receipt; or (3) gratuity-included pricing with a tip line still available for optional additional tipping.
Enforcement and Damages
The teeth on SB 478 come from California's pre-existing consumer protection ecosystem. Because the law is built into the CLRA, plaintiffs can sue individually or on a class-wide basis. Available remedies include actual damages with a $1,000 minimum per class member, restitution, injunctive relief, and attorneys' fees.
Because the same conduct also violates California's Unfair Competition Law (UCL) and False Advertising Law (FAL), plaintiffs typically plead all three. UCL adds civil penalties of up to $2,500 per violation when brought by public prosecutors. Class actions against airlines, hotels, ticket platforms, and event venues started filing within weeks of the July 1, 2024 effective date and have not slowed down.
What's a Violation, Practically
The California AG's FAQs clarified several gray areas:
- A restaurant may not list "$15 burger" and then add a 4% surcharge at the register. The price must include the surcharge or the surcharge must be the clearly disclosed mandatory service charge under SB 1524.
- Discounts and promotional ads that don't list a price (e.g., "20% off") don't violate SB 478, but they remain subject to general truth-in-advertising rules.
- Government-imposed taxes (sales tax, hotel occupancy tax, ticket excise tax) and reasonable shipping for physical goods are excludable. Mandatory "facility fees" set by private venues are not.
- "Per-night" hotel pricing must include resort fees, destination fees, and any mandatory cleaning charge. Optional add-ons like parking and pet fees may be presented separately if they're truly optional.
The FTC Rule on Unfair or Deceptive Fees
The FTC's final Junk Fees Rule (16 CFR Part 464) took effect on May 12, 2025, after being published in the Federal Register on January 10, 2025. Unlike SB 478, the federal rule is narrower in industry scope but broader in geographic reach.
Who It Covers
The FTC rule covers any business that offers, displays, or advertises live-event tickets or short-term lodging. That includes hotels, vacation rentals, home-share platforms, primary ticket sellers, secondary ticket marketplaces, resellers, and travel agents. It applies whether the offer appears online, in a physical location, or through any other medium.
The Two Affirmative Duties
The rule imposes two main duties on covered businesses:
-
Total price disclosure — Clearly and conspicuously display the total price, including all mandatory fees, more prominently than any other pricing information. This must appear when the price is first shown and throughout the purchasing process, before the consumer is asked for payment information.
-
No fee misrepresentation — Do not misrepresent the nature, purpose, refundability, or identity of any fee or charge in any advertisement or sales process.
What Can Be Excluded From "Total Price"
Only three categories may be excluded from the headline total: (1) government-imposed taxes and fees, (2) shipping or freight charges, and (3) truly optional fees the consumer can avoid (for example, optional travel insurance, optional parking at a hotel, optional priority seating upgrades). Mandatory resort fees, destination fees, cleaning fees, service charges, ticket processing fees, electronic delivery fees, and convenience fees must all be in the upfront total.
Civil Penalties
The FTC can seek civil penalties of up to $53,088 per violation under the Federal Trade Commission Act, indexed annually for inflation. "Per violation" is interpreted aggressively — each transaction with non-compliant pricing can be its own violation, which is how the StubHub settlement reached $10 million for only two days of activity.
The State Junk Fee Patchwork: 2026 Map
The federal rule covers only tickets and lodging. State legislatures rushed to fill the cross-industry gap. As of June 2026, the landscape looks like this:
Minnesota (HF 3438) — Effective January 1, 2025
Amended the Minnesota Deceptive Trade Practices Act to require all mandatory fees be included in the advertised price across all consumer goods and services. Restaurants and hotels may still charge mandatory gratuity if the percentage is clearly disclosed alongside pricing — because gratuity revenue goes to workers, not the employer. Metropolitan airports got a six-month extension until June 2025.
Massachusetts AG Regulations — Effective September 2, 2025
Cross-industry rule requiring disclosure of the "maximum price a consumer must pay for a product, inclusive of all fees, charges, or other expenses." Massachusetts notably does not distinguish between mandatory and avoidable fees — both must be disclosed up front, with the nature and purpose of each disclosed. Civil penalties of up to $5,000 per violation.
Connecticut — Effective July 1, 2026
A cross-industry ban with a particularly broad scope. Connecticut's law may require flat-rate shipping fees to be included in the displayed total under certain circumstances, departing from the FTC and California carve-outs. The Connecticut AG has already pursued a $39 million claim in a related case, signaling aggressive enforcement.
New York
Adopted a ticketing-focused all-in pricing law with disclosure rules currently effective through July 1, 2026 (subject to reauthorization). The New York rule applies to primary and secondary ticket sellers and includes resale price cap disclosures.
Maryland, Tennessee, and Others
Have adopted ticketing-focused laws requiring disclosure of all fees in the headline ticket price. Several other states have introduced legislation targeting either rental housing junk fees or cross-industry pricing transparency.
Where Drip Pricing Most Often Hides
Most non-compliance isn't intentional fraud — it's accumulated technical debt in checkout systems built before the rules existed. Common hot spots:
- Booking engines that pass headline rate to the front end but compute resort and cleaning fees server-side
- Third-party metasearch (Google Hotel Ads, Kayak, Trivago) where rate parity feeds inherit pre-rule price formats
- Promotional emails and SMS that quote a starting price without total
- Print menus and digital menu boards that haven't been reformatted since the SB 1524 amendment
- Subscription trial funnels that show "$0 for 30 days" without prominently disclosing the post-trial renewal price (this overlaps with the FTC's separate Negative Option Rule)
- Event ticketing pages where service fees only appear at the seat-selection step
- Vacation rental listings where cleaning fees only display after dates are entered
- Online food ordering where service fees and small-order fees appear only on the order confirmation screen
A Practical Compliance Checklist
Use this as a starting checklist for any business that advertises consumer prices.
1. Inventory Every Mandatory Fee
Pull a list of every fee that could be added during a transaction. Tag each as mandatory (consumer cannot avoid it), optional (consumer can decline it), or government (tax or government-imposed fee). The mandatory list is what must be baked into the headline price.
2. Audit Every Surface Where a Price Appears
Map every consumer-facing surface that displays a price: homepage banners, category pages, product detail pages, search results, comparison tools, mobile app screens, paid search ads, social media ads, email campaigns, SMS messages, push notifications, printed materials, in-store signs, and customer service scripts. Every one must show the all-in total.
3. Update Your Pricing Engine
Most non-compliance lives in the pricing engine architecture. The traditional flow — calculate base price, render to UI, add fees at the order calculation step — has to change. The new flow calculates the total mandatory price as the canonical "price" attribute and treats line-item itemization as an optional drill-down view.
4. Update Display Conventions
The total price must be displayed at least as prominently as any other pricing element. You can still itemize fees in a breakdown, but the breakdown cannot be the headline — the headline must be the total. Avoid asterisks and footnotes for mandatory fees.
5. Update Third-Party Feeds
If your prices flow into Google Hotel Ads, Expedia, Booking.com, Vrbo, StubHub, Ticketmaster resale, or any metasearch tool, verify that the feed sends the total price (or a compliant base price plus a complete mandatory fee schedule). Booking.com and others have published technical compliance guides for travel partners.
6. Rewrite Subscription and Trial Funnels
Subscription companies must show the post-trial recurring price as prominently as the trial price, and the cancellation mechanism must be at least as easy as the signup mechanism (the latter requirement is from the FTC Negative Option / Click-to-Cancel direction even where the rule itself is in litigation, plus state ROSCA-equivalent laws).
7. Document Your Compliance Decisions
When the AG, the FTC, or a class action lawyer comes asking, you want a paper trail showing how you classified each fee, how you tested each checkout flow, and when you updated each surface. Keep dated screenshots and engineering tickets.
8. Train Frontline Staff
Reservation agents, restaurant hosts, ticket window staff, and customer service reps need updated scripts. A reservation agent who quotes a "starting rate" over the phone can create the same violation that the website carefully prevents.
How Bookkeeping Connects to Junk Fee Compliance
Compliance isn't only a marketing and engineering problem — it's an accounting problem. Reclassifying a former "fee" as part of base price can shift how revenue is recognized, how royalties are calculated, and how franchisees are charged. A few patterns worth getting right in your books:
- Service charges versus tips. If you absorb a former tip line into a mandatory service charge to comply with SB 478 or the FTC rule, that revenue is no longer treated as tip income for FICA tip credit purposes under IRS Rev. Rul. 2012-18. It becomes employer revenue subject to ordinary payroll taxes. Track these separately in your chart of accounts.
- Refund reserves. Expect a higher rate of refund and chargeback requests during the transition — customers who didn't realize a fee was "always" baked in may dispute the total. Maintain an explicit refund reserve account.
- Class action accrual. If you operate in California, Minnesota, Massachusetts, or Connecticut, treat plaintiff demand letters as triggers for reviewing whether an ASC 450 loss contingency reserve is appropriate.
- Pass-through transparency. If you pass any third-party fee through to consumers (payment processing, platform fees, hotel district assessments), document the pass-through structure so auditors can distinguish it from your own revenue.
A plain-text, versioned ledger makes this kind of reclassification dramatically easier than a black-box accounting tool, because every historical line item is inspectable, diffable, and amendable without risking the integrity of past close books.
Common Mistakes to Avoid
A few traps that have caught operators flat-footed in the last 18 months:
- Assuming "starting at" language is safe. California courts have allowed claims to proceed where "starting at" pricing didn't include unavoidable fees that applied to every available rate.
- Treating service charges as tips. SB 478 and IRS guidance treat mandatory service charges as employer revenue, not tip income. Mislabeling creates both pricing-law liability and payroll tax exposure.
- Relying on "small print" disclosure. Both California and the FTC define "clear and conspicuous" strictly. Footnotes, hovers, and modal popups generally do not satisfy the standard for total price.
- Forgetting third-party platforms. Liability often runs to whoever advertises the price. If a wholesaler or OTA shows your room with hidden resort fees, both you and the platform can be on the hook.
- Treating compliance as a one-time project. State laws keep expanding. Build a compliance review into every product launch, pricing change, and marketing campaign.
Keep Your Pricing Books Honest, Too
As you rebuild your checkout for all-in pricing, your books should reflect the same transparency you're now offering customers. Beancount.io provides plain-text, version-controlled accounting that makes it trivial to reclassify revenue accounts, track fee pass-throughs, and produce audit-ready records when a regulator or class action lawyer comes calling. Get started for free and see why developers and finance teams use plain-text accounting to keep complete control of their financial data.