The short version
- The FTC's Rule on Unfair or Deceptive Fees, 16 CFR Part 464, has been in force since 12 May 2025 — but its "covered good or service" is only live-event tickets and short-term lodging. It is not a general e-commerce pricing rule.
- California's Consumers Legal Remedies Act reaches essentially every seller. Under Civil Code § 1770(a)(29) only government taxes and actual postage may sit outside the advertised price; every other mandatory charge belongs inside it.
- A charge is optional only if the customer can genuinely decline it. A processing fee nobody can avoid is a mandatory fee, whatever the checkout calls it.
- The enforcement gap is the practical point. The FTC rule gives a consumer nothing to sue on; the CLRA carries a private right of action with restitution and a mandatory fee award to a winning plaintiff.
Two rules are routinely described as the same rule. They are not, and the difference decides what your checkout page has to look like.
The federal rule is not an e-commerce pricing rule
The FTC's Rule on Unfair or Deceptive Fees, 16 CFR Part 464, was published on 10 January 2025 and took effect on 12 May 2025. Its operative prohibition in § 464.2(a) is broad in what it forbids — offering, displaying or advertising any price without clearly and conspicuously disclosing the total price — but narrow in what it applies to. Everything in the part turns on the defined term "covered good or service", and § 464.1 defines that as exactly two things: live-event tickets, and short-term lodging, including hotels, motels, inns, short-term rentals and vacation rentals.
That narrowing was deliberate. The proposal had been economy-wide; in the final rule the Commission found the practices "widespread across the economy" but chose "in its discretion, to focus this final rule on the industries in which the Commission first evaluated drip pricing". For everything else it said it "will address unfair and deceptive pricing practices in other industries using its existing section 5 authority" — case-by-case enforcement against deception, not a pricing standard you can read off a page.
California's rule is the one that reaches an ordinary shop
California amended the Consumers Legal Remedies Act instead of writing an industry rule. Civil Code § 1770(a)(29)(A), operative since 1 July 2024, makes it an unlawful practice to advertise, display or offer "a price for a good or service that does not include all mandatory fees or charges" other than two things: taxes or fees imposed by a government on the transaction, and postage or carriage charges reasonably and actually incurred to ship the physical good to the consumer.
The chapeau of § 1770(a) is what gives it reach. It applies to the listed practices "undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer". There is no industry list, no revenue threshold and no small-seller exemption. The carve-outs are specific rather than structural: a safe harbour for broadband providers using the FCC consumer label, an exemption for financial entities already making disclosures under the Truth in Lending Act and its relatives, and a restaurant, bar and grocery carve-out that still requires the fee to be displayed with an explanation of its purpose — and which expressly does not extend to third-party food delivery platforms.
Two rules, and the ground only one of them covers
FTC Part 464 only
- Live-event tickets
- Hotels and short-term rentals
- Total price shown most prominently
- Nature and purpose of excluded fees
Both
- Mandatory fees inside the headline price
- Government charges may sit outside
- Real shipping cost may sit outside
- Regulator enforcement
California CLRA only
- Every other seller and sector
- Marked-up handling is not postage
- Private right of action
- Statutory cure notice first
So the honest answer to "do I have to show the all-in price?" depends on where your customer is, not on what you sell. A one-person shop selling candles can be flawlessly compliant with Part 464 — candles are not a covered good — and be in breach of § 1770(a)(29) on the same page.
What "total price" actually means
Federally, total price is defined as the maximum total of all fees a consumer must pay for the good or service and any mandatory ancillary good or service, excluding government charges, shipping charges and charges for any optional ancillary good or service. California gets to a similar place from the other direction: everything mandatory is in, except government taxes and actual postage.
Two details in those definitions do most of the work. First, "shipping charges" is defined federally as charges that reasonably reflect what the business incurs to send physical goods, and California's exception is limited to postage "reasonably and actually incurred". A padded handling fee is therefore not shipping under either rule — it is a mandatory charge that belongs in the advertised price. If your shipping policy quotes a flat rate well above carrier cost, that gap is the exposure.
Second, the test for "optional" is whether the customer can actually decline. The Commission gave the example directly: a trip protection plan a guest may decline is optional; a breakfast voucher every guest must buy is mandatory. It went further and said that where a business charges payment processing fees the consumer cannot reasonably avoid, those are for a mandatory ancillary good or service. A fee that is pre-ticked, or that appears on every order regardless of what the customer chooses, is mandatory whatever the checkout labels it.
| The charge | Mandatory? | Where it has to appear |
|---|---|---|
| Service fee added to every ticket | Yes | Inside the headline price — the core case Part 464 was written for. |
| Booking fee on a hotel reservation | Yes | Inside the total price, shown more prominently than any other pricing figure. |
| "Processing fee" on every order | Yes, if unavoidable | Inside the advertised price under the CLRA. Naming it a processing cost changes nothing. |
| Resort, amenity or destination fee | Yes | Inside the total price. The rule preamble names these as the paradigm case. |
| Cleaning fee on a short-term rental | Yes | Inside the total price — it does not depend on the guest's use of anything. |
| Trip protection the guest can decline | No | May be shown separately, but only while it is genuinely declinable. |
| Sales tax and government fees | No | May sit outside the headline figure under both rules. |
Get the pricing terms right in writing
The checkout display and the written terms have to agree. A terms of service that describes charges the page does not show, or vice versa, is the mismatch a regulator reads first.
The duty people miss: say what the excluded charge is for
Getting the headline number right is only half of Part 464. Section 464.2(c) adds a second obligation, owed before the consumer consents to pay: disclose clearly and conspicuously the nature, purpose and amount of any fee excluded from the total price, the identity of the good or service it is imposed for, and the final amount of payment.
That is why a line reading "fees and taxes: $38.40" fails even where the underlying charge is properly excludable. The consumer is told the amount and nothing else. Section 464.3 closes the loop from the other side by making it a violation to misrepresent the nature, purpose, amount or refundability of any fee — the last of which catches the common practice of taking a non-refundable booking fee without saying it is non-refundable.
California has no general equivalent, but the same idea appears inside its carve-outs: a restaurant or grocery mandatory fee must be displayed with an explanation of its purpose, and Minnesota requires a delivery platform to disclose the additional fee before the customer selects items and to itemise it on a subtotal page before checkout. The direction of travel is consistent. An amount alone is not a disclosure.
Why the enforcement asymmetry matters more than the rules
Part 464 is enforced by the Commission. Nothing in it creates a consumer cause of action, and the preamble frames every remedy as one the Commission obtains in court: consumer redress under section 19 of the FTC Act and civil penalties under section 5(m)(1)(A), which the Commission described as the benefit of proceeding by rule rather than by case-by-case deception claims. The practical consequence is that a small seller in a covered industry faces regulator risk, not litigation risk.
The CLRA is the opposite. Civil Code § 1780 lets any consumer who suffers damage sue for actual damages, an injunction, restitution and punitive damages, with a floor of $1,000 on a class award, and § 1780(e) requires the court to award costs and attorney's fees to a prevailing plaintiff. That fee-shifting provision, not the size of the fee, is what makes a $4 processing charge worth a lawyer's attention.
Where a checkout page actually sits
What you sell
Mandatory fees in the advertised price
All of them are
Some appear at checkout
Tickets or short-term lodging
Compliant on both
Still check the § 464.2(c) disclosures: nature and purpose of anything excluded, before payment.
Two exposures at once
A Part 464 violation carrying civil penalties, and a CLRA claim from the same customer.
Anything else
Federally clean, state exposed
Part 464 does not reach you. Section 1770(a)(29) does, and it comes with a private action.
The safe position
One number, everything mandatory inside it, tax and real postage added at the end and explained.
The state roster, as at August 2026
This is the part of the answer with the shortest shelf life. The following was checked in August 2026; treat it as a snapshot and recheck before relying on it.
- California — Civil Code § 1770(a)(29), operative 1 July 2024. All-in advertised pricing, taxes and actual postage excepted, private right of action through the CLRA.
- Minnesota — Minn. Stat. § 325D.44 subd. 1a, effective 1 January 2025. A deceptive trade practice to advertise a price that excludes mandatory fees, with "mandatory" defined to include any fee a reasonable person would expect to be included.
- Massachusetts — 940 CMR 38.00, promulgated by the Attorney General in March 2025 under c. 93A § 2, requiring clear and conspicuous disclosure of the total price of an advertised product.
- Virginia — Va. Code § 59.1-200(A)(79), a duty to disclose the total cost including mandatory fees before the agreement is entered into, which is a disclosure rule rather than an advertised-price rule.
Section 464.4 of the federal rule settles how these interact: state law is not superseded except to the extent it is inconsistent, and a state law is not inconsistent merely because it protects consumers more. In practice that means the strictest applicable rule governs your page, and for a national storefront that is currently California.
What this means for a checkout you actually have to build
The build, in the order it matters
- List every charge that appears on an order. For each, ask whether a customer could complete the purchase without paying it.
- Move every unavoidable charge into the displayed price — the listing price, the search result and the cart, not just the final screen.
- Check that any charge you call shipping reflects what carriage actually costs; the mark-up portion is a mandatory fee.
- Give every excluded charge a short line saying what it is for, before the payment step rather than on the receipt.
- Say plainly whether a fee is refundable, and make the refund policy match.
- Re-check anything sold on a recurring basis, where the renewal price and the sign-up price are separately regulated.
Subscriptions are the place this most often unravels, because the disclosure duty and the auto-renewal rules run on top of each other and the price that renews is frequently not the price advertised. If you sell on a subscription agreement, the all-in figure has to be right for the renewal term as well as the first one.
The conclusion worth keeping
The federal rule is the one that got the coverage and the state rule is the one that will decide your case. That inversion is not a quirk of 2025 — it is what happens when a regulator narrows a rule to two industries and thirty states carry on legislating. Reading Part 464 to find out whether your shop is compliant is reading the wrong document.
The design that survives all of it is unglamorous: one number that a customer could pay without anything else being added, tax and genuine postage on top, and a sentence explaining anything that sits outside. Build that and the roster stops mattering — which is worth more than tracking it, and easier than keeping the rest of your legal pages current.
Sources
- FTC Rule on Unfair or Deceptive Fees, 16 CFR Part 464 — 90 FR 2066 (10 January 2025)
- California Civil Code § 1770 — Consumers Legal Remedies Act, deceptive practices
- California Civil Code § 1780 — remedies available to a consumer
- California Civil Code § 1782 — the 30-day notice and cure requirement
- Minnesota Statutes § 325D.44 — deceptive trade practices, subd. 1a
- 940 CMR 38.00 — Unfair and deceptive fees (Massachusetts Attorney General)
- Virginia Code § 59.1-200 — prohibited practices, subdivision A(79)
General information, not legal advice. This guide explains how these documents and rules generally work. Law varies by jurisdiction and changes, and none of it is applied to your circumstances here. For anything consequential, consult a licensed attorney where you are.
Frequently asked
Does the FTC junk fees rule apply to my online store?
Almost certainly not. 16 CFR Part 464 applies only to a "covered good or service", which § 464.1 defines as live-event tickets and short-term lodging. A general e-commerce shop falls outside it. The Commission said it would address pricing practices in other industries using its existing section 5 authority instead, so deception liability remains — but the specific total-price rule does not apply.
Can I add a processing fee at checkout?
Only if the customer can genuinely avoid it. The FTC treats payment processing fees a consumer cannot reasonably avoid as charges for a mandatory ancillary service, which belong inside the total price. California reaches the same result: an unavoidable charge is a mandatory fee under Civil Code § 1770(a)(29) and must be in the advertised price. A fee applied to every order is mandatory whatever it is called.
Are taxes and shipping included in the price I have to advertise?
No, both may sit outside the headline figure. But the shipping exception is narrower than sellers assume: federally it covers charges that reasonably reflect what the business incurs, and California excepts postage "reasonably and actually incurred" to ship a physical good. A handling fee above real carriage cost is a mandatory fee, not shipping, and belongs in the advertised price.
Do I have to explain what a fee is for, or just show the amount?
Under the federal rule you must explain it. Section 464.2(c) requires disclosure, before the consumer consents to pay, of the nature, purpose and amount of any fee excluded from the total price, and the identity of the good or service it is charged for. Section 464.3 separately forbids misrepresenting a fee's purpose or refundability. A lump "fees and taxes" line does not satisfy either.
Can a customer sue me over a hidden fee, or only a regulator?
It depends which rule. Part 464 creates no consumer cause of action; the Commission pursues civil penalties and redress in court. California's CLRA does the opposite — Civil Code § 1780 gives the consumer damages, restitution and an injunction, and requires a fee award to a prevailing plaintiff. Section 1782 first requires 30 days' written notice and a chance to put it right.