California’s Honest Pricing Law bans hidden mandatory fees and requires all-in advertised prices starting July 1, 2024. Details SB 478 and SB 1524 rules, plus exceptions for taxes, shipping, restaurants, optional add-ons, delivery, and ticket resales.
By Brad Nakase, Attorney
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Starting July 1, 2024, California’s new “Honest Pricing Law” (also known as the Hidden Fees law), SB 478, kicks in (updated later by SB 1524). The idea behind it is simple: businesses can’t flash one price in an ad or on a menu and then quietly attach extra mandatory fees at checkout. Whatever number a customer sees upfront is supposed to be the number they actually pay, except for government taxes and shipping charges.
The law doesn’t tell businesses what they can charge or how they should build their pricing. It just says: if the fee is mandatory, it belongs in the price you display. No surprises at the end.
A small carve-out exists for restaurants, bars, and some food businesses. If they choose to add a mandatory service fee, they’re allowed to keep it separate, but only if that charge is shown clearly and prominently wherever their prices appear. That’s the tweak introduced by SB 1524.
To help both businesses and customers understand what all this means in real life, the Attorney General’s Office has put out a set of FAQs. The California Junk Fee Law itself lives in Section 1770(a) (29) of the California Civil Code.
This rule was brought in to clamp down on drip pricing. It was that annoying routine where you see one price upfront and discover the real, higher price only when you’re ready to pay. It’s misleading, it’s considered deceptive, and regulators already view it as a problem. The point here isn’t to dictate how high or low a price should be, but to make sure the number a shopper sees is the number they actually deal with, so people can compare costs without feeling tricked.
The law applies to most goods & services sold or leased for personal use. Event tickets, hotel bookings, short-term rentals, & food-delivery applications are a few examples. Basically, the big areas where hidden fees usually show up. It doesn’t apply when the purchase is for commercial use, and some industries are carved out because they already follow their own pricing rules.
One more thing: these rules mostly skip the food world. If you’re buying a single food or drink item from a restaurant, bar, grocery store, concession stand, or a grocery-linked delivery service, the law doesn’t get involved. Catering menus and banquet contracts are also treated differently.
Honest pricing is required by law. Businesses are not allowed to “advertise, display, or provide a price for a commodity or service that excludes all obligatory fees or charges,” with the exception of taxes or fees imposed by the government or fair shipping expenses. Section 1770(a) (29) of the California Civil Code contains the full text of the law.
Taxes and/or fees levied by the government on the sale, such as sales tax, are not required to be included in the published or advertised price. Furthermore, appropriate transportation expenses for tangible goods are not required to be included in the listed or promoted price.
No. SB 478 is not a pricing control bill; rather, it is a transparency legislation. In principle, a firm is free to impose whatever it wants for an item or service, but it has to give a breakdown of the different costs or fees that are reflected in its published or promoted price, and to inform the customer of those fees & charges. Any amounts that the customer will have to pay must be included in the listed price.
No. Generally speaking, a company is free to set its own prices and can then give a breakdown of all the expenses that go into its listed or promoted price. However, the entire cost that a customer has to shell out for that commodity or service must be included in the listed price.
Shipping, yes. Handling, no. The law makes a clear distinction. A business is allowed to keep actual shipping charges separate, since those depend on getting the item to your doorstep. But anything labelled as a handling fee has to be baked into the upfront price. In other words, if it’s a required fee just for buying the product, it belongs in the number you first see — not added at the checkout screen.
No. Extras stay extras. If a customer chooses an upgraded feature, a premium service, or anything that isn’t essential to the base purchase, that cost can remain separate. The California Junk Fee Law mainly targets fees you cannot avoid.
Those don’t fall under the rule. The law is focused on mandatory fees. Costs a buyer must pay no matter what. Penalties or charges that depend on the customer’s future behavior, like returning equipment late or smoking in a non-smoking room, are conditional. Because they aren’t automatically imposed on every buyer, they don’t have to be listed in the advertised price.
No. The price that is posted or advertised must be the total amount that the customer must pay.
SB 478’s rules do not apply to mandatory fees levied by eateries, drinking establishments, and other specific food providers as long as the fee is prominently and clearly posted wherever prices are presented.
No. The entire amount that the customer must pay must match the price that was advertised to them.
SB 478’s rules do not apply to mandatory fees that eateries, pubs, and other specific food providers levy as long as the fee is prominently and clearly disclosed wherever prices are presented.
No. Any price that is offered or listed to the customer must be the total amount that the customer must pay.
SB 478’s rules do not apply to mandatory fees that eateries, pubs, and other specific food providers levy as long as the cost is prominently and clearly displayed wherever pricing appears (SB 1524).
Generally speaking, no, since a credit card fee for processing is not required if the client can pay with cash or another method. However, the credit card charge is required and must be incorporated into the price listed if a firm exclusively takes credit cards.
Indeed. The entire amount that the customer must pay must equal the price that is offered to them. The legislation does not restrict a merchant’s authority to add costs or fees to the entire price or to inform customers that those fees and charges are included in its rates.
Indeed. The price that is offered or listed to the customer must be the total amount that the customer has to pay.
If a company wants to show a price at all, then whatever number they display needs to reflect the full amount the customer will actually pay, minus only taxes, shipping, & any truly optional add-ons. That means no placeholders, no “starting at” figures that magically grow later.
If the business still hasn’t pinned down its actual charge at the moment a customer begins the transaction, the safest approach is simple: don’t show a price yet. Wait until the amount is clear. This keeps the company in line with the California Junk Fee Law and avoids misleading customers. Certain types of price discrimination are prohibited by various state and federal regulations, which businesses ought to be aware of.
When food delivery platforms disclose the pricing charged by a restaurant from which they serve meals, they are subject to additional regulations under Business & Professions Code section 22598, and this law does not alter those requirements. However, the food delivery service must promote the complete, all-in costs associated with the delivery service when it advertises the cost of the service itself.
No. If the law applies to the product or service, then whatever price the business puts out front has to include every mandatory charge—except two things: reasonable shipping for physical goods, and whatever taxes or government-imposed fees apply to the transaction. Everything else that the business must charge a customer has to be folded into the price people see.
If a business wants to, it can always share a later breakdown explaining how those charges are being used (security, rent, health benefits). That’s optional and has nothing to do with upfront pricing.
There is one carve-out. Restaurants, bars, and a few other food-service operators can still add mandatory fees separately, as long as those fees are clearly and prominently displayed everywhere the prices appear. If they hide it or bury it, they don’t get the exemption.
Since tips and gratuities are not required, the California Junk Fee Law has no bearing on them. Other rules, such as Labor Code section 350, regulate these voluntary contributions to employees. See the California Labor Commissioner’s FAQ for further details.
No. This legislation is not broken by a company that gives discounts or charges an individual a price lower than what is advertised. Advertising an amount that is lower than what the consumer will have to shell out for a commodity or service is simply forbidden by law.
Indeed. SB 478 blocks businesses from advertising a price that ends up being lower than what a customer actually pays. A time-based offer like “half-price after 4 pm” is fine because it’s simply announcing a discount, not hiding fees. The only catch is that the overall advertising still can’t be misleading. California already has other laws that take care of false or deceptive claims.
It does. The rule is the same whether the ticket is sold directly by the organizer or resold by a third party. If a business lists a price, that number must reflect the full amount a customer will be charged. Hidden fees aren’t allowed, whether the transaction happens online or in person.
Absolutely. The California Junk Fee Law doesn’t stop anyone from spelling out the math behind their pricing. If a company wants to break down its costs or explain why the total is what it is, it’s free to do so. It has to ensure that the price shown up front already includes all mandatory charges. Competition depends on recognizing the price of a commodity or service; therefore, it is dishonest to show a price that is lower than what the client would actually be charged.
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