Junk fees: what the US rules ask of your checkout

Junk fees are charges that turn up after the price you were shown: a service fee, a convenience fee, a processing fee, a resort fee, each added somewhere on the way to paying. The price at the start was never the price at the end. In the UK the same thing is called drip pricing, and the drip pricing post covers the CMA’s decisions on it.

This is the US side. It goes through the FTC’s rule, the three settlements the FTC has announced since it took effect, the state laws that reach well past tickets and hotels, and a check for your own checkout.

What junk fees are, with examples

The FTC’s announcement of its rule in December 2024 described the target as bait-and-switch pricing and hidden fees, and in the same breath said the rule does not prohibit any type or amount of fee. The Massachusetts Attorney General’s office uses a wider definition: hidden, surprise, or unnecessary costs that increase the total price of a product beyond the advertised price.

These are the shapes they take in practice:

• A ticket priced at one figure in the search results and a higher one on the payment page, once a service fee and a delivery fee are added.
• A hotel room priced per night, with a resort fee that appears after you’ve chosen your dates.
• A “convenience fee” for paying online, when online is the only way to pay.
• An add-on labelled optional that’s already ticked and already in the total.

The FTC’s rule on unfair or deceptive fees

The rule is 16 CFR Part 464. It took effect on 12 May 2025 and covers any business that offers, displays or advertises live-event tickets or short-term lodging, including platforms, resellers and travel agents. Short-term lodging means hotels, motels, inns, short-term rentals and vacation rentals.

Three things it asks for. The total price, defined as the maximum total of all fees or charges a consumer must pay, goes wherever a price is shown. It has to be shown more prominently than any other pricing information, with the final amount at least as prominent. And before the customer agrees to pay, the business says what any excluded charge is for and how much it is.

Only three kinds of charge can sit outside the total: taxes and other government charges, shipping, and charges for things the customer chooses to add. The FAQ also covers labels. Sellers are asked to describe what a fee is for and to avoid vague names such as convenience fee, service fee or processing fee. Calling a fee “government required” when it isn’t, or padding a taxes-and-fees line with money the seller keeps, are its examples of a misleading fee.

If you sell software, shoes or courses, this rule doesn’t reach you. The state laws do, and so does Section 5 of the FTC Act.

What the FTC has done since May 2025

Three settlements show what the FTC looks for. In each, the complaint is an allegation, and the order takes effect once a court signs it.

Tickets with the fees held back

On 9 April 2026 the FTC announced that StubHub would pay $10 million in refunds. The complaint concerns the three days after the rule took effect, 12 to 14 May 2025, when NFL tickets went on sale before the schedule was released. On the first two pricing displays, the FTC said, the price left out mandatory fees and no total was shown. On the third, StubHub listed several fees but still gave no total. The Bureau of Consumer Protection’s director, Christopher Mufarrige, said: Price transparency is essential to a free and competitive marketplace.

A total that didn’t include the pre-ticked extras

On 2 July 2026 the travel app Hopper agreed to pay $35 million for refunds. Hopper advertised no hidden fees. The FTC alleged that Tip and VIP Support fees were pre-selected and shown on a screen users reached only by scrolling down, after the total price, so the total didn’t include them. For lodging bookings since 12 May 2025 the FTC applied the fees rule; for the rest, the FTC Act. Mufarrige again: Hopper deceived consumers by showing them a total price that did not include hidden, pre-selected fees.

A car price that wasn’t the car price

The fees rule doesn’t cover car dealers, so the Greenway Auto Group case on 8 October 2026 ran under the FTC Act alone. The FTC alleged that the group advertised vehicles at prices thousands of dollars below what it charged, then added administrative, dealer, delivery and processing fees. In over 92% of transactions, the complaint says, customers paid more than $3,350 above the advertised price. After a warning letter in March 2026, the group allegedly added price-transparency promises to its websites and kept advertising the same way. The order requires the advertised price to be the price a customer pays, with only government charges left out.

A fourth case is still in court. The FTC and seven states sued Live Nation and Ticketmaster in September 2025, alleging among other things that mandatory fees of up to 44% of the ticket price were held back until late in checkout.

Junk fee laws by state

There’s no federal law for most sectors, so the states have written their own. Which one reaches you depends on where your customers are.

California

SB 478 has applied since 1 July 2024. It’s in the Civil Code as a prohibited practice: advertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges, with only two things left out, government taxes and fees, and postage or carriage actually incurred to ship a physical good. The Attorney General’s reading is that it was written to prohibit drip pricing, and that it applies online and in store, to event tickets, short-term rentals, hotels and food delivery platforms among the rest.

Restaurants got a carve-out in 2024 and a condition with it. A mandatory charge on a food or drink item sold by a restaurant, bar, food concession or grocery store can sit outside the price, but it has to be clearly and conspicuously displayed, with an explanation of its purpose on any menu or display that shows the price. Third-party delivery platforms don’t get the carve-out. The section’s latest amendment took effect on 1 January 2026.

Minnesota

Minnesota’s law is in its deceptive trade practices statute, section 325D.44, and has applied since 1 January 2025. It’s a deceptive practice to advertise, display or offer a price for goods or services that does not include all mandatory fees or surcharges. A mandatory fee is one that must be paid, can’t reasonably be avoided, or that a reasonable person would expect to be included. Government taxes are outside it. Delivery platforms get their own line: show any extra fee when the customer picks a vendor or an item, and an itemised subtotal before checkout.

Massachusetts

The Attorney General’s regulations, 940 CMR 38.00, became enforceable on 2 September 2025. They ask for the total price whenever pricing information is presented to a consumer and prior to requiring a consumer to provide their personal information, the nature, purpose and amount of any charge, and a note of whether a charge is optional or waivable with instructions on how to avoid it. The total has to be the most prominent price. The same regulations cover trial offers and subscriptions, including cancelling as easily as you signed up.

Virginia

Virginia added a chapter on mandatory fees to its Code in 2025. Section 59.1-608 says a supplier may not advertise or display a price without clearly and conspicuously displaying the total price, which shall include all mandatory fees or surcharges. A business whose final price depends on the customer’s choices can comply by disclosing the factors that set the price and that the total may vary. Restaurants and hotels disclose the percentage of any automatic gratuity.

Colorado

HB25-1090 was signed on 21 April 2025 and applies from 1 January 2026. Anyone showing a price discloses the maximum total, with only government charges and shipping left out, and doesn’t misrepresent what a charge is for. Pricing information outside the total has to be labelled with its nature and purpose.

There are more. These five are the ones I read in full.

Why “convenience fee” is the label to watch

Most of the laws above have two halves. One is about where the fee appears. The other is about what you call it.

The FTC’s FAQ asks sellers to say what a fee is for and to drop vague names. Massachusetts asks for the nature and purpose of every charge. Colorado bars misrepresenting the nature or purpose of pricing information. A convenience fee for paying online, when online is the only way to pay, is part of the price, and the rules read it that way.

My test is one sentence long. If you can say what a fee pays for, and the customer could have avoided it, it can be a fee. Otherwise it belongs in the first number.

A five-minute check for your own checkout

If you’ve done the drip pricing check, this one is shorter. The labels and the pre-ticked boxes are the new part. Use your phone:

1. If your site changes with location, set it to a US state and open the first page that shows a price. Note the number.
2. Count the price lines between that page and the pay button. Any new line the customer can’t avoid should have been in the first number.
3. Read every fee label aloud. “Service fee”, “processing fee”, “convenience fee”: can you say in one sentence what each one pays for? If not, fold it into the price or rename it.
4. Look for anything ticked by default. An add-on that’s already selected and already in the total is the Hopper pattern. Start it unticked.
5. Compare sizes. Is the total price the biggest number on the page, or is the “from” price?
6. If you sell tickets or stays, the total goes everywhere a price appears: search results, listings and ads.
7. If your total depends on the customer’s choices, put the factors and a note that the total may vary next to the price, at the same size.

Peeky reads the public pages of your site. For prices that grow between the first screen and the last, the check is US-08 in the Handbook, with UK-14 for the UK’s version of the same rule and EU-12 for the EU’s urgency and scarcity checks.

Questions people ask

What are examples of junk fees?

A service fee on a concert ticket that appears on the payment page, a resort fee added after you pick your dates, a convenience fee for paying online when there's no other way to pay, and a pre-selected add-on sitting in the basket. The FTC's rule describes the pattern as bait-and-switch pricing and hidden fees.

What is the trade regulation rule on unfair or deceptive fees?

It's the FTC rule at 16 CFR Part 464, in force since 12 May 2025. Sellers of live-event tickets and short-term lodging have to show the total price, with all mandatory fees, more prominently than other pricing information. It doesn't ban any fee or set a limit on one.

Which junk fee laws by state apply to an online shop?

The ones where your customers are. California's law has applied since 1 July 2024 to most goods and services sold online or in person. Minnesota's applied from 1 January 2025, Massachusetts' regulations from 2 September 2025, Virginia's law was added in 2025 and Colorado's from 1 January 2026.

What are the Massachusetts junk fee regulations?

940 CMR 38.00, from the state Attorney General. From 2 September 2025 a business shows the total price whenever it shows a price and before asking for personal information, says what each fee is for, and marks optional fees as optional. The same rules cover trial offers and subscriptions.

Are convenience fees allowed?

A fee can exist. If it's unavoidable, the rules put it in the first price. The FTC's FAQ also asks sellers to say what a fee is for and to steer clear of vague labels like convenience fee or service fee, and Massachusetts asks for the nature and purpose of every charge.