California bans 'junk' fees on tickets, hotels, cruises, restaurant bills with new law
"The law is simple: the price you see is the price you pay."
A woman is sad after getting charged a huge junk fee.
Just about everyone has had the depressing experience of sitting through a long queue to get concert tickets, only to find when they were ready to check out, the price was 30 to 40% higher because of service fees added by the ticketing company.
People often have the same experience when ordering food through an app, only to see a massive service fee applied right before they're ready to place their order.
These service fees, known by many as “junk fees,” are popping up everywhere these days, from surprise resort fees charged when checking out of a hotel to a 4% surcharge on a dinner bill that the restaurant added so you can help pay for their employees' healthcare.
The good news for people in California is that a new bill will go into effect on July 1st that bans hidden or unexpected fees on everything from concert tickets to cruise packages. Senate Bill 478 (SB 478) makes it illegal for businesses to advertise or list a price for a good or service that does not include all required fees or charges other than certain government taxes and shipping costs.
California establishments have been relying on these junk fees for years. A new law passed this year will ban these fees, thank goodness.
— Travis (@mcsuggafree) March 4, 2024
https://t.co/sH6WcfFcRy https://t.co/2h78DlchMj
“Our price transparency law is about clear and honest communication with consumers so consumers can make the financial choices that are best for them and their families. This new guidance provides information for businesses across California to ensure that clear answers are available, particularly for small businesses,” California Attorney General Rob Bonta said in a statement. “The law is simple: the price you see is the price you pay. Laws work when everyone can comply. I am pleased that we can offer this guidance to help facilitate compliance with the law and make a more fair and level marketplace for businesses and consumers."
A 2023 survey of Americans found that 2 out of 3 said they were paying more in surprise charges now than they had five years earlier.
The bill is good news for consumers who want to make thoughtful decisions about how they spend their money, especially when inflation has made it a lot harder to stretch a dollar. However, the bill probably won’t make things any cheaper. Businesses most likely won’t stop charging these hidden fees; instead, they will be rolled into the listed price instead of popping up out of nowhere right before you hit the “pay now” button.
Not just hotels, airlines & Ticketmaster piling on junk fees.
— Janice Hough (@leftcoastbabe) May 22, 2024
Client had $112.61 Uber fare before tip today to LAX from hotel 20 miles away, reserved last night.
Look at breakdown: Over 1/2 cost ended up being fees.
Hope CA new "junk fee" law starting 7/1 applies to Uber too. pic.twitter.com/g5u9BZpQuU
State Senator Bill Dodd from Napa, the bill's co-author, stated its goals: “A consumer shouldn’t discover hidden fees made up by a business when they pay their bill.”
As the old saying goes, “As goes California, so goes the nation,” and when companies are forced to alter their pricing and marketing in America's most populous state, it’s bound to create changes for consumers across the country. The new law could be the first shot in a larger war against junk fees.
In 2023, President Biden called out Ticketmaster and others who charge "junk fees" in his State of the Union address, claiming he’ll get “rid of junk fees, those hidden fees at the end of your bill that are there without your knowledge.” In his 2022 State of the Union speech, Biden criticized the hotel industry for surprise fees at checkout. "We’ll ban surprise ‘resort fees’ that hotels tack on to your bill. These fees can cost you up to $90 a night at hotels that aren’t even resorts,” Biden said.
This Federal pressure led several companies, including Live Nation, SeatGeek, xBk, Airbnb, the Pablo Center at the Confluence, TickPick, DICE and the Newport Festivals Foundation, to make their pricing more transparent.