‘Junk’ fees on tickets, hotel, cruise, and restaurant bills are banned by new law in California

Most people have had the unpleasant experience of waiting in line for a while to purchase concert tickets, only to discover that the price had increased by 30% to 40% due to additional costs imposed by the ticketing business when it came time to check out.

The same thing frequently happens to people who use apps to get takeout: just as they’re about to finish their order, they discover a hefty service charge has been added.

These service charges, which are also referred to as “junk fees,” are becoming more and more common. Examples include 4% surcharges added to restaurant bills to cover the cost of the staff’ healthcare and unexpected resort costs that are assessed when guests check out of a hotel.

The good news for Californians is that a new law prohibiting unanticipated or hidden costs on everything from concert tickets to cruise packages will take effect on July 1. Businesses are prohibited under Senate Bill 478 (SB 478) from advertising or listing a price for a good or service that does not include all necessary fees or charges, with the exception of a few government taxes and shipping expenses.

“The goal of our price transparency law is to empower consumers to make the best financial decisions for themselves and their families by providing them with transparent and honest information.” Attorney General Rob Bonta of California said in a statement that “this new guidance provides information for businesses across California to ensure that clear answers are available, particularly for small businesses.”

“The law is straightforward: you pay the price you perceive. When everyone can follow the law, it works. I’m happy that we can provide this advice to make it easier for people to follow the law and provide a more level playing field for both consumers and companies.”

According to a 2023 American survey, two out of every three respondents claimed they were currently spending more in unexpected fees than they had five years prior.

Now that inflation has made it far more difficult to stretch a dollar, the law is good news for customers who want to spend their money wisely. Still, it’s unlikely that the law will result in any price reductions. Companies won’t stop charging these extra fees, but rather will incorporate them into the quoted price rather than having them appear out of the blue just before you click the “pay now” button.

The co-author of the bill, Napa state senator Bill Dodd, outlined its objectives as follows: “A consumer shouldn’t discover hidden fees made up by a business when they pay their bill.”

According to the proverb “As goes California, so goes the nation,” businesses that are compelled to modify their marketing and pricing strategies in the most populous state in the union will inevitably cause adjustments for customers throughout the nation. The new law might be the start of a bigger campaign to eradicate garbage fees.

In his State of the Union speech in 2023, President Biden criticized Ticketmaster and other companies that impose “junk fees,” promising to “get rid of junk fees, those hidden fees at the end of your bill that are there without your knowledge.” In his State of the Union address in 2022, Biden chastised the hotel sector for unexpected charges at check-out. “Surprise’resort fees’ that hotels add to your bill will be outlawed. At hotels that aren’t even resorts, these fees can run you as much as $90 per night,” stated Biden.

Numerous businesses were forced to increase the transparency of their pricing by this federal pressure, including Live Nation, SeatGeek, xBk, Airbnb, the Pablo Center at the Confluence, TickPick, DICE, and the Newport Festivals Foundation.