Drip pricing, the practice of advertising a low initial price and adding mandatory fees during checkout, is now restricted under a federal rule that covers live-event tickets and short-term lodging. The Trade Regulation Rule on Unfair or Deceptive Fees requires upfront disclosure of total price, and states including California and Minnesota have passed their own all-in pricing laws. Enforcement actions are already recovering money for consumers.
TL;DR:
- Mandatory resort and service fees, including taxes and automatic charges, must be included in the total price shown upfront under federal and many state laws.
- Businesses can legally exclude government taxes, shipping costs, and optional add-ons if these are truly voluntary and clearly disclosed before payment.
- Enforcement actions, such as the $35 million settlement with Hopper, highlight regulators’ focus on hidden fees added during checkout rather than upfront disclosures.
- State laws like California’s SB-478 and Minnesota’s all-in pricing law often require full price disclosure across more sectors than the federal rule covers.
- Consumers should document all price screens and fees during the purchase process to support claims of deceptive pricing or violations.
Table of Contents
- The FTC rule: scope, core requirements, and effective dates
- State laws and the patchwork: California, Minnesota, and pending proposals
- How enforcement is playing out: FTC cases and settlements to watch
- What legally counts as drip pricing and which fees must be included
- Consumer options and legal remedies: evidence, complaint channels, and likely outcomes
- Our experience with deceptive pricing and consumer class claims
- Why most drip pricing advice misses the point
- How we can help with hidden fee and drip pricing claims
- FAQ
- Sources
The FTC rule: scope, core requirements, and effective dates
The federal rule lives at 16 C.F.R. Part 464, and it targets two specific industries: live-event ticket sales and short-term lodging (hotels, vacation rentals, and similar bookings). Within those categories, the rule requires sellers to display the total price, including most mandatory fees, as prominently as the headline price, and it bars misrepresenting what a fee covers or whether it can be refunded.
The FTC’s compliance guidance spells out what counts toward that total and what can sit outside it:
- Taxes and government-imposed charges can be excluded from the headline total but must still be disclosed before payment.
- Shipping costs for a physical good can be shown separately rather than folded into the advertised price.
- Optional ancillary fees, like a voluntary gratuity or a trip-insurance add-on the buyer affirmatively chooses, can also be broken out.
- Everything else a buyer cannot avoid, including service fees, resort fees, and processing charges, must be baked into the price shown up front.
The rule is built around one core idea: the first price a consumer sees should be the price they actually pay, minus taxes and truly optional extras. That standard, drawn directly from the FTC’s final rule text, is what separates lawful tiered pricing from unlawful drip pricing.
The FTC announced the rule in December 2024, framing it as a bipartisan response to bait-and-switch pricing in ticketing and lodging. Businesses outside those two sectors are not off the hook, though: the FTC continues to police hidden fees in other industries under its general Section 5 authority against unfair or deceptive practices, and several state laws fill gaps the federal rule does not reach.
State laws and the patchwork: California, Minnesota, and pending proposals
While the federal rule covers two industries nationally, several states have gone broader, as explained in this Insider: Timing traps that change California lemon law attorney fees article that highlights state-specific consumer protection nuances. California’s SB-478, often called the Honest Pricing Law, generally requires businesses to display the total price of goods and services, with limited exceptions for taxes and government fees, across far more sectors than tickets and hotel rooms. Minnesota has adopted its own all-in pricing requirement, folding mandatory fees into the sticker price consumers see before they commit to a purchase.
A few points matter for anyone trying to figure out which law applies to a given transaction:
- Federal and state rules generally operate side by side rather than canceling each other out, so a business in California or Minnesota may need to satisfy both the FTC rule and the relevant state statute.
- State law tends to matter most outside live-event ticketing and short-term lodging, since those are the only categories the federal rule reaches directly.
- Other states have introduced similar all-in pricing bills, and the trend line points toward more states adopting comparable disclosure requirements rather than fewer.
For readers in California specifically, our explainer on the state’s pricing rule walks through how state-level remedies can apply even when a federal claim is not available.
How enforcement is playing out: FTC cases and settlements to watch
Recent cases show what regulators actually chase down once a company is on their radar. In July 2026, the FTC secured a $35 million settlement with Hopper, a travel booking app accused of charging consumers hidden fees without adequate consent or disclosure. That settlement included consumer redress and injunctive terms requiring clearer disclosure going forward.
A settlement involving a substantial monetary amount against a single travel app shows regulators are willing to pursue significant monetary relief, not just orders to change future conduct, when a company’s fee disclosures fall short of what the FTC’s settlement announcement describes as adequate.
Enforcement patterns tend to cluster around a few recurring failures:
- Mandatory fees left out of the first price a shopper sees, then added later in the checkout flow.
- Optional charges pre-selected by default so the buyer has to notice and uncheck them.
- Fee disclosures buried behind a scroll, a tooltip, or a separate page instead of displayed next to the price itself.
Regulators building these cases tend to rely on the full purchase sequence, not just the landing page, so they look at screenshots of every screen a buyer encounters between the first price and the final charge.
What legally counts as drip pricing and which fees must be included
Drip pricing, in regulatory terms, is advertising an incomplete price and then revealing additional mandatory charges as the purchase progresses. Bait-and-switch pricing is a close cousin: advertising one price with the intent, or practical effect, of pulling the buyer toward a higher one. The line between a lawful fee structure and an unlawful one comes down to whether a charge is truly avoidable.
- Resort fees charged by nearly every guest at a hotel count as mandatory and must be included in the total price shown upfront.
- Ticket service fees added automatically during checkout for a concert or sporting event fall under the same requirement.
- Auto-added gratuities or service charges that a buyer cannot decline are treated as mandatory, even when labeled “optional” on the receipt.
- Government taxes and shipping charges are the narrow categories permitted to sit outside the advertised total, so long as they are disclosed before payment.
- Genuinely optional add-ons, like travel insurance a buyer has to affirmatively select, can also be broken out separately.
The disclosure standard is consistent across these examples: if a typical buyer cannot complete the purchase without paying it, it belongs in the price they see first.
Consumer options and legal remedies: evidence, complaint channels, and likely outcomes
If a fee surprised you during checkout and you think it violated disclosure rules, documentation is the first priority. Save a screenshot of every screen in the purchase flow, including the initial price display, any point where a fee was added, and the final receipt. Timestamp these if your device allows it, and keep the confirmation email alongside your credit card statement showing the actual charge.
From there, several complaint channels are available:
- File a complaint with the FTC directly, since the agency accepts consumer reports tied to drip pricing and uses them to build enforcement cases.
- Contact your state attorney general’s office, particularly if you live in a state with its own all-in pricing law like California or Minnesota.
- Use any agency-specific complaint form tied to the industry involved, such as a travel or ticketing regulator.
Pro Tip: Keep every screenshot and receipt in one dated folder as soon as you notice the discrepancy, before the booking page or app update erases the version you saw at checkout.
Outcomes vary by case. Individual complaints can lead to refunds or account credits, while FTC enforcement tends to produce broader redress funds and injunctive terms requiring a company to fix its disclosure practices. When a pattern affects many consumers the same way, a class action can aggregate smaller individual losses into a case worth pursuing, a route our consumer class action practice handles directly.
Our experience with deceptive pricing and consumer class claims
Our consumer protection practice focuses on cases involving drip pricing and hidden-fee disputes that affect groups of consumers rather than one person at a time. When we evaluate a potential claim, the documentation described above (screenshots, receipts, and dated records of what a buyer saw at each step) is exactly what helps us assess whether a pattern of mandatory fees was disclosed the way the law requires. Most of our consumer class action work proceeds on a contingency basis, so clients pay nothing unless there is a recovery.
Why most drip pricing advice misses the point
The conventional advice on hidden fees focuses almost entirely on reading the fine print before you buy, and that is backwards. The FTC’s own enforcement record, from the Hopper settlement to the StubHub refunds, shows that the burden belongs on the seller to disclose a complete price, not on the buyer to hunt for the real one across five screens.
What gets underestimated is how much the federal rule’s narrow scope matters. It only reaches live-event tickets and short-term lodging, so a hidden fee from a gym membership, a subscription service, or a car rental falls back on state law or the FTC’s general unfairness authority, which is a slower, case-by-case process. Readers outside those two covered industries should not assume the new rule protects them automatically.
If you take one thing from this, prioritize the paper trail over the complaint. Regulators and courts move on evidence, and a dated screenshot from the moment you saw a misleading price is worth more than a strongly worded message to customer service sent weeks later.
— Mark
How we can help with hidden fee and drip pricing claims
If a company added fees it never disclosed upfront, you may have a claim worth pursuing, whether on your own or as part of a group of affected consumers. We handle consumer class actions involving deceptive pricing and hidden fees, and most of these cases move forward on contingency, so you owe nothing unless we win.
Save your screenshots, receipts, and any confirmation emails, then reach out through our consumer class action practice page for a free case evaluation.
This article is general information, not a substitute for advice from a qualified lawyer. Consult a qualified legal professional about your own circumstances before acting on anything here.
FAQ
What is drip pricing and how does it differ from normal discounting?
Drip pricing is advertising an incomplete price and adding mandatory charges as the buyer moves through checkout, which differs from a legitimate discount or optional add-on that the buyer can decline. Under the FTC’s rule, the test is whether a typical buyer could avoid the charge, not whether it was technically disclosed somewhere on the page.
Does the US have laws against price gouging?
Price gouging laws exist mainly at the state level and typically apply during declared emergencies, which is a separate issue from drip pricing’s hidden-fee problem. Drip pricing is addressed instead through the FTC’s Trade Regulation Rule and state all-in pricing statutes like California’s SB-478.
What is an example of deceptive pricing?
A hotel advertising a nightly rate that excludes a mandatory resort fee, revealed only at checkout, is a textbook example the FTC has targeted in its rulemaking. A concert ticket listed at one price that climbs once service and processing fees appear during purchase works the same way.
Can consumers recover money through a lawsuit over hidden fees?
Yes, consumers can pursue individual claims or, when the same fee practice affected many buyers, join or bring a class action seeking refunds and other remedies. Recent FTC settlements, including the $35 million Hopper resolution, show regulators securing monetary redress for affected consumers, and private litigation can run alongside government enforcement.
Which fees are businesses allowed to leave out of the advertised price?
Businesses can generally exclude government taxes, shipping charges, and genuinely optional add-ons the buyer affirmatively selects, according to the FTC’s compliance guidance. Every other mandatory charge, including resort fees and automatic service fees, has to be part of the total price shown before checkout begins.