The FTC Junk Fees Rule and Your Business

The rule, sometimes referred to as the “Junk Fees Rule,” specifies that businesses in specific industries must clearly disclose the total price including all mandatory fees. As of 2025, the rule applies to businesses selling tickets to live events and short-term lodging businesses, such as hotels, inns, vacation rentals, and bed & breakfasts.

What is the Rule on Unfair or Deceptive Fees?

The FTC’s Rule on Unfair or Deceptive Fees is relatively straightforward. It requires that covered businesses (that is, businesses selling tickets to live events and short-term lodging companies) disclose the total price upfront. For example, if a business includes pricing information in an ad or newsletter, it must list the total price in that ad or newsletter, inclusive of all fees the business intends to charge. That includes any service fees or convenience fees.

However, some fees don’t need to be included and can be disclosed later, such as mandatory government taxes, shipping charges, and optional services that people might choose to purchase (such as late checkout at a hotel.) As long as these fees are disclosed before the payment page or invoice, they can be excluded from the “upfront final price” that must be disclosed.

Additionally, the total price must be displayed prominently. Specifically, it must be displayed more prominently than other pricing information. So if your business has an ad with a large starburst showing pricing, that price must be the total price.

Another requirement is that businesses are required to be truthful and clear about additional fees. That also includes avoiding vague phrases like “service fees.” Additionally, the fees disclosed must be accurate in amount and/or usage. For example, a business cannot list “state taxes” and inflate the amount beyond the mandatory state taxes. While state taxes are a legitimate charge to add, the amount must be the actual state tax amount, not a padded amount where the business takes a portion of it. A business could also not list an “environmental conservation fee” if it doesn’t use that money toward environmental / conservation efforts.

It’s worth noting that the Rule is what’s known as a “disclosure rule.” That means it regulates how prices must be displayed, but not the amount that may be charged or what kinds of fees a business can add. It does not ban specific types of fees.

Background of the Junk Fees Rule

The initial proposed rule would have applied to more types of businesses, including restaurants and car rental companies. However, the final rule specifically and solely applies to live event ticket sales and short-term lodging. The FTC claimed that “bait-and-switch” pricing and misleading fees are common throughout various industries, but narrowed the final rule to decrease the likelihood of it being rejected by commissioners.

That’s not to say that it will stay that way indefinitely. In the future, the rule could potentially apply to other industries.

Violations of the Junk Fees Rule

If a business is found to violate the FTC’s Junk Fees Rule (or any FTC rule for that matter) it can be ordered to bring their business practices into compliance with the rule, refund money back to customers, and/or pay fines.

Will other industries get similar rules?

It’s possible. Some experts believe the rule signals a shift toward more transparency for consumers. Even with merchant accounts, there are undisclosed or buried fees and service charges that resemble the type of “junk” fees this FTC rule is targeting. But again, as of now, the rule only applies to ticket sales and lodging businesses.

Other Rules and Laws Still Apply

Even if you’re not selling tickets to events or offering lodging, there are still rules and laws that regulate disclosing fees to customers. For example, if you are in a state where it’s legal to surcharge credit card transactions, there are still requirements from Visa and Mastercard on how much you can surcharge and how you inform your customers.

Bottom line, if you’re adding any charges at the register other than mandatory sales taxes, it’s a good idea to make sure it’s clear to customers before they get to the register.

Cash Discounting

There are already examples of this type of required disclosure outside of the businesses affected by the new FTC rule. Cash discounting is one of them. As businesses look for ways to defray the costs of credit card processing, the concept of cash discounting has gained popularity. However, some businesses implement it in a way that is against card brand rules.

With cash discounting, you’ll need to post credit card prices and offer a discount on that price at the register. If you post a cash price and then charge more at the register for customers that use a card, you’re actually implementing a credit card surcharge. That’s the kind of fee that the FTC rule is trying to make clearer before getting to the register.

While the FTC rule doesn’t apply to many businesses, state laws about cash discounting / surcharges and Visa and Mastercard’s rules do apply.

Preparing Now

Even if you’re not in ticket sales or lodging, it’s a good idea to practice pricing transparency. It helps to stay on the right side of shifting regulations and it’s just good business. You’ll increase customer trust and avoid possible loss of sales due to customers feeling tricked.

To ensure pricing transparency, consider these guidelines:

• Always show the customer’s total price
• If you offer a cash discount, be sure to post credit prices and discount that price at the register
• If you surcharge credit card transactions, be sure to clearly and prominently display details about the surcharge
• When adding convenience fees, be sure you meet card-brand rules for convenience fees. Label or communicate the purpose of the fee clearly before the customer goes to pay.
• Offer line-item invoices and receipts so customers can see each fee that went into their total

The 2025 FTC Rule on Unfair or Deceptive Fees currently only applies to specific industries, but the underlying principles of transparency and consumer fairness can help bring higher customer satisfaction and are worth implementing regardless of whether it’s required. For many years, CardFellow has pushed for clarity and transparency in credit card processing. Disclosing pricing to customers helps provide a level playing field and fair competition.