Overview
California's "Honest Pricing Law" (SB 478) became effective July 1, 2024. The legislation requires businesses to display prices that include all mandatory fees and charges, with limited exceptions for government taxes and reasonable shipping costs.
Key Purpose
The law targets "drip pricing" practices where advertised prices don't reflect what consumers ultimately pay. The price a Californian sees should be the price they pay.
What Must Be Included in Advertised Prices
Mandatory charges that cannot be excluded include:
- Security fees
- Rent-related charges passed to consumers
- Employee benefit costs (healthcare mandates)
- Handling charges
- Equipment rental late fees contingent on consumer behavior require disclosure only if mandatory
Permitted Exclusions
Businesses may exclude from advertised prices:
- Government-imposed taxes and fees
- Reasonable shipping costs for physical goods
- Optional service or feature charges
- Voluntary tips and gratuities
Compliance Guidance
The law permits businesses to:
- Itemize fee components after displaying the full price
- Advertise discounts without listing specific prices
- Offer prices lower than advertised amounts
The law prohibits:
- Listing a price with separate percentage fees added later
- Disclosing additional mandatory fees only at checkout
- Advertising prices lower than actual consumer costs
For auto repair shops implementing dual pricing, this means ensuring your advertised card price includes all fees upfront, with the cash price shown as a discount option.
Need help staying compliant with California's pricing law? Our compliant dual pricing solution displays both card and cash prices transparently. Learn more about our compliance resources for auto repair shops.