- Decide what counts as a mandatory fee under the FTC rule.
- Recognize price displays that could be considered deceptive or misleading.
- Judge when to show the higher all-in price to reduce legal and churn risk.
Ticketmaster became the most hated checkout screen in America. Fans saw concert tickets listed at $50, clicked “buy,” and watched the price climb past $85 as service fees, facility charges, and processing costs appeared one by one. Congressional hearings followed. So did public fury.
The same thing happened with short-term rentals. A listing on Airbnb showed $120 a night. Two screens later, a mandatory cleaning fee and a service fee pushed the real cost past $210. Travelers started sharing screenshots on social media, and the backlash spread fast. The FTC opened the door for public comment on the problem and received over 60,000 responses.
The result was the FTC’s Rule on Unfair or Deceptive Fees. It took effect May 12, 2025. Ticketmaster and Airbnb made headlines, but the rule does not care how big your company is. If you sell event tickets or short-term stays, you are covered.
The Milk Jug Test for Your Prices
Picture a gallon of milk at the grocery store. The sticker says $3.49. But when you get to the register, the cashier adds a mandatory $1.50 “refrigeration fee.” You never had the option to skip it. You just didn’t know about it until you were already committed. That is what the FTC now prohibits for tickets and lodging.
Under the rule, “total price” means the maximum amount a customer must pay. It excludes only three things: government taxes, shipping, and extras that are genuinely optional. Everything else that a customer cannot avoid must be folded into the number they see first.
The rule does not ban fees. Hiding them is what’s illegal.
You can still charge a cleaning fee, a booking fee, or a service fee. But the total price, with all those mandatory charges included, must appear more prominently than any lower number. That means bigger font, bolder weight, and visible without scrolling or hovering over a tooltip. If a customer has to dig to find the real cost, your price display has a problem.
Directly Covered vs. Next in Line
The rule draws a clear line around two industries. If your business falls inside that line, you are directly covered right now. If it falls outside, you are not off the hook. You are just in a different kind of risk.
Businesses directly covered by this rule include anyone who sells:
- Live-event tickets, whether you are a small venue, a concert promoter, a reseller, or a ticketing platform
- Short-term lodging, whether you run a hotel, a bed and breakfast, a vacation rental, or manage properties on a booking platform
The FTC defined “business” broadly. A solo Airbnb host with one listing and a 50-seat music venue both qualify.
Businesses NOT directly covered by this specific rule but still at risk include:
- Restaurants that add a mandatory service charge to every check
- SaaS companies with unavoidable platform fees on top of subscription prices
- Contractors who add booking fees or fuel surcharges after quoting a project
- Gyms that charge a “facility maintenance fee” on top of monthly dues
These businesses can still face enforcement under the FTC Act’s general prohibition on deceptive practices. And the FTC originally proposed a rule that covered all industries. It narrowed the scope to get bipartisan support, but the broader initiative is still active.
There is another layer, too. States are passing their own fee-transparency laws. The New York FAIR Act already imposes its own requirements, and more states are following. If you are not sure whether your state has new rules, it is worth setting up a system to track state-level regulatory changes before they catch you off guard.
If you run a coffee shop that adds a 3% card surcharge at the register, or a marketing agency that tacks on a “project management fee” after quoting, you are not covered by this specific rule. But you are playing the same game that got Ticketmaster hauled before Congress.
Three Pricing Traps You Might Be Running Right Now
The rule is easy to understand in theory. In practice, small operators violate it through checkout flows and fee labels they set up years ago and never questioned. Here are three patterns that now carry real consequences.
The listing that hides the real nightly cost. A vacation rental host lists a property on a booking platform at $140 per night. The mandatory $75 cleaning fee does not appear until the guest is two screens into the reservation flow, after they have already picked dates and entered personal information.
Under the rule, the first price a customer sees must include all mandatory charges. If the cleaning fee applies to every booking, it is not optional. For a three-night stay, the total mandatory cost is $140 times three, plus $75, which comes to $495. The per-night price shown in the listing should reflect that math, roughly $165 per night.
The fix is straightforward. Fold the cleaning fee into the nightly rate, or display the total booking cost (including the cleaning fee) as the primary number. Some platforms are already changing their interfaces to enforce this. If you list on third-party sites, check how they are displaying your price. You may need to adjust your fee structure on your end to match what the platform now requires.
The checkout screen that adds fees after the click. A small music venue advertises $25 tickets on its website. When a buyer reaches checkout, a $6 “facility fee” and a $3 “processing fee” appear. The real price is $34. Every buyer pays these charges. There is no way to opt out.
The venue owner may consider these fees standard in the industry. The rule does not care about industry norms. If the fees are mandatory, the advertised price should have been $34 from the start. If you run a venue or sell tickets, you may also want to look at how your POS labels charges like auto-gratuities and service fees, since misclassifying those charges creates its own set of problems.
The “optional” fee every guest pays. A B&B charges a $20-per-night “resort fee” that covers pool access and Wi-Fi. The fee is listed as optional on the booking page. But every single guest pays it, because opting out means losing internet access during their stay. If a customer cannot realistically skip the fee, it is mandatory, and it belongs in the total price. One sentence in the booking flow calling it “optional” does not make it so.
Violations of the rule can trigger civil penalties and consumer redress, meaning the FTC can fine you and require you to pay money back to customers. But even without FTC enforcement, surprise fees drive chargebacks, one-star reviews, and lost repeat business. The cost of hiding fees is already higher than most small operators realize.
Five Places to Check Before a Customer Complains
You do not need a lawyer or a compliance team to run this audit. Block an afternoon and check five places where your prices show up. For each one, ask a simple question: does a customer see the full mandatory cost the first time a number appears?
- Your website or booking page. The first price a customer sees should include every fee they cannot avoid. If a mandatory fee appears later in the flow, move it into the headline number.
- Third-party platform listings. Check how Airbnb, Eventbrite, or whatever platform you use is displaying your price. Some platforms are updating their own rules to comply, and their requirements may be stricter than the federal rule.
- Your POS or checkout screen. If fees appear after a customer has already decided to buy, those fees need to be baked into the price shown before the purchase decision.
- Phone and email quotes. When your staff quotes a price over the phone or in a reply, are they giving the all-in number or the base? Update scripts and templates if needed.
- Invoices and receipts. If a mandatory charge is broken out on the invoice in a way that makes it look like the customer chose it, the presentation is misleading even if the total is correct.
The Surprise That’s Killing Your Bookings
Many small operators resist all-in pricing because they believe a higher sticker price will scare customers away. The logic seems obvious. A listing at $140 per night gets more clicks than one at $165.
But clicks are not bookings. Surprise fees at checkout are the leading driver of cart abandonment in lodging and ticketing. The $140 listing gets attention. Then the customer sees the real cost two screens later and bails. Or worse, they complete the booking, feel tricked, and leave a review that warns everyone else.
Airbnb figured this out before the rule even took effect. In 2022 and 2023, the platform started showing total price (including cleaning and service fees) before checkout. The change came after hosts reported rising cancellation rates and negative reviews driven by fee shock. Showing the real number earlier reduced friction, not increased it.
The FTC estimates this rule will save consumers over 53 million hours per year. That is 53 million hours of frustration that was also costing businesses bookings, rebookings, and referrals.
You are not losing a pricing edge by showing the real number. You are removing the thing that was quietly killing your conversions.
This applies beyond tickets and lodging, too. If you are a contractor who quotes one price and adds mandatory fees later, the same psychology holds. People hate feeling tricked. The gotcha at the end costs you more referrals than the low quote ever earned you.
This Rule Covers Two Industries. Yours Might Be Next.
The rule is live, but it is not finished. There are real gaps the FTC has not addressed yet, and pretending they do not exist will not protect you.
- The FTC has not issued detailed FAQs on edge cases. What happens when a mandatory fee varies by date or party size? Until there is guidance, the safest move is to use the highest possible fee as your total price.
- Enforcement priorities for small operators are unclear. But a single customer complaint can trigger an investigation. Size is not a shield.
- Platforms may impose their own compliance rules that go further than the federal standard. If you list on a third-party site, their requirements may force changes the FTC rule alone would not.
Look at the timeline below. In 2022, the FTC launched a broad initiative against hidden fees across all industries. In 2023, it proposed a rule that would have covered every sector. In 2024, the final rule was narrowed to live-event tickets and short-term lodging to get bipartisan votes. In May 2025, the rule took effect. The pattern is clear: start broad, go narrow to pass it, then keep going.
The FTC is already looking at fee transparency on delivery platforms. States like New York are moving independently. If you want to stay ahead of state-level changes before they hit, now is the time to set that up.
The direction is obvious for any business that relies on mandatory add-on fees. The question is not whether transparent pricing will be required in your industry. It is when.
If you run a gym with a mandatory “facility maintenance fee” on top of monthly dues, or a landscaping company that adds a “fuel surcharge” after quoting, you are in the next wave. Fix your pricing now, while the fix is a choice and not a penalty.
