California's Hidden Fee Law (SB 478): Your Rights When Companies Add Surprise Charges
You have probably felt it. A price looks fine while you are shopping, and then — at checkout — the total climbs. A "service fee." A "processing fee." A mandatory surcharge that was never part of the number you first saw. For years, that was simply how a lot of online checkouts worked. In California, it is not supposed to work that way anymore.
This is a plain-English guide to California's Hidden Fee Law: what it requires, what counts as an illegal fee, where the exceptions are, and what your rights are if a business charged you a surprise fee.
What is California's Hidden Fee Law (SB 478)?
California's Hidden Fee Law is formally called the Honest Pricing Law — you will also see it called the Hidden Fees Statute — and it began as a bill known as SB 478. It took effect on July 1, 2024. (And even before 2024, California law prohibited hidden mandatory fees because they constitute an unlawful bait-and-switch scheme.)
The Honest Pricing Law works by adding to one of California's main consumer-protection statutes, the Consumers Legal Remedies Act (usually shortened to the CLRA). The new rule is found at California Civil Code section 1770(a)(29).
The core idea is short: the price a business shows you should be the price you actually pay.
What does the law actually require?
When a business advertises, displays, or offers a price for a product or service, that price generally has to include all mandatory fees and charges. There are only two narrow exceptions: taxes and fees the government imposes on the sale (like sales tax), and reasonable shipping costs to send you a physical item.
Everything else that is required generally belongs in the advertised price. That includes handling charges — the law lets a business list shipping separately, but a mandatory handling fee has to be built into the price.
The California Attorney General's official guidance is direct on two points in particular. First, a business cannot fix the problem just by disclosing the extra fee somewhere before you finish checking out; the advertised price itself has to be the full price. Second, a business cannot advertise one price and then add a variable "service fee" later in the transaction. You can read the Attorney General's plain-language FAQ.
What counts as a "hidden fee" or "junk fee"?
The shorthand for this practice is "junk fees," and the way they usually appear is called drip pricing — the full cost is revealed to you drip by drip as you move toward payment, instead of all at once up front.
In practice, the fees people run into go by many names: "service fees," "processing fees," "convenience fees," "vendor fees," and assorted mandatory surcharges. What matters under the law is not the label — it is whether the fee is mandatory (you cannot avoid it) and whether it was left out of the advertised price. If a charge is required and it was not in the price you first saw, it is the kind of fee the law targets.
A few things are not covered. Fees for genuinely optional add-ons—gift wrap, an upgrade you choose, expedited shipping—do not have to be in the base price. Voluntary tips are not affected. And credit-card surcharges are a special case: a card fee generally is not "mandatory" if you could avoid it by paying another way, but if a business accepts only credit cards, then the fee is mandatory and has to be included in the price.
Are there exceptions to the law?
A few. The law applies to goods and services bought for personal use, so purely commercial, business-to-business purchases are not covered.
There is also a restaurant and food exception, added by a follow-up law called SB 1524. Mandatory fees on individual food or beverage items sold directly by restaurants, bars, food concessions, grocery stores, and certain grocery delivery services are exempt—but only as long as the fee is clearly and conspicuously displayed wherever the price is shown. Importantly, that exception does not cover third-party food delivery platforms. A separate companion law addresses hotels and other short-term lodging, requiring all-in pricing there as well.
What are your rights if a business charged you a hidden fee?
Because the Hidden Fee Law is part of the CLRA, the CLRA's remedies apply. Under California Civil Code section 1780, a consumer harmed by a practice the law forbids can go to court to recover their actual damages (generally, the money they were improperly charged), obtain a court order stopping the practice, get restitution, and, in appropriate cases, recover punitive damages and any other relief the court deems proper.
California law also helps make these cases practical to bring. If you prevail, the law generally requires the business to pay your attorneys' fees and court costs—so you do not have to fund the fight out of pocket.
And if you bring the case as a class action, you may be able to recover a class action service/incentive award of $7,500 or more.
The same conduct can also violate two other major California laws—the Unfair Competition Law and the False Advertising Law — which is why these claims are often brought together.
None of this is a promise about any particular outcome—every situation turns on its own facts.
What you can do now
If a business charged you a surprise fee, a few steps help. Keep your receipts and order confirmations; a screenshot of the checkout screen showing the added fee is especially useful. You can also report the practice to the California Attorney General.
And if you would like to know whether you have a claim, you can talk to a consumer-protection lawyer. Our firm is currently investigating service fees added by various websites:
ReserveBar, the online wine-and-spirits seller. If you were charged a "service fee" on a ReserveBar order, please complete this form.