California’s New Price Transparency Law May Reshape Pricing Practices in Broad Range of Industries
Effective July 1, 2024 , new California Senate Bill 478 (SB 478)[1] bans the practice of “drip pricing,” where the price for product or service is advertised without including all mandatory fees and charges that consumers must pay. [2] This law applies to nearly all businesses that sell or lease goods and services to California consumers[3], excluding only commercial transactions and certain industries that are already subject to pricing regulations. The ramifications of SB 478 are likely to significantly impact advertising and pricing practices across various industries, including businesses outside of California. SB 478 aims to eliminate hidden fees, often referred to as “junk fees,” by making it illegal to advertise, display, or offer a price that does not reflect the full amount consumers must pay, excluding taxes and shipping costs. [4] According to the California Attorney General’s Office, the law prohibits businesses from advertising “an artificially low headline price” to ...