This lesson explains compliance obligations for marketers. It is not legal advice. Talk to a lawyer before you redesign checkout, pricing pages, or subscription flows.
The gap between the price you see and the price you pay
Drip pricing is advertising a price that leaves out mandatory fees, then revealing them one step at a time as the customer moves through checkout. A hotel room "from $99" that becomes $142 after a resort fee, a destination fee, and a "service charge" is the textbook example.
These charges are often called junk fees: mandatory costs baked into the real transaction but excluded from the advertised price, so the number a shopper compares against competitors is never the number they actually pay.
The FTC has treated this as a form of deceptive advertising for years under general Section 5 authority, but enforcement was inconsistent and case-by-case. That changed with a dedicated rule.
The rule that actually has teeth now
On December 17, 2024, the FTC finalized its Rule on Unfair or Deceptive Fees, targeting live-event ticketing and short-term lodging specifically. It took effect May 12, 2025.
The rule requires two things from covered businesses:
- Total price, prominently displayed. Any price shown to a consumer for a hotel room, vacation rental, or event ticket must include all mandatory fees, and that total has to be presented more prominently than any other pricing figure on the page.
- No fee misrepresentation. Businesses can't mislabel what a fee is for, or claim a charge is optional when it's actually required to complete the purchase.
Notably, the rule doesn't cap fees or ban them outright, a company can still charge a $40 "resort fee." It just has to be baked into the number the customer sees first, not sprung on them at the final screen.
The FTC estimated the rule would save consumers up to 53 million hours per year previously spent hunting for the real total price, worth more than $11 billion over the following decade.
If your pricing page, cart, or ticketing widget still shows a base price and adds mandatory charges later in the flow, this rule almost certainly applies to you.
What tripped up the companion rule
The FTC also tried to overhaul subscription cancellation with a "click-to-cancel" rule, formally the amended Negative Option Rule, requiring that canceling a subscription be as easy as signing up for one. No more "call this number during business hours" cancellation mazes.
That rule didn't survive. On July 8, 2025, the Eighth Circuit Court of Appeals vacated it entirely, just days before its revised July 14, 2025 compliance deadline. The court's reasoning was procedural, not substantive: it found the FTC skipped a required preliminary regulatory analysis, mandatory whenever a rule's compliance costs are projected above $100 million.
Vacatur on procedural grounds doesn't mean subscription traps are legal again. Companies with hard-to-cancel flows are still exposed under the Restore Online Shoppers' Confidence Act (ROSCA), general Section 5 unfairness authority, and a growing list of state autorenewal laws that were written independently of the federal rule.
The FTC has signaled it intends to revisit rulemaking with the proper procedural steps this time, so treat this as a pause, not a green light. Building an easy-cancel flow now is cheaper than retrofitting one under a future deadline.
What to actually change in your checkout
Whether or not your category is directly covered by the ticketing/lodging rule, the direction of travel is unmistakable: state attorneys general, the FTC, and now several states have their own all-in pricing laws. Build toward the strictest standard rather than the narrowest one that technically applies to you today.
- Show the full total on the first price a shopper sees, not just at checkout. If your product has a mandatory fee, it's part of the price, not an add-on.
- Label fees honestly. "Service fee" for something that funds general overhead, not the specific service implied, invites a deception claim.
- Make cancellation match signup. If someone can subscribe in two clicks online, they should be able to cancel in two clicks online, don't force a phone call.
- Audit third-party checkout widgets. Ticketing and booking plugins you didn't build can still make your site the one holding non-compliant pricing.
Fee transparency used to be a nice-to-have differentiator. Now it's baseline legal exposure for any business selling hotel rooms, tickets, or subscriptions online.