California’s advertised price law requires that any price a business shows a consumer include every mandatory fee, rest on an honest reference point if it claims to be a discount, match goods the business actually intends to sell, and clearly spell out the terms of any subscription that will renew. Violations carry civil penalties of up to $2,500 each under the Unfair Competition Law and misdemeanor exposure under the False Advertising Law, and the Attorney General, local prosecutors, and individual consumers can all sue.
All-In Pricing: Mandatory Fees Must Be Included
Since July 1, 2024, it has been unlawful in California to advertise, display, or offer a price that leaves out any mandatory fee or charge. Civil Code Section 1770(a)(29), enacted by SB 478, bans the practice commonly called “drip pricing,” where a low headline price balloons at checkout with service charges, processing fees, or resort fees.1California Department of Justice. SB 478 – Hidden Fees The only amounts a business may exclude from the advertised number are government-imposed taxes and fees, and reasonable shipping costs for physical goods.2California Legislative Information. California Code Civil Code 1770
The practical rule is simple. If the customer cannot avoid the charge, it has to be baked into the price they first see. Labeling a fee “optional” does not help when the customer has no realistic way to decline it. Hotels, ticket sellers, event venues, and online retailers were the clearest targets of the law, and the Attorney General’s office has identified hidden-fee compliance as a priority enforcement area.
Sale Prices and “Former Price” Claims
Advertising something as a sale, a discount, or a markdown requires a real reference point. Business and Professions Code Section 17501 says that any price advertised as a “former price” must have been the prevailing market price within the three months immediately before the ad ran. If the former price is older than that, the business has to clearly and conspicuously state the exact date the price was in effect.3California Legislative Information. California Code BPC 17501
“Prevailing market price” means the actual retail price at which the item was offered in that locality. It is not the manufacturer’s suggested retail price, and it is not an internal reference number pulled from a spreadsheet. A product that was never actually sold at the “original” figure is being advertised with a fictitious discount.
In People v. Overstock.com, Inc. (2017), a court found that Overstock displayed inflated “List Price” and “Compare at” figures next to its selling prices to make its discounts look steeper than they were. The trial court imposed $6.8 million in civil penalties for violations of both the False Advertising Law and the Unfair Competition Law.4Justia Law. People v. Overstock.Com, Inc. Swapping the label from “former price” to “list price” or “compare at” does not insulate a business if the comparison itself misleads.
Federal rules point the same direction. The FTC’s Guides Against Deceptive Pricing require any former price used in a comparison to be a “bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time,” rather than a figure set up solely to make a later discount look larger.5eCFR. 16 CFR 233.1 – Former Price Comparisons A California retailer has to satisfy both standards.
Bait-and-Switch Advertising
Business and Professions Code Section 17500 makes it unlawful to advertise goods or services “as part of a plan or scheme with the intent not to sell” them at the advertised price.6California Legislative Information. California Code BPC 17500 The Consumers Legal Remedies Act parallels this ban and adds that advertising goods without disclosing a quantity limit, when the business cannot supply reasonably expectable demand, is itself unlawful.2California Legislative Information. California Code Civil Code 1770
Two patterns draw enforcement attention. One is the classic switch: a store advertises a low price on an item, then tells arriving customers it is out of stock while steering them to a more expensive alternative. The other is common in auto repair and home improvement, where a business advertises a low diagnostic or inspection fee and then insists on substantial additional work before releasing the car or finishing the job.
Intent is the hinge. A sale item that genuinely sells out on day one is not automatic proof of a violation. A business that routinely advertises deals it never stocks in meaningful quantity is a different matter. Disclosing a quantity limit or “while supplies last” helps only if the business actually stocked a reasonable quantity to begin with.
Subscription and Automatic Renewal Pricing
California’s Automatic Renewal Law, at Business and Professions Code Sections 17600 through 17606, governs any price that recurs. Gym memberships, streaming services, meal kits, and monthly supply boxes all fall within it.
Before the consumer buys, the business must clearly and conspicuously disclose that the subscription continues until the consumer cancels, how to cancel, the amount of each recurring charge and whether it may change, and any minimum purchase obligation. “Clear and conspicuous” has a statutory meaning: larger type than the surrounding text, contrasting type or color, or set off by symbols that draw attention.7California Legislative Information. California Code BPC 17600-17606 – Automatic Renewal Law Fine print buried in a terms-of-service wall does not meet the standard.
The business also has to get the consumer’s affirmative consent to the renewal terms before charging, and keep proof of that consent for at least three years, or one year after the contract ends, whichever is longer.
Cancellation is where most companies get caught. California requires a toll-free phone number, an email address, or another mechanism that lets the consumer cancel without unnecessary friction. One-click signup paired with a multi-step phone maze for cancellation is exactly the asymmetry regulators are looking for.
Penalties for Getting It Wrong
Pricing violations run on two penalty tracks, and the same conduct can trigger both at once.
Civil Penalties
The Unfair Competition Law allows civil penalties of up to $2,500 per violation.8California Legislative Information. California Code Business and Professions Code 17206 Each deceptive advertisement or transaction can count as its own violation, which is why a misleading promotion run across hundreds of stores or millions of web impressions can produce penalty exposure in the thousands or hundreds of thousands. Courts weigh the seriousness of the misconduct, the number of violations, how long the conduct lasted, and the defendant’s willfulness.
Criminal Penalties
A violation of Section 17500 is a misdemeanor, carrying up to six months in county jail, a fine of up to $2,500, or both.6California Legislative Information. California Code BPC 17500 Criminal prosecution requires showing the business knew, or with reasonable care should have known, that the advertising was untrue or misleading. In practice, prosecutors reserve criminal charges for individual bad actors and repeat offenders; large companies more often face the civil route.
Injunctions
Courts can also order a business to stop the practice and change how it advertises. Under Section 17535, a court may enter whatever relief is necessary to prevent continued violations.9California Legislative Information. California Code Business and Professions Code 17535 Injunctions commonly require revised advertising practices and ongoing compliance monitoring. Violating one carries contempt consequences that typically dwarf the original fine.
Who Can Sue
The Attorney General, district attorneys, county counsel, and city attorneys in cities over 750,000 can all bring civil actions and seek the same per-violation penalties. The California Supreme Court has confirmed that a district attorney can obtain relief covering a company’s statewide operations, so a single county prosecutor can produce a statewide injunction.
If You’ve Been Overcharged: Consumer Remedies
Government enforcement is not the only route. Two statutes let individual consumers sue.
Under the Unfair Competition Law and the False Advertising Law, a court can order restitution requiring the business to return money obtained through deceptive pricing.10California State Legislature. A Primer on Business and Professions Code Section 172009California Legislative Information. California Code Business and Professions Code 17535 To bring a private action, you have to show you suffered injury in fact and lost money or property because of the deceptive pricing. For misleading discount claims, the usual measure of recovery is the difference between what you paid and what you would have paid without the deception.
The Consumers Legal Remedies Act, at Civil Code Section 1750 and following, reaches further. It specifically prohibits false statements about price reductions, advertising goods with intent not to sell them as advertised, and advertising a price that leaves out mandatory fees.2California Legislative Information. California Code Civil Code 1770 The CLRA lets consumers recover actual damages and, where a violation is willful, punitive damages, and class actions under it regularly produce refunds, vouchers, and court-supervised changes to advertising practices.
Businesses sometimes try to head off claims by issuing voluntary refunds or store credits before anyone files suit. That can reduce exposure, but it does not immunize a company whose underlying practice was systematic. The question for both regulators and courts is whether the business fixed the practice, not just whether it refunded a few customers.