California's SB 478, the Honest Pricing Law, makes it unlawful as of July 1, 2024 for most consumer businesses to advertise, display, or offer a price that does not include all mandatory fees other than government-imposed taxes and reasonable shipping. The rule lives at California Civil Code section 1770(a)(29). The California Attorney General's hidden-fees page, published May 8, 2024, names the target drip pricing: advertising a price that is less than the actual price the consumer will have to pay. A credit-card fee that appears only at the PIN pad after a lower sticker is the payments version of that surprise. If you only take cards, the Attorney General says the processing fee is mandatory and belongs in the advertised price. If cash is an option, dual pricing or a single all-in price is the safer shape, because the number the customer sees is the number they pay.
This is a reading of public Attorney General FAQs, the Civil Code, and Visa surcharge rules, not legal advice. Confirm the current text with counsel, your acquirer, and the Attorney General's page before you change a menu, a shelf tag, or a terminal setting.
- Advertise $80, then add 3 percent ($2.40) at the PIN pad
- Customer learns the real total after they have chosen to pay
- SB 478 treats a listed price that is not the required total as drip pricing
- If you only take cards, the Attorney General says the card fee is mandatory and belongs in the advertised price
- Post cash $80 and card $82.40 before tender, or one all-in card price
- The customer sees the number they will pay
- Visa treats two posted prices as a discount offer if the card total is not built by adding a fee
- Safer in California because the advertised price matches the charge
What SB 478 actually does
SB 478 is a transparency statute, not a price cap. The Attorney General is explicit: the law does not change what you may charge or what you may include in that charge. It requires that the listed price already contain every mandatory amount except taxes or fees a government imposes on the transaction, and postage or carriage that will be reasonably and actually incurred to ship a physical good. Handling is not shipping. Optional add-ons (a warranty, a seat upgrade, a late-return fee) stay off the sticker because the customer can decline them.
You cannot comply by revealing the extra dollars later. The Attorney General's FAQ, published May 8, 2024 and updated after SB 1524, answers three merchant workarounds with "No": disclosing additional required fees before the customer finalizes; advertising a lower price while noting that more fees will be added; and listing one price while separately stating that an additional percentage will apply. The advertised or listed price has to be the full price the consumer is required to pay. A subsequent itemization of what that total includes is fine. A headline that is not the total is not.
The law covers the sale or lease of most goods and services for a consumer's personal use, including event tickets, short-term rentals, hotels, and food delivery platforms. It does not apply to purchases for commercial use, and it carves out some industries already governed by other pricing statutes.
The card-fee question on the Attorney General's page
The FAQ merchants actually need is this one: "Does a business need to include credit card processing fees in the advertised price?" The Attorney General's answer, on the same hidden-fees page: generally no, because a credit card processing fee is not a mandatory fee if the customer can avoid it by paying a different way, for example cash. However, if the business only accepts credit cards, the fee is mandatory and has to be included in the advertised price.
That is the fork. Card-only salon, software, or online checkout: the 3 percent you planned to add at the end is part of the required total, so it belongs on the first number the customer sees. Store that still takes cash: SB 478 does not, by itself, force the card fee into the sticker. It also does not bless a bait price. The Attorney General's separate credit-card surcharge page still says merchants are barred from misleading customers, including by advertising a lower price than they actually charge or hiding differences among credit, debit, and cash prices.
Surcharge, dual pricing, and cash discount are three different programs. SB 478 cares which number you advertised, not which vendor name you put on the fee.
California's older surcharge statute is still on the books
Civil Code section 1748.1, enacted in 1985 and still compiled, says no retailer may impose a surcharge on a cardholder who elects to use a credit card instead of cash, check, or similar means. The same section allows a discount to induce cash, check, or other non-credit payment if it is offered to all prospective buyers.
The Attorney General's credit-card surcharge page records the court overlay: in January 2018 the Ninth Circuit held that the law could not be enforced as to the businesses that brought Italian Colors v. Becerra, 878 F.3d 1165 (9th Cir. 2018). The Attorney General will generally apply that decision to merchants similarly situated to those plaintiffs. The statute was not repealed. Enforcement against a given merchant is a counsel question, not a blog conclusion.
What is not a counsel question is the overlay that still applies to everyone: do not advertise one number and charge another, and do not hide the spread among tenders. SB 478 made that overlay statutory for mandatory fees as of July 1, 2024.
Visa rules still sit on top
State transparency law does not waive card-brand surcharge rules. Surcharging a Visa credit sale in the U.S. still requires all of the following, from Visa's small-business regulations page and the U.S. Merchant Surcharge Q and A dated February 15, 2024:
- Notify your acquirer at least 30 days before the first surcharged sale.
- Credit cards only. Debit and prepaid cannot be surcharged, including when the customer taps "credit" on the PIN pad.
- Cap the fee at the lower of your merchant discount rate for that credit product or 3 percent.
- Disclose at the point of entry, at the point of sale, and as a separate receipt line.
Visa treats a program that reaches the card total by adding a fee as a surcharge, whatever the sign says. Two prices posted before tender, with the card receipt equal to the posted card prices, is the discount-offer shape, not the surcharge shape.
Worked example (illustrative)
Take a posted $80 service. A terminal set to add 3 percent at checkout adds $2.40. The customer pays $82.40.
If you only accept cards, SB 478 (Attorney General FAQ, May 8, 2024) treats that $2.40 as mandatory. The advertised price should have been $82.40, not $80 plus a later percentage. Listing $80 and stating "plus 3 percent" is the workaround the FAQ rejects.
If you also take cash, the $2.40 is not mandatory under that FAQ. Dual pricing still fits: post cash $80 / card $82.40 on the item or menu before tender. All-in also fits: post $82.40 as the regular price and take $2.40 off for cash. Both put the card number in front of the customer. A PIN-pad add-on after an $80 sticker does not.
Visa can still cut the 3 percent. If your merchant discount rate on that Visa credit product is 2.40 percent, the brand cap is $80 × 0.0240 = $1.92, not $2.40. A flat 3 percent toggle overshoots the discount rate on every ticket. You cannot set a legal surcharge, in California or anywhere else Visa's U.S. rules apply, without the actual credit discount rate from the statement.
Food sellers, and what "safer" means
SB 1524, chaptered June 29, 2024 as an urgency measure, amended section 1770 so that a mandatory fee on individual food or beverage items sold directly by a restaurant, bar, food concession, grocery store, grocery delivery service, or a fully disclosed banquet or catering menu is outside the all-in advertising rule if the fee is clearly and conspicuously displayed, with an explanation of its purpose, on any advertisement, menu, or other display that contains the price. The Attorney General restates that exemption on the hidden-fees page. Third-party food delivery platforms are not in it. When a delivery platform advertises the price of its delivery service, the Attorney General says that price must be the all-in price of the delivery service.
"Safer" here is operational, not a verdict. Dual pricing and all-in prices match the advertised number to the charged number, which is what SB 478 asks for on mandatory fees and what the Attorney General's surcharge page asks for on tender differences. A surprise add-on is the failure mode in both places. If you need the real credit mix before you pick a posted card price, run a statement through the analyzer and use the as-billed credit cost as the ceiling, then take the lower of that figure and 3 percent.
FAQ
Does California SB 478 ban credit card surcharges? No. SB 478 is a transparency law, not a surcharge ban. The California Attorney General's hidden-fees FAQ (published May 8, 2024) says a card processing fee is generally not mandatory if the customer can pay another way. If you only accept cards, that fee is mandatory and must sit in the advertised price.
Do I have to include a credit card processing fee in my advertised California price? Generally no, if the customer can avoid it by paying cash or another tender. Yes, if cards are the only payment you take. The Attorney General's credit-card surcharge page still bars hiding differences among cash, debit, and credit prices.
What is drip pricing under SB 478? Advertising a price that is less than the actual price the consumer will have to pay. The Attorney General says you cannot fix it by disclosing extra fees later in checkout, or by listing a price and stating that an additional percentage will apply.
Is dual pricing legal in California? Dual pricing posts a cash price and a card price before tender, so the customer sees both. Visa's U.S. Merchant Surcharge Q and A (February 15, 2024) treats two posted prices as a discount offer if the card total is not built by adding a fee. Confirm the current Civil Code text with counsel.
What did SB 1524 change for restaurants? Chaptered June 29, 2024 as an urgency statute, SB 1524 exempts certain mandatory fees on individual food and beverage items sold by restaurants, bars, grocery stores, and similar vendors if the fee is clearly and conspicuously displayed, with its purpose, wherever the price is shown. Third-party food delivery platforms are not in that exemption.
If I only take cards, can I advertise $80 and add 3 percent at checkout? The Attorney General says no: if cards are the only tender, the processing fee is mandatory and belongs in the advertised price. Visa still caps a U.S. credit surcharge at the lower of your merchant discount rate or 3 percent, forbids debit and prepaid, and requires 30-day acquirer notice.
Sources
- California Department of Justice, SB 478 Hidden Fees FAQs, published May 8, 2024, page updated July 23, 2024.
- California Department of Justice, Credit Card Surcharges, page updated May 3, 2024.
- California Civil Code section 1770(a)(29) (Honest Pricing Law / Hidden Fees Statute).
- California Civil Code section 1748.1 (credit-card surcharge statute).
- SB 1524 (Dodd), chaptered June 29, 2024 (restaurant, bar, and grocery display exemption; urgency statute).
- Visa, merchant credit surcharging (30-day acquirer notice), accessed August 2026.
- Visa, U.S. Merchant Surcharge Q and A, version 02152024 (February 15, 2024).
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