For many years, consumers have been complaining about businesses with “hidden fees” and inaccuracies with displayed pricing and deals. These claims have caused mounting concern among consumers that mandatory fees were not being disclosed upfront.
In 2023, consumer pressure to impose laws against “deceptive” pricing was mounting on Congress and the Federal Trade Commission (FTC). As a result, the FTC proposed a new rule on “Unfair and Deceptive Fees” which requires that all required fees and charges be disclosed clearly, in a way that would be “difficult to miss”.
And while the federal government has been moving to install laws around hidden fees, so have state governments. As of July 1, 2024, businesses operating in California (which includes self-storage operators) must comply with a new law the California government calls the “Honest Pricing Law” or “Hidden Fees Statute” (SB 478). This legislation is designed to promote transparency in pricing by mandating that businesses fully disclose all mandatory fees and charges upfront and explaining their purpose. It does not dictate pricing and what fees may be charged, but, instead, that the pricing must be all-inclusive. As California’s attorney general wrote, “[p]ut simply, the price a Californian sees should be the price they pay.” Moving forward, hidden fees and drip pricing will now be considered a form of false advertising and violate state law.
The law applies to the sale or lease of most consumer goods and services such as event tickets, short-term rentals, hotels, restaurants, and food delivery. For self-storage operators, this means that all mandatory fees—such as administrative fees, reservation fees, lock purchases, and any other required charges must be included in the advertised price.
The Honest Pricing Law represents a significant shift towards greater transparency in pricing for businesses operating in California. The law eliminates hidden fees and ensures that customers are fully informed about the total cost of a service or product before making a purchase.
For self-storage operators, this means updating pricing information, enhancing disclosure practices, and clearly communicating rental rates upfront, as well as possibly reconsidering what fees (and their amounts) that are being charged.
Operators outside of California
While the Honest Pricing Law pertains to California operators, it’s likely that more states will adopt similar laws in the future. Other states have proposed legislation that permits hidden fees and charges. Business owners should keep tabs on changes in state policy that could affect their pricing strategy.
Click here for more FAQs. As more states follow California’s lead, it is important for self-storage operators nationwide to stay informed about similar legislative changes and be prepared to adjust their practices accordingly.
