Advertising Law Blog

On the heels of California’s “Hidden Fees Statute,” Minnesota has enacted its own price transparency law. Under the new Minnesota law, any business must disclose all mandatory fees or surcharges any time that that business advertises, displays or offers a price for goods or services.

The Minnesota law defines a mandatory fee as a fee or surcharge that (i) must be paid in order to purchase the goods or services advertised, (ii) is not reasonably avoidable by the consumer, or (iii) a reasonable person would expect to be included in the purchase of the goods or services being advertised. For the purposes of this law, a mandatory fee does not include taxes imposed by a government entity of the sale, use, purchase, receipt or delivery of the goods or services.

The following issues are specifically addressed by the Minnesota law:

• Shipping: The law states that businesses may charge a reasonable postage or shipping fee that is actually incurred by the consumer who has purchased the applicable goods.
• Auctions: Where a consumer can place bids on goods or services and therefore the total cost is indeterminable, a business will be compliant with the law if it clearly and conspicuously discloses any mandatory fees associated with the transaction and notes that the total cost of the goods or services may vary.
• Consumer Selections and Preferences: Where the total cost of service is determined by consumer selection, preferences, distance or time, a business will be compliant with the law if it clearly and conspicuously discloses the factors that determine the total price, any mandatory fees associated with the transaction and that the total cost of the services may vary.
• Restaurants and Hotels: Food and beverage establishments, including hotels, must include a clear and conspicuous disclosure of the percentage of any automatic and mandatory gratuities in every offer or advertisement for the purchase of a good or service that includes pricing information.
• Delivery Platforms: The law imposes additional parameters for delivery platforms to comply with the requirements. Specifically, the law states that delivery platforms will be compliant if the platform clearly and conspicuously discloses the amount of any additional fee or percentage amount at the point of vendor or item selection, and that after a consumer selects an item for purchase, but before checkout, the delivery platform displays a subtotal page that itemizes the price of the menu items, the additional fee and the total cost.

The law is effective January 1, 2025, except for industries regulated by the Metropolitan Airports Commission, where it takes effect on June 1, 2025.

Takeaway: As various states continue to introduce similar price transparency bills, it is growing increasingly important for advertisers to keep abreast of these changing requirements and to assess their overall compliance obligations. To that end, advertisers should recognize price transparency as a trend in state laws and work toward a holistic approach to compliance with the understanding that other states are likely to pass similar laws.