Start preparing for Minnesota’s inclusive pricing mandate

The provisions on fees and surcharges enter into force on 1 January 2025.

At the end of the 2024 Minnesota legislative session, lawmakers passed a new law regulating fees and surcharges. What started as an effort to eliminate or address so-called “junk” fees could have serious consequences for your small business.

As is often the case when lawmakers try to solve a specific problem and end up with an economy-wide regulation, the end product can be quite confusing. In this case, one of the bill’s sponsors often cited hotel “resort fees,” which appear only at the end of an electronic transaction, as an example of “junk fees” that should be eliminated.

The solution was to require anyone advertising a product or service for sale to include most fees and surcharges in the advertised price, rather than separately listing them at the end of the transaction. But instead of focusing only on big hotel brands, the new law applies to almost everyone.

The final law is sometimes referred to as the Inclusion Pricing Order and can be read in its entirety here: Chapter 111 – MN Laws 2024.

Below is some background information about the mandate, which goes into effect on January 1, 2025.

1. It is a deceptive trade practice for a person or company to advertise, display or offer a price for goods or services that does not include all mandatory fees and surcharges.
2. Mandatory fee means a fee that: “(i) has to be paid in order to acquire the advertised good or service, (ii) cannot be reasonably avoided by the consumer, Or (iii) a reasonable person would expect to be included in the purchase of the goods or services advertised.” This is a very broad definition because the intention of the bill sponsor was for the difference between the advertised price and the final price to be as small as possible.
3. The mandatory fee does not include:

(a) Taxes imposed by a governmental authority on the sale, use, purchase, receipt or delivery of goods or services.

(b) A reasonable shipping or handling charge actually incurred by the consumer who purchased the goods requiring shipping.

(c) Fees required by law in connection with the purchase or lease of a motor vehicle, charged by a motor vehicle dealer.

(d) All fees, surcharges and other costs related to settlement services, as defined in the Act on Settlement Procedures in the Real Estate Sector.

4. There are alternative requirements for some hospitality providers and establishments that small business owners should be aware of:

(g) A person offering services for which the total cost is determined by the consumer’s choices and preferences or for which the total cost of the service is dependent on distance or time meets the requirements of this subchapter if the person clearly and conspicuously discloses (1) the factors that determine the total price, (2) any mandatory fees associated with the transaction, and (3) information that the total cost of the services may vary.

(h) A food service establishment, including a hotel, complies with the requirements of this subchapter if, in any offer or advertisement for the purchase of a good or service that includes pricing information, the total price of the good or service offered or advertised includes a clear and conspicuous disclosure of the percentage of any automatic or mandatory gratuity charged under the agreement.

If you have questions or concerns about the inclusive pricing mandate, please contact NFIB Minnesota State Director John Reynolds at: (email protected) or 651-293-1283.