Minnesota Junk Fee Law: All-In Pricing for Businesses

What does Minnesota’s all-in pricing law require?

Minnesota’s all-in pricing law makes it a deceptive trade practice to show a price that leaves out any mandatory fee or surcharge. The number on the menu, web page, ad, or quote must be the full price the customer must pay, apart from the exclusions below.

The operative sentence of Minn. Stat. § 325D.44, subd. 1a, reads: “A person engages in a deceptive trade practice when, in the course of business, vocation, or occupation, the person advertises, displays, or offers a price for goods or services that does not include all mandatory fees or surcharges.” Three verbs set the reach. An advertised price, a displayed price on a shelf tag or screen, and an offered price in a quote or contract are all covered. Later paragraphs of the same subdivision limit the rule, allowing a reasonable shipping fee and letting some businesses comply through a clear and conspicuous disclosure instead.

The Attorney General’s FAQ states two points that answer the questions owners raise first. The law “is not a pricing regulation and does not dictate how much someone can charge for goods or services.” And a separate disclosure before checkout does not cure a low headline price: “No. The price advertised, offered, or displayed to consumers must be the full price that the consumer is required to pay, inclusive of all mandatory fees or surcharges.” You may still itemize a fee on the receipt, as long as the price shown up front already includes it.

The statute does not make an independent publisher liable. “If the person that disseminates an advertisement is independent of the advertiser, the person is not liable for the content of the advertisement.” A newspaper or an independent ad network that runs your ad does not carry your liability for its price.

What counts as a mandatory fee under the Minnesota law?

A mandatory fee under Minnesota law is any fee or surcharge that must be paid to buy the item, that the customer cannot reasonably avoid, or that a reasonable person would expect to be part of the purchase. Meeting any one of the three tests is enough.

Subdivision 1a provides that “mandatory fee” includes but is not limited to a fee or surcharge that:

1. “must be paid in order to purchase the goods or services being advertised”;
2. “is not reasonably avoidable by the consumer”; or
3. “a reasonable person would expect to be included in the purchase of the goods or services being advertised.”

Two drafting choices matter. The list “includes but is not limited to,” so a fee outside the three clauses can still be mandatory. And the clauses are joined by “or,” so a fee needs to meet only one. The Attorney General’s FAQ restates the list with “and,” but the statute’s “or” controls.

The label on the fee does not change the analysis. The Attorney General’s FAQ treats a restaurant’s “health and wellness” fee as a mandatory fee that must be included in the menu price, and its sample of a noncompliant ad shows a $15 price with a $3 surcharge and a $2 service fee listed below it. The compliant version advertises $20 and, if the business wishes, notes that the price includes the service fee and surcharge. A fee labeled as administrative, processing, booking, or kitchen appreciation gets the same test.

What can a business leave out of the advertised price?

A Minnesota business may leave out of the advertised price the taxes imposed on the sale and a reasonable shipping fee actually incurred, and it may advertise a discount below the all-in price. The Attorney General’s guidance adds that a reasonably avoidable charge is not mandatory, but under the statute a fee a reasonable person would expect to be included in the purchase still counts.

• Taxes on the transaction. Under subdivision 1a, “mandatory fee does not include taxes imposed by a government entity on the sale, use, purchase, receipt, or delivery of the goods or services.” The Attorney General’s FAQ lists sales tax, retail delivery fees, and local bag fees as examples. The exclusion does not reach a business’s own costs: the FAQ says taxes such as corporate income tax and property taxes do not qualify even if they shape your prices, so a surcharge passed on to cover those costs is tested as a fee.
• Shipping. “A person may charge a reasonable postage or shipping fee that is actually incurred by a consumer who has purchased a good that requires shipping.” That paragraph speaks only of postage or shipping actually incurred. A separate “handling” or “packaging” charge is tested under the three-part definition above.
• Discounts. “Nothing in this subdivision prevents a person from offering goods or services at a discounted price from the advertised, displayed, or offered price.” Discount advertising still must not mislead, which my page on coupon and discount disclaimers covers.
• Avoidable charges. The Attorney General’s FAQ gives late fees for equipment rentals, charges for smoking in a hotel room, and credit card surcharges a customer can avoid by paying cash as examples of fees that may fall outside the rule.

A card surcharge that stays out of the advertised price still has its own statute. Minn. Stat. § 325G.051, subd. 1, caps the surcharge, requiring that it “does not exceed five percent of the purchase price.” In person, you must inform the customer “both orally at the time of sale and by a sign conspicuously posted on the seller’s or lessor’s premises.” Online, you must post a surcharge notice “during the sale, at the point of sale, on the customer order summary, or on the checkout page of the website.”

By phone, the notice reaches services only: “if the sale or lease of services is processed over the telephone, the seller or lessor informs the customer of the surcharge orally.” A business with its own store card cannot surcharge it: “A seller or lessor of goods or services that establishes and is responsible for the seller or lessor’s own customer credit or charge card may not impose a surcharge on a customer who elects to use that credit or charge card in lieu of payment by cash, check, or similar means.” Under subdivision 2, a seller who violates the section faces “a civil penalty of not more than $500” and “shall refund the surcharge to each buyer.”

How are automatic gratuities treated differently from other restaurant fees?

A Minnesota restaurant, bar, or hotel may keep an automatic and mandatory gratuity outside the menu price if each priced offer or ad clearly and conspicuously discloses the gratuity’s percentage. Any other mandatory restaurant fee must be built into the menu price.

The restaurant path is paragraph (h) of subdivision 1a: “A food or beverage service establishment, including a hotel, is compliant with this subdivision if, in every offer or advertisement for the purchase of a good or service that includes pricing information, the total price of the good or service being offered or advertised includes a clear and conspicuous disclosure of the percentage of any automatic and mandatory gratuities charged.” The Attorney General’s sample compliant menu prints a line such as a 20% automatic gratuity for parties of eight or more.

Whether a charge is a gratuity turns on Minnesota’s wage law. Under Minn. Stat. § 177.23, subd. 9, gratuities include “an obligatory charge assessed to customers, guests or patrons which might reasonably be construed by the guest, customer, or patron as being a payment for personal services rendered by an employee and for which no clear and conspicuous notice is given by the employer to the customer, guest, or patron that the charge is not the property of the employee.” Under Minn. Stat. § 177.24, subd. 3, “any gratuity received by an employee or deposited in or about a place of business for personal services rendered by an employee is the sole property of the employee.”

That creates a choice for owners. A charge that goes to the staff as a gratuity can use the percentage disclosure. A mandatory charge that falls outside the gratuity definition, such as one for which you give customers clear and conspicuous notice that it is not the property of the employee, is a mandatory fee. The Attorney General’s FAQ says a non-gratuity charge “must be included in the total price advertised, displayed, or offered to consumers by the restaurant,” and its compliant banquet example builds a 5% service charge into the food and liquor totals. I suggest deciding which of the two your charge is before you reprint the menu, because the wage law and the pricing law both depend on that answer. Menu descriptions carry their own rules, covered in my page on truth-in-menu rules.

How do delivery fees fit the rule?

Third-party delivery platforms have their own compliance path under the Minnesota law: disclose the fee when the customer picks a vendor or item, and itemize it before checkout. The Attorney General’s guidance reads a restaurant that runs its own digital channels and makes its own deliveries as outside the term, so under that reading its delivery charge is tested under the general mandatory-fee definition.

Paragraph (c) of subdivision 1a says a delivery platform complies if both steps occur. First, “at the point when a consumer views and selects either a vendor or items for purchase, a delivery platform must display in a clear and conspicuous manner that an additional flat fee or percentage is charged. The disclosure must include the additional fee or percentage amount.” Second, “after a consumer selects items for purchase, but prior to checkout, a delivery platform must display a subtotal page that itemizes the price of the menu items and the additional fee that is included in the total cost.”

The Attorney General’s FAQ reads “delivery platform” to mean a third-party service that does not make the goods or set their price. It says “a restaurant company that runs its own digital channels and makes its own deliveries is not a ‘delivery platform.’” For your own delivery fee, the question is the paragraph (b) definition. It reaches a fee that “must be paid in order to purchase the goods or services being advertised,” a fee that “is not reasonably avoidable by the consumer,” or a fee “a reasonable person would expect to be included in the purchase of the goods or services being advertised.” The Attorney General’s guidance treats a reasonably avoidable charge as not mandatory, and a pickup option bears only on that second clause. A fee every delivery order pays is one that “must be paid in order to purchase” the delivery being advertised, and I suggest building it into each delivery price because it meets the first clause of the definition.

How do variable-price services and auctions comply?

A Minnesota service business whose total depends on the customer’s choices, on distance, or on time complies by clearly and conspicuously disclosing three things: what sets the price, any mandatory fees, and that the total may vary. Auctions where consumers can bid and the total cost is indeterminable have a similar two-part disclosure.

Paragraph (g) of subdivision 1a provides: “A person offering services where the total cost of a service is determined by consumer selections and preferences, or where the total cost of the service relates to distance or time, is compliant with this subdivision if the person discloses in a clear and conspicuous manner (1) the factors that determine the total price, (2) any mandatory fees associated with the transaction, and (3) that the total cost of the services may vary.” Hourly trades, movers, towing, limousine and transport services, and custom event packages are the kinds of businesses whose prices turn on those variables.

The disclosure has to name the fees. A plumber who advertises “$95 per hour” and charges every customer a trip fee should list the trip fee in the same ad, with the factors (hours worked, parts) and a statement that totals vary. The paragraph does not excuse leaving a known, fixed fee out of the ad. For an auction “where consumers can place bids on the goods or services and the total cost is indeterminable,” paragraph (f) says a seller “is compliant with this subdivision if the person discloses in a clear and conspicuous manner any mandatory fees associated with the transaction and that the total cost of the goods or services may vary.” A buyer’s premium is the obvious fee to name. A misleading service price can also raise consumer fraud claims against service businesses, a separate exposure.

Which businesses and fees are exempt?

Subdivision 1b exempts three categories from the Minnesota all-in pricing rule: motor vehicle dealer fees authorized by law, businesses regulated by the Minnesota Public Utilities Commission, and real estate settlement service charges. Broadband providers and businesses complying with certain federal rules have safe harbors.

Minn. Stat. § 325D.44, subd. 1b, says subdivision 1a does not apply to:

1. “fees authorized by law related to the purchase or lease of a motor vehicle that are charged by a motor vehicle dealer”;
2. “any business or the business’ affiliate where either the business or the affiliate is regulated by the Minnesota Public Utilities Commission”; or
3. “any fees, surcharges, or other costs associated with settlement services, as defined in the Real Estate Settlement Procedures Act, United States Code, title 12, section 2602(3). This clause does not apply to real estate broker commissions and fees.”

Subdivision 1a adds compliance paths for broadband. Paragraph (i) provides: “A person is compliant with this subdivision if the person providing broadband Internet access service on its own or as part of a bundle is compliant with the broadband consumer label requirements under Code of Federal Regulations, title 47, section 8.1(a).” Paragraph (j) covers a business that complies with the pricing requirements the Federal Communications Commission adopted in Report and Order FCC 24-29. Paragraph (k) states: “This subdivision is enforceable unless preempted by federal law.” Separately, Minn. Stat. § 325D.46, subd. 1, says the act does not apply to “conduct in compliance with the orders or rules of, or a statute administered by, a federal, state, or local governmental agency.”

Hotels and ticket sellers face a federal rule on top of the state rule. The Federal Trade Commission’s Rule on Unfair or Deceptive Fees, 16 C.F.R. § 464.2, covers live-event tickets and short-term lodging, and provides: “It is an unfair and deceptive practice and a violation of this part for any business to offer, display, or advertise any price of a covered good or service without clearly and conspicuously disclosing the total price.” The Attorney General’s FAQ adds that businesses whose pricing disclosures are already regulated by other state laws are generally not exempt.

Paragraph (b) of the federal rule adds: “In any offer, display, or advertisement that represents any price of a covered good or service, a business must disclose the total price more prominently than any other pricing information. However, where the final amount of payment for the transaction is displayed, the final amount of payment must be disclosed more prominently than, or as prominently as, the total price.”

Minnesota ticket sellers also have their own statute. Under Minn. Stat. § 325F.676, subd. 2, an operator, ticket reseller, or online ticket marketplace “must, at all times during the ticket listing and purchasing process, disclose in an easily readable and conspicuous manner and in dollars”:

1. “the total cost of the ticket, inclusive of all fees and surcharges that must be paid in order to purchase the ticket”;
2. “the portion of the ticket price that represents a service charge”; and
3. “any other fee or surcharge charged to the purchaser.”

Who enforces the law, and what are the penalties?

The Minnesota Attorney General enforces the all-in pricing law and may seek civil penalties of up to $25,000. A competitor or customer likely to be harmed may sue for an injunction, and under the Deceptive Trade Practices Act a private party’s remedy is an injunction rather than money damages. A Consumer Fraud Act claim over the same conduct can carry damages if the claimant shows the suit benefits the public.

Private suits rest on Minn. Stat. § 325D.45, subd. 1. It provides: “A person likely to be damaged by a deceptive trade practice of another may be granted an injunction against it under the principles of equity and on terms that the court considers reasonable. Proof of monetary damage, loss of profits, or intent to deceive is not required.” Under Minn. Stat. § 325D.44, subd. 2, “a complainant need not prove competition between the parties or actual confusion or misunderstanding.” In Alsides v. Brown Institute, Ltd., 592 N.W.2d 468 (Minn. App. 1999), a suit by former trade-school students, the Minnesota Court of Appeals held: “We therefore conclude that the sole statutory remedy for deceptive trade practices is injunctive relief.” Subdivision 2 governs costs and makes fees discretionary for either side: “Costs shall be allowed to the prevailing party unless the court otherwise directs. The court may award attorneys’ fees to the prevailing party if (1) the party complaining of a deceptive trade practice has brought an action knowing it to be groundless, or (2) the party charged with a deceptive trade practice has willfully engaged in the trade practice knowing it to be deceptive.”

For public enforcement, Minn. Stat. § 8.31, subd. 1, directs that “The attorney general shall investigate violations of the law of this state respecting unfair, discriminatory, and other unlawful practices in business, commerce, or trade.” Subdivision 3 authorizes the Attorney General to recover “a civil penalty, in an amount to be determined by the court, not in excess of $25,000.” The Attorney General’s FAQ describes the office’s approach: it is “focused on working with businesses and individuals to get voluntary compliance with this law.” For a business that refuses, the FAQ lists “injunctive relief, restitution, disgorgement, civil penalties of up to $25,000 per violation, costs and disbursements, including costs of investigation and any reasonable attorneys’ fees.”

Other law can add exposure. Under § 325D.45, subd. 3, “The relief provided in this section is in addition to remedies otherwise available against the same conduct under the common law or other statutes of this state.” One such statute is Minn. Stat. § 325F.69, subd. 1, part of the Minnesota Consumer Fraud Act, which reaches a “misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise.”

Alsides also held that a private citizen may sue under the Consumer Fraud Act for damages through Minn. Stat. § 8.31, subd. 3a. That subdivision provides that “any person injured by a violation of any of the laws referred to in subdivision 1 may bring a civil action and recover damages, together with costs and disbursements, including costs of investigation and reasonable attorney’s fees.” The Minnesota Supreme Court limited that remedy the next year in Hoang Minh Ly v. Nystrom, 615 N.W.2d 302 (Minn. 2000), which calls subdivision 3a the Private AG Statute: “we hold that the Private AG Statute applies only to those claimants who demonstrate that their cause of action benefits the public.” My page on unfair and deceptive trade practices law explains how these statutes fit together.

What should a pricing review cover for menus, websites, quotes, and invoices?

A pricing review under Minnesota’s all-in pricing law starts with a list of every charge you add to a base price and ends with each price point showing a number that already includes the mandatory ones. I suggest working through it in this order, because the classification in step 2 decides what changes in steps 3 to 6:

1. List every add-on. Pull your point-of-sale settings, checkout code, rate cards, banquet and catering contracts, and invoice templates. Write down each fee and surcharge, its amount, and when it applies.
2. Classify each charge. Mark it as a tax on the sale, actual shipping, an automatic gratuity, a mandatory fee, or an optional charge. A charge outside the first three groups is a mandatory fee if it meets any one clause of the subdivision 1a definition. It meets one if it “must be paid in order to purchase the goods or services being advertised,” if it “is not reasonably avoidable by the consumer,” or if “a reasonable person would expect to be included in the purchase of the goods or services being advertised.” The Attorney General’s guidance treats a reasonably avoidable option as not mandatory, but test it against all three clauses before you treat it as an optional charge under step 6.
3. Fold mandatory fees into each price point. Update menus, menu boards, shelf tags, web product pages, app listings, social posts, print and broadcast ads, phone scripts, written quotes, proposals, and contracts. Each place a price appears is an advertised, displayed, or offered price.
4. Fix the gratuity language. If you keep an automatic gratuity, print its percentage on every priced menu or offer. If the charge is not a gratuity, move it into the price and confirm your notice matches § 177.23, subd. 9.
5. Use the variable-price disclosure where it fits. For time, distance, or choice-based work, add the three paragraph (g) disclosures to ads and quotes, naming each mandatory fee.
6. Check optional charges. For a card surcharge, confirm the five percent cap, the in-person and online notices in § 325G.051, the oral notice for services sold by phone, and that the card is not your own customer credit or charge card. Confirm a customer can really avoid each optional fee.
7. Keep the itemization. Receipts and invoices may still break out the fees, as long as the up-front price already includes them.

Subscription businesses should check Minnesota’s automatic renewal law at the same time, since renewal offers also state prices. My list of other Minnesota compliance obligations covers the recurring duties beyond pricing.

Next Steps for Your Pricing

Minnesota’s junk fee law leaves your prices and fees to you and requires that the first number a customer sees already include every mandatory charge. A pass through your menus, web pages, quotes, and contracts, with each fee classified under subdivision 1a, shows which prices need to change. More guidance on Minnesota business compliance is collected on my compliance page. If you would like me to analyze your fees, email [email protected] with your menu, rate sheet, or checkout screens and a short description of each charge. I can tell you which charges are mandatory fees under subdivision 1a and how each price point should read.