Legal Landscape
U.S. sales, billing, and pricing are governed by both federal and state laws. It is essential to comply with federal mandates and understand the consumer protections enforced by the attorney general in each state where you do business.
Pricing Practices
The Federal Trade Commission (FTC) enforces the Guides Against Deceptive Pricing (16 CFR Part 233) , which treat pricing with the same truthfulness, fairness, and substantiation standards as general advertising. These guides cover topics such as former price comparisons, retail vs. suggested manufacturer pricing, BOGO offers, and comparable value presentations ( eCFR).
Starting May 12, 2025, a new FTC Trade Regulation Rule on Unfair or Deceptive Fees (16 CFR Part 464) will take effect. This rule requires businesses in live-event ticketing and short-term lodging to display total prices including all mandatory fees up front , banning hidden “drip” pricing tactics ( Federal Trade Commission).
Additionally, hotel and ticket sellers must disclose fees fairly when advertising, like resort or convenience charges, to ensure transparency for consumers ( The Verge).
Going Out of Business Sales
It is permissible to advertise a “going out of business” sale only if the business is genuinely closing. Using this marketing claim without actual intent to close is considered deceptive and can result in legal action.
Negative Option Offers (Auto‑renewals / Free Trials)
A Negative Option Offer automatically charges or sends goods unless a consumer opts out. The updated FTC Negative Option Rule , informally known as the “click-to-cancel rule,” requires clear and conspicuous disclosures of all plan terms, explicit consumer consent before billing, and simple cancellation mechanisms no harder than the signup method ( Federal Trade Commission).
Importantly, a U.S. appeals court vacated this rule as of July 2025 on procedural grounds, though the FTC may revisit enforcement in the future. Despite the vacatur, many states maintain their own negative option statutes that do not rely on FTC authority ( timesofindia.indiatimes.com). For now, businesses should still follow best practices to reduce consumer complaints and litigation risk.
What Happens If You Don’t Comply?
Failure to comply with deceptive pricing or auto-renewal rules can lead to FTC enforcement, state enforcement actions, or private lawsuits under state UDAP (“little FTC”) statutes. Potential penalties include civil fines, refund obligations, corrective messaging, and significant reputational damage. All practices must meet the standard of clarity, fairness, and substantively accurate disclosures, even without a formal rule in force ( lw.com).
Best Practice Summary
Ensure advertised prices reflect all mandatory fees up front. Avoid false “going out of business” claims unless the business is truly closing. If offering auto-renewals or negative options, clearly disclose all terms, obtain affirmative consent, and make cancellation as easy as registration—even amid legal uncertainty about the federal rule. Keep pace with major state pricing and auto-renewal laws in places like California, Massachusetts, Minnesota, and Illinois. Monitor state consumer protection offices for evolving requirements.