"Convenience Fee," "Processing Fee": When a Checkout Fee Had to Be in the Price

If the fee was mandatory, it had to be inside the price you were shown. Disclosing it later — on the cart page, on the order summary, in a footnote under the total — is not what Minnesota’s statute asks for, and the fact that you saw the number before you clicked “pay” does not answer the question.

That is the whole point of subdivision 1a, and it is the part businesses get wrong most often, usually in good faith. They read it as a disclosure rule. It is a display rule. The obligation attaches at the moment a price goes in front of you, not at the moment money changes hands.

The sentence that does the work

Minn. Stat. § 325D.44, subd. 1a(a):

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. If the person that disseminates an advertisement is independent of the advertiser, the person is not liable for the content of the advertisement.

Three verbs: advertises, displays, offers. All three describe something that happens to a price before a transaction closes. There is no sentence anywhere in subdivision 1a that says a business complies by itemizing the fee at checkout, and there is no sentence that says a compliant total displayed late cures a non-compliant price displayed early.

The Minnesota Attorney General’s Office reads it the same way. From Frequently Asked Questions About Minnesota’s New Price Transparency Law, revised April 2025:

Can businesses comply with this law by disclosing mandatory fees or surcharges separately from the advertised price, before a consumer finalizes a transaction?

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.

I retrieved that PDF from the attorney general’s own site on September 18, 2026 and am quoting it exactly. It is the enforcing office’s stated position, not a court’s holding. But the answer is “No,” it is unqualified, and it is the same answer the statutory text produces on its own.

I looked for court decisions interpreting subdivision 1a on September 18, 2026 and found none. The same search returned 154 decisions citing section 325D.44 generally, so that is a real absence and not a quirk of the search. It covered the Minnesota Supreme Court, the Minnesota Court of Appeals, the federal district court in Minnesota and the Eighth Circuit in one free case-law database. It is not exhaustive.

One caution about that FAQ, because it matters and I would rather you hear it here. In describing the three-prong definition of “mandatory fee,” the FAQ joins the prongs with “and.” The statute joins them with “or.” Where the two differ, the statute governs — and the difference is not cosmetic, as the next section shows.

What makes a fee “mandatory”

Subdivision 1a(b):

For purposes of this subdivision, “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.

For the purposes of this subdivision, mandatory fee does not include taxes imposed by a government entity on the sale, use, purchase, receipt, or delivery of the goods or services.

“[I]ncludes but is not limited to” opens the list. The “or” at the end of clause (2) makes the three prongs disjunctive — any one of them is enough. That is why the FAQ’s “and” is worth flagging: a business that read the FAQ and concluded it had to satisfy all three prongs before a fee counted has read the definition far too narrowly.

Clause (3) is the one that does the unexpected work, and I want to state my reading plainly rather than let it sit implied. I read prong (3) to reach a fee that is technically avoidable and that everybody pays anyway. A “processing fee” on an online registration when the only other path is driving to an office during business hours is avoidable in the same sense that walking to Duluth is avoidable. The statute does not ask whether avoidance was theoretically possible. It asks what a reasonable person would expect to be included in the purchase. That is a judgment about ordinary expectation, and on a fee that appears on essentially every order, I think a reasonable person expects it inside the price.

I also want to be straight about the limit of that reading. It is a plain-language argument from a statute twenty months old, it is mine and not a court’s, and a business will argue the opposite from the same text.

Note what is out by express terms: taxes imposed by a government entity on the sale, use, purchase, receipt, or delivery. Taxes, not government fees, and not a seller’s own tax costs. The attorney general’s FAQ gives sales tax, retail delivery fees and local bag fees as examples of what may be excluded, and names corporate income tax, import duties, employment tax and property taxes as costs that do not qualify for the exclusion “even if the seller factors such costs into the prices of goods or services offered for sale to the public.”

Where a checkout fee is lawful

Subdivision 1a is not a ban on fees. It is a rule about where the number has to appear, and it contains its own safe harbors. If you are reading this because a fee annoyed you, these are the paragraphs most likely to mean the business did nothing wrong.

Delivery platforms — paragraph (c). A delivery platform is compliant “if the platform satisfies all of the following requirements.” Both are required, and both are about when you saw the number:

(1) 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; and

(2) 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.

Condition (1) is the demanding one. It requires the disclosure at vendor or item selection — the browse screen — and it requires the amount, not merely the existence of a fee. Condition (2) requires an itemized subtotal page before checkout. A platform that does both is compliant, and the fee is lawful. On the attorney general’s reading, a restaurant that makes and delivers its own food is not a “delivery platform” at all: “a pizza restaurant that also delivers its pizza, is not a ‘delivery platform’ for purposes of the law because it makes itself the goods being delivered and sets the price of the goods being delivered.”

Actual shipping — paragraph (d). “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.” Two qualifiers sit in one sentence: reasonable, and actually incurred. A postage charge that tracks what the carrier charged is squarely inside it. What the paragraph does not obviously cover is a flat “shipping and handling” number untethered to weight, distance or anything the seller actually paid — and it plainly has nothing to say about an “order processing fee” on an emailed ticket, since nothing was shipped.

Government taxes. Covered above. Sales tax stays outside the displayed price by the definition’s own terms.

Automatic gratuities — paragraph (h). A food or beverage service establishment, including a hotel, complies by clearly and conspicuously disclosing the percentage of an automatic and mandatory gratuity — the paragraph speaks of “the percentage of any automatic and mandatory gratuities charged” — instead of folding that gratuity into the displayed price. If the “service fee” that brought you to this page was an automatic gratuity on a restaurant or hotel bill, it is outside the answer this article gives. I take that fee up separately in the banquet service charge article.

Genuinely optional fees. A fee you can actually decline, on a path a real person would take, is not a mandatory fee under any of the three prongs. The clearest example is a credit-card surcharge where paying cash is available: the attorney general’s FAQ says that “[i]f the credit card surcharge is an optional charge, meaning a consumer could reasonably avoid the surcharge by paying with cash, then this credit card surcharge is not a ‘mandatory fee’ under the law and the surcharge would not need to be included in the total price that is advertised, displayed, or offered.”

Two other harbors are worth naming because readers hit them constantly. Paragraph (f) covers auctions where the total cost is indeterminable, if the seller clearly and conspicuously discloses any mandatory fees and that the total cost may vary. Paragraph (g) covers services whose total cost is set by “consumer selections and preferences” or by distance or time, if the seller clearly and conspicuously discloses the price factors, any mandatory fees, and that the total may vary — three disclosures, all required.

Whole categories of seller are outside subdivision 1a. Subdivision 1b exempts fees authorized by law related to the purchase or lease of a motor vehicle charged by a motor vehicle dealer as defined by § 168.27, subd. 1(f); “any business or the business’ affiliate where either the business or the affiliate is regulated by the Minnesota Public Utilities Commission”; and fees, surcharges or costs associated with settlement services as defined in RESPA, 12 U.S.C. § 2602(3) — with the carve-back that this last clause “does not apply to real estate broker commissions and fees.”

And the dates. Laws 2024, chapter 111, sections 1 and 2 carry an identical effective-date clause: “This section is effective January 1, 2025, except that this section is effective June 1, 2025, for industries where the prices are regulated by the Metropolitan Airports Commission.” Conduct before those dates is not a subdivision 1a violation. The attorney general’s position is also that the law is not retroactive and does not apply “[t]o the extent a contract was signed before January 1, 2025 … regardless of when the contractual obligations are completed.”

Tickets: a second Minnesota statute, with a different enforcer

Event tickets carry their own Minnesota statute on top of subdivision 1a. Minn. Stat. § 325F.676, subd. 2(a):

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.

“[A]t all times during the ticket listing and purchasing process.” Not at checkout — throughout. Subdivision 2(b) adds that the itemized components “must not be presented more prominently or in the same or larger size than the total price,” and that “[t]he price of a ticket must not increase with respect to a particular person after the ticket is first displayed to the person,” excluding reasonable delivery fees for non-electronic tickets based on the delivery method selected and any additional purchases, which must be disclosed before payment is accepted.

Four limits on that section, all of them concessions:

• Enforcement is the commissioner’s, and only the commissioner’s. Subdivision 5 is one sentence: “The commissioner may enforce this section under section 45.027.” There is no private right of action in the text of § 325F.676, no damages provision, and no fee-shifting provision.
• Movie theaters are excluded. Subdivision 1(h) defines “place of entertainment” broadly and then says: “For the purposes of this section, place of entertainment does not include movie theaters.”
• There is a transaction floor. Subdivision 2(f): “The obligations of paragraphs (a) to (d) do not apply to any person, unless the person engaged in annual aggregate transactions that were equal to or greater than $5,000.”
• The date. Laws 2024, chapter 94, section 1 provides: “This section is effective January 1, 2025, and applies to tickets sold on or after that date.”

And a federal rule on top of that, for live-event tickets

The Federal Trade Commission’s Rule on Unfair or Deceptive Fees, 16 C.F.R. part 464, took effect May 12, 2025. It was published at 90 Fed. Reg. 2066 (Jan. 10, 2025), document 2024-30293. Its reach is narrow and specific — § 464.1 defines “covered good or service” as “(1) Live-event tickets; or (2) Short-term lodging, including temporary sleeping accommodations at a hotel, motel, inn, short-term rental, vacation rental, or other place of lodging.” Restaurants, delivery, retail, memberships, registrations and admissions that are not live-event tickets are outside it.

For what it does cover, § 464.2(a):

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.

And § 464.2(b) requires the total price to be disclosed “more prominently than any other pricing information,” with the exception that where the final amount of payment is displayed, that amount must be as prominent as or more prominent than the total price. Section 464.3 separately prohibits misrepresenting “the nature, purpose, amount, or refundability of any fee or charge.”

The part that matters for a Minnesotan is § 464.4. Paragraph (a) says the part does not supersede state law except to the extent of an inconsistency, and paragraph (b) defines away most of the inconsistency:

For purposes of this section, a State statute, regulation, order, or interpretation is not inconsistent with the provisions of this part if the protection such statute, regulation, order, or interpretation affords any consumer is greater than the protection provided under this part.

Minnesota’s rule reaches more sellers than the federal rule does. On the text of § 464.4(b), the broader state protection stands.

The one fee this article does not decide

A credit-card surcharge is its own regime. Minn. Stat. § 325G.051 permits one, caps it at five percent of the purchase price, dictates the disclosure by channel, bars it outright on the seller’s own branded card, and provides a civil penalty of not more than $500 plus a refund to each buyer. That statute has nothing to do with subdivision 1a and its remedy structure is different. I walk through the text of it in Annual Fees, Card Surcharges, and Getting Out of a Gym Contract in Minnesota rather than re-analyze it here.

So: which fees are actually in scope

Put together, the fee most likely to have belonged inside the displayed price is a percentage or flat charge that appears on essentially every order, that is labeled processing, convenience, service, technology, platform, order or administrative, that you first saw after the price that brought you in, and that was charged on or after January 1, 2025. The fee least likely to be a problem is one you could genuinely have avoided, one that is a government tax, one that is actual postage, one from a delivery platform that showed you the amount at item selection, or one from a seller inside a subdivision 1b exemption.

That is a reading of a twenty-month-old statute, quoted from the Minnesota Office of the Revisor of Statutes and checked on September 18, 2026. It is a description of the machinery and not advice about your order, your receipt, or your charge — nobody here has seen your documents.

Minnesota Junk Fees is published by Madgett Law, LLC. We are a law firm, and we are evaluating whether Minnesota fee practices of this kind can be challenged on behalf of the people who paid them. If you were charged a fee like this at checkout on or after January 1, 2025, the call-out below says what documents make that possible to evaluate.