How companies disclose prices and fees remains a hot topic. Recent years have brought new state laws, regulatory challenges, and plaintiffs’ lawsuits. The latest example is a suit against Stop & Shop filed in Massachusetts federal court this month.
According to the complaint, Stop & Shop charges a $3.95 pickup fee on online grocery orders but does not adequately disclose it until checkout. Shoppers see product prices and running cart totals as they shop, and on the Cart page the fee appears only below a “Checkout” button that customers can click without scrolling down to it.
The lawsuit relies heavily on Massachusetts’ updated fee disclosure regulation, which took effect last year. Among other things, the regulation generally requires businesses to disclose the total price of a product (including mandatory fees) when the price is first presented and to clearly disclose the nature, purpose, and amount of mandatory fees. (Click here for more details on the law.)
The plaintiff also argues that Stop & Shop does not adequately explain the fee’s purpose. The charge first appears as a generic “Fees” line. Clicking an icon next to it reveals a “Pickup Fee,” and a separate “i” icon explains only that the fee “is not a tip or gratuity” and is not paid to the pickup attendant. The plaintiff contends the regulation requires disclosure of what a fee is for, not just what it is not for.
While this case plays out, companies may want to review their purchase flows for compliance with the growing patchwork of fee laws, many of which, like Massachusetts, require mandatory fees to be included in advertised prices.
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