Dear Race Directors,
On Tuesday, we shared an update via email, explaining that UltraSignup will be making changes to the pricing display across the platform in order to comply with California’s new SB 478 and to stay ahead of changing consumer expectations.
Runners will now see a single price for a race or product on UltraSignup, inclusive of fees and taxes. In the customer’s cart, fees and taxes will be broken out into separate line items. Visit the Help Page to see how this will look.
California is not an isolated example, and neither is our industry or the marketplace model, this change is being felt nationwide with broad implications for many businesses. You will see changes implemented across other businesses and platforms as well. Minnesota has recently passed a similar law which will go into effect next year, other states are considering their own legislation. Finally, the FTC has proposed similar regulations with the support of 19 state Attorneys General and counting. This movement has been driven by increasing numbers of bad actors who have intentionally obscured mandatory fees from consumers. The model for the UltraSignup race fee is markedly different from these bad actors, yet we are still required to meet new levels of compliance and match consumer expectations.
The UltraSignup Model
Often, the public discourse tends toward phrases like “junk fees” or dishonest pricing. This is a response to the fact that in recent years, more and more businesses have intentionally obscured mandatory surcharges and fees. UltraSignup operates on a fee-based business model, however this transactional fee is markedly different from the numerous unexpected fees that consumers have become subjected to in other businesses. We have always strived to be honest and up front about the UltraSignup fee and will continue to do so in a new way with our updated all-in pricing display.
As we modernize the UltraSignup platform, we are eager to stay ahead of and maximally compliant with best practices to support both runners and race directors. The UltraSignup fee funds the business operations, investment in the platform’s future, and efforts to support and grow trail running as a sport.
Visit the UltraSignup Help Site to see how the new fee display will look as of July 1 and for FAQs and guidance for how you can stay compliant.
Background - Nationwide Trends
Over the last several years, there has been a growing consumer demand for additional visibility towards any mandatory fees. This trend has emerged in response to increasingly high fees that have been implemented by marketplaces like AirBnB and Ticketmaster, as well as some in-person businesses such as restaurants. Many businesses have intentionally obscured mandatory fees from consumers until the end of the check-out process, resulting in a much higher cost than initially anticipated and leaving the customer with a sense of distrust.
The Taylor Swift Effect: Consumers felt immense frustration in 2022 when difficulties arose around purchasing tickets for Taylor Swift’s Eras tour, and one source of those frustrations were the additional platform, venue, and other fees Ticketmaster attached at the end of the check-out process. Together with bots and resellers driving up costs, the experience was heavily covered by the media and has been counted as a catalyst for the new movement around all-in pricing. As a result, the recently passed Minnesota law - House File 1989 is referred to as the “Taylor Swift bill.”
Not Only Marketplaces or Tickets: Restaurants have been singled out as sources of consumer frustration, where unexpected fees are charged at the end of the check-out process, typically after a customer has been served. In the hospitality industry, service fees have long existed, but in recent years they have been on the rise among hotels, airlines, car rentals, and more. The practice of increasing costs via hidden fee has even been adopted by apartment complexes and on utility bills.
What Now? Resulting Changes
California - All Pricing Displays Must be Compliant: These new regulations require all displays of pricing to be compliant. This includes any pricing that a race director may display on their website, social media channels, or email campaigns. The new rules are not limited to “buyers” of your products, but rather to any consumer in California (whether physically located there or not – i.e. this would include a California resident traveling for business in another state interacting with a social media post.) We are assisting with compliant pricing display through our platform, but race directors need to ensure that they are compliant with pricing display in all off-platform situations.
Nationwide Impact: When thinking about California SB 478, you may ask the very logical question of whether this rule only applies to California companies or for products being sold in the state of California. Unfortunately, that is not how the law is constructed. Rather, the focus of the law is placed on displaying a price (regardless of the location of the business) to a California resident. It is very difficult, from a technical perspective, to with 100% certainty, limit the display of pricing to only California residents. For a non-California company to be compliant with this rule, they would have to ensure that no California resident can interact with incorrect pricing through any digital channels – UltraSignup, their website, email campaigns, or social channels. The California rule has a broad reaching impact and as stated above, is expected to be followed quickly by other states, as we have already seen with Minnesota.
The Federal Government’s Approach
In late 2022, the White House issued a briefing detailing how President Biden was calling on federal agencies to “reduce or eliminate hidden fees, charges, and add-ons for everything from banking services to cable and internet bills to airline and concert tickets.” Price transparency enables consumers to effectively shop for the most competitive price available for goods and services. If allowed, businesses that increasingly obfuscate more and higher fees could have a negative impact on the market economy as a whole.
As of June 2023, both the US Senate and the US House of Representatives introduced bills specifically addressing how marketplaces and resellers display pricing for event tickets. In May 2024, the House of Representatives passed bill HR 3950 and put it in front of the Senate for consideration.
In October of 2023, the FTC proposed a new rule to prohibit delayed displaying of fees. This rule is also supported by the Consumer Financial Protection Bureau (CFPB), the Federal Communications Commission (FCC), the Department of Housing and Urban Development (HUD), and the Department of Transportation (DOT) and 19 state Attorneys General from around the country.
Questions We Can Help With?
If you have any questions or would like to discuss the upcoming changes, please contact us to speak with our Member Operations Team.
Visit the UltraSignup Help Site.to see how the new fee display will look as of July 1 and for FAQs and guidance for how you can stay compliant.
We will continue to issue more detail about the display and update our FAQs over the next several days.
Most Sincerely,
Jay, David and the UltraSignup Team
