Federal Trade Commission Rules on Junk Fees

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By Ronnie Miles, NGCOA, Senior Director of Advocacy



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Brace yourselves for a regulatory shift that could reshape how you market fees and charges. The Federal Trade Commission (FTC) has proposed the "Trade Regulation Rule on Unfair or Deceptive Fees," aiming to enhance transparency and protect consumers. How will this rule impact the golf industry? While it will broadly impact the entire business community, the golf community will mostly be impacted by their resort fees and surcharges for credit card transactions currently being charged.

The proposed FTC rule seeks to eliminate unfair or deceptive practices related to fees, ensuring that consumers have clear and accurate information about theย total cost of a product or service. For golf courses that often charge additional fees, this rule could significantly impact the way you communicate and market your pricing structures.

Resort fees have been common in the hospitality industry, including golf courses associated with resorts. These fees often cover amenities beyond the basic green fee, such as access to practice facilities, tee time preference, locker rooms, or special events. The proposed rule requires transparent communication of such fees, urging golf course owners to clearly disclose what is included in the resort fee and how it contributes to the overall experience.

To comply with the rule, consider revising your marketing materials, website, and any other platforms where you communicate pricing information. Provide a detailed breakdown of resort fees and ensure customers understand the additional value they receive in return.

Another key aspect of the proposed rule is its focus on credit card surcharges. Golf course owners encounter transaction fees associated with credit card payments; some pass these costs on to the customer. The proposed rule demands clarity in communicating these surcharges to prevent deceptive practices.

The proposed rule also impacts restaurants. Do you require a minimum service charge for small-group diners or parties? Are these service charges levied instead of tips? The restaurant must disclose these fees to customers on their online and printed menus.

If your golf course imposes surcharges for credit card transactions, it's essential to explicitly state this in your pricing information. Clearly articulate the percentage or fixed amount associated with credit card surcharges, whether on your website, at the point of sale, or on promotional materials. Failure to do so may result in penalties and damage to your business's reputation.

Actions for Compliance

  • Update Marketing Materials: Review and update all marketing materials, both digital and print, to ensure compliance with the proposed rule. Clearly outline resort fees and credit card surcharges, leaving no room for ambiguity.

  • Train Staff: Educate your staff about the new regulations, emphasizing the importance of transparent communication regarding fees. Ensure that everyone involved in customer interactions is well-informed and can address inquiries effectively.

  • Revise Billing Practices: If your golf course imposes credit card surcharges, revise billing practices to accurately reflect these charges. Implement systems that clearly communicate the added costs to customers during the transaction process.

While the proposed FTC rule on unfair or deceptive fees may initially pose challenges for golf course owners and operators, embracing transparency in fee communication ultimately benefits both businesses and consumers. By proactively complying with the rule, golf courses can build trust, enhance customer satisfaction, and thrive in an industry where clarity is paramount.

As with any rule released by the Administration, we anticipate legal action following the release of their final rule. NGCOA will continue to follow this issue and provide newsworthy updates.

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