Beyond the Checkout: Retail's 2026 Legal Minefield

2026 will be a significant year for retailers and e-commerce companies, with significant changes on the horizon that will affect the entire industry and ecosystem. Potential headwinds and developments in product safety, pricing, artificial intelligence, data privacy, website compliance, and environmental responsibility are expected. But amidst these changes, there are likely significant opportunities that retail and e-commerce businesses can capitalize on.

Below are the top issues retailers and e-commerce companies should be aware of and ready to tackle in 2026.

Product Safety

We anticipate substantial regulatory activity and potential litigation in the following areas:

• CPSC enforcement intensifying: The Consumer Product Safety Commission (CPSC) is undergoing leadership changes. This has created uncertainty about the CPSC’s future direction. Despite this, the CPSC is intensifying its enforcement actions, pushing recalls, increasing monetary penalties for failure to disclose or late disclosures under Section 15(b) of the Consumer Product Safety Act (CPSA), and using criminal enforcement to make examples of companies. Now is the time to consider your product safety and compliance program.
• E-Mobility and lithium-ion battery safety: The CPSC continues to prioritize safety concerns related to e-mobility devices and lithium-ion batteries. These issues are gaining attention as they intersect with broader health and social concerns. Relatedly, the European Union has begun taking a more aggressive approach, and the U.S may follow. If you use or make such products, you need to ensure your products meet all current regulations and standards.
• State-level consumer product regulations: In the absence of federal enforcement, state attorneys general have picked up the enforcement mantle in areas concerning consumer protection and consumer deception. For example, with respect to issues not addressed by the FDA or CPSC, state attorneys general are focused on consumer product safety; Washington, Minnesota, and California are implementing their own regulations on consumer products. These include restrictions on lead, cadmium, and per-and-polyfluoroalkyl substances (PFAS). Our nationwide state attorneys’ general practice is tracking the biggest trends and enforcement efforts across these offices; handling state CIDs, investigations, and litigations presents different issues from those that arise when responding to a federal inquiry.

Tariffs

Tariffs will continue to have a big impact and may be changing significantly in the coming year, affecting importers, exports, and others in the supply chain.

• International Emergency Economic Powers Act (IEEPA) decision: The Supreme Court’s decision on Trump v. V.O.S. Selections, Inc. is still pending. The decision will have a significant effect on the tariff landscape moving forward. The dispute focused on whether IEEPA provides a sufficient basis for imposing tariffs during a declared emergency and, if it does, if that authority is consistent with the nondelegation doctrine. The decision could result in the current tariffs remaining in place, a complete overhaul of the tariffs, or a partial overhaul. If the tariffs are found to be unlawful, importers who paid them may be able to seek a refund.

Pricing

Pricing will continue to be a major area of concern in the coming year with the FTC and state attorneys general continuing their focus on pricing transparency, dark patterns, and the effects of algorithmic pricing. What may be new and different in the coming year is a movement from analyzing these practices from an anti-competition standpoint to a consumer deception and consumer discrimination standpoint. Retailers should review their pricing strategies to ensure they comply with federal and state laws. Here are some of the issues related to pricing to consider:

• Scrutiny on strike-through pricing: Retailers are facing increased enforcement actions regarding false discounts, fake discount timers, and strike-through pricing practices. The Federal Trade Commission (FTC), attorneys general, district attorneys, and private plaintiffs are all actively pursuing cases involving pricing transparency. Several states have specific laws on strike-through pricing.
• Algorithmic pricing: New York now requires explicit disclosure if a price was set by an algorithm based on the consumer’s personal data. California has passed legislation imposing civil and criminal liability if algorithmic pricing results in unfair practices or horizontal collusion, lowering pleading standards, and adding liability for coercing another to adopt algorithmic pricing prices. Consumer protection offices within state attorneys general will consider whether algorithmic pricing violate state consumer deception and UDAP laws.
• Personalized pricing: Regulators are likely to focus on personalized pricing in 2026, as it sits at the crossroads of pricing transparency and algorithmic pricing. Personalized pricing — offering different consumers different prices or discounts based on their personal attribute — may violate federal and state consumer deception laws and disclosure laws. And to the extent personalized pricing is based on protected classes, or proxies therefore, we can expect regulators to pursue actions based on anti-discrimination laws.
• All-In pricing legislation: All-in pricing, pricing transparency, and anti-junk pricing laws will continue to be a hot issue in the coming year as more states follow California and other states and legislate in this area. For example, California law requires retailers to disclose all required fees and charges in the advertised or listed price. Government taxes and fees, optional fees, and reasonable shipping costs, though not handling, may be excluded. A newer 2025 exception allows food vendors to exclude mandatory surcharges from the advertising price, but those vendors must conspicuously display the charges elsewhere, such as in advertisements and on menus. Retailers and e-commerce companies that operate in multiple states will need to ensure pricing displays conform to the law of the strictest state in which they operate,  ensuring price tags in brick-and-mortar stores comply as well. Does this put you at a disadvantage vis-à-vis local stores and operators?

Artificial Intelligence and Data Privacy

AI is not going anywhere. And with the growth of AI comes the additional use of data to power these new technologies. Retailers should pay close attention to the laws and legal developments around the use of AI and data, including the following:

• Impending legislation on AI bots: California and New York have passed broadly worded chatbot legislation, the full scope of which remains to be seen. Proposed federal chatbot legislation is currently focused on minor safety, although an advocacy group is promoting another proposed legislation to create a chatbot private right of action.
• Data privacy and AI tools: Supply-chain vendors are asking more and more each day to use the data they process on your behalf to train and develop their own AI technology. As AI tools become integral to shopping experiences, you will need to develop policies around the appropriate use of data collected from customers.
• CIPA liability: The California Invasion of Privacy Act (CIPA), originally passed to prevent unlawful wiretapping, has been expanded through litigation to impose liability for websites collecting and sharing user data. We anticipate this litigation to continue, and with it, the risk of statutory damages for the alleged misuse of website visitor information.

Gift Card Fraud

Multiple types of gift card fraud are becoming more and more common and catching the attention of several state attorneys general.

• Payment via gift card fraud: This type of fraud involves scammers communicating with a consumer and pretending to be someone the consumer should urgently give money, anyone from the government to a family member or friend in trouble or tech support for a device. Scammers tell consumers they must buy gift cards to pay them, then instruct the consumers to hand over the card numbers and PINs. To help prevent this type of fraud, it is important that retailers provide consumers with information about scams and contacts where they can report scams.
• Tampering and draining scams: These scams involve scammers tampering with unpurchased gift cards. Sometimes they steal the codes before the card is purchased. After the card is activated, the scammer can access the account and takes the money on the card. Another version involves scammers replacing the barcode on unpurchased cards to directly divert funds into their own accounts. Consider ensuring that gift cards in physical retail locations are kept in observable areas, implementing tamper-resistant packaging for gift cards, and using advanced monitoring systems for gift card transactions to help protect consumers.

Environmental Concerns

Finally, California’s environmental regulatory framework places significant legal obligations on retailers. We expect these to remain relevant in 2026:

• Compliance with EPR Laws: California's Extended Producer Responsibility (EPR) laws for textiles require producers to become members of a producer responsibility organization (PRO) by mid-2026. California’s EPR laws for plastics and packaging begin to charge fees for materials covered by the law and require participation in PRO recycling plans by 2027. Other states are also actively implementing EPR laws, particularly for plastics and packaging.  
• Proposition 65 and BPS receipt compliance: Did you know that the receipts you issue at the point of sale must comply with Prop 65? The Office of Environmental Health Hazard Assessment (OEHHA) has issued guidance on compliance with Proposition 65 regarding bisphenol S (BPS) in receipts and tags. Consumers must be warned of exposure to BPS and must be warned before exposure happens. The OEHHA also recommends BPS-free alternatives such as electronic receipts or phenol-free paper.
• Greenhouse gas emissions reporting requirements: By mid-2026, subject to ongoing litigation, large companies doing business in California must comply with new greenhouse gas emissions and risk reporting laws. Reports must be filed with the State Air Resources Board. The climate-related financial risk report also must be publicly available on the covered entity’s website.

Conclusion

Keeping up with legal developments is essential for retail businesses to manage risks and run smoothly in an ever-changing landscape. We recommend reviewing your current practices and reaching out if you have questions or need specific advice on how these changes may affect your operations.

Crowell would like to thank Audrey Nankervis for her contribution to this alert.