1-800-Flowers to Pay $375,000 in New York Automatic-Renewal Settlement
Jul 24, 20261-800-Flowers.com has agreed to pay $375,000 in penalties, fees and costs, along with restitution to certain consumers, to settle a New York investigation into the enrollment, renewal and cancellation practices used for its Celebrations Passport membership program.
The annual membership offers free shipping and no service charges on eligible products, along with special savings and other benefits. It covers brands including 1-800-Flowers, Harry & David, Cheryl’s Cookies, Shari’s Berries and Personalization Mall.
Most of the enrollment practices described in the agreement date from February 2021 through June 2022, with some mobile and email practices continuing into late 2022 or 2023.
According to the New York Attorney General’s findings, consumers were offered the membership on product pages and during checkout. At one point, the offer promoted “One Full Year FREE Shipping for $5.00 more.” That amount represented the difference between the membership price and a service charge already calculated for the purchase.
The Attorney General found that the offer did not prominently disclose the full membership price, automatic renewal, cancellation requirements and other material terms. Some information appeared in fine print, linked terms, pop-up boxes or behind an information icon.
The findings cite New York Executive Law § 63(12), New York General Business Law § 349 and the state’s automatic-renewal law under General Business Law § 527-a. They also cite the federal Restore Online Shoppers’ Confidence Act.
The agreement refers to the FTC’s 2021 Negative Option Enforcement Policy Statement when discussing disclosure, consent and cancellation requirements.
1-800-Flowers neither admitted nor denied the findings.
Problems Extended Beyond Enrollment
The investigation examined what happened after consumers joined the program, including confirmation emails, renewal reminders, cancellation requests and refunds.
According to the agreement, new members received three emails shortly after enrollment. For portions of the period reviewed, those messages did not clearly present the automatic-renewal terms, cancellation policy or instructions for canceling.
The company sent reminders 31 days before annual renewals. Earlier versions did not disclose every cancellation method, the deadline for avoiding the next charge or the option to turn off automatic renewal while keeping benefits through the end of the paid term, according to the Attorney General.
The difference between canceling and turning off automatic renewal also created confusion. Canceling immediately ended a membership and its benefits. Turning off automatic renewal allowed members to keep their remaining benefits without renewing.
Customer service records showed that some representatives turned off automatic renewal when consumers asked to cancel and receive a refund, according to the agreement.
Settlement Requires Changes
Under the settlement, 1-800-Flowers must clearly disclose the initial price, renewal price, membership term, benefit limitations, renewal timing and cancellation conditions near the point where consumers accept the offer.
The company must also:
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Obtain separate consent to automatic renewal
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Send a post-purchase acknowledgment with specific renewal and cancellation information
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Provide an online cancellation process that is at least as easy to use as enrollment
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Automatically begin the refund process when consumers cancel and are eligible for refunds
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Explain the difference between canceling and turning off automatic renewal
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Allow consumers who aren’t receiving refunds to keep benefits they have already purchased
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Send renewal notices 15 to 45 days before automatically renewing subscriptions other than monthly plans
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Designate an employee responsible for compliance
In addition to the $375,000 payment, eligible New York consumers who purchased memberships during specified periods and filed qualifying complaints may receive a full refund of their most recent membership fee.
Other eligible New York consumers whose memberships renewed for a second year may receive $20 if they did not use the program’s shipping or service-fee benefits during either year, other than on the initial purchase. Certain consumers elsewhere in the United States may receive $20 if they did not use the free-shipping benefits at all.
Consumers who already received applicable refunds are excluded. The agreement requires restitution to be issued within 180 days of its effective date.
Insider Take
What makes this settlement especially instructive is the precision with which the Attorney General examines language throughout the subscription experience. “$5 more” is not the same as disclosing the full membership price. “Free shipping” is not the same as free shipping only on eligible products. Canceling a membership is not the same as turning off automatic renewal.
To subscription professionals, those distinctions may seem overly technical or even obvious. We work with these terms and systems every day. Consumers don’t necessarily understand the differences. This agreement suggests the Attorney General doesn’t expect them to.
For Subscription Insider Members
This settlement cites both New York and federal subscription requirements. Members can review the related briefs and follow this enforcement action in: