Almost every day, we hear about new regulatory changes surrounding negative option marketing, subscription marketing tactics, and subscription cancellations. Of course, the Federal Trade Commission reigns supreme, and states are finding their way through their own laws. Your compliance officer or legal team should stay on top of any changes coming your way.
But don’t wait for new rules and regulations to be imposed before you examine your own business processes for subscription cancellations. We highly recommend that subscription companies be proactive, and do what’s right for their subscribers whether or not it is the law (yet) where they do business.
A cancellation hassle – a personal story (TL;DR)
A year ago, I tried to cancel a subscription beverage service that I was no longer using. I couldn’t find an easy way to cancel on the company’s website or a convenient way to contact them, so I completed a Contact Us form on their website. I also tagged them in a tweet to get their attention. I eventually had an online chat session with a customer service rep, or a bot, who did their best to preserve the business. They agreed to pause my subscription for three months. After that, I would have to return to the website prior to my credit card being charged $60 each month to skip the next shipment. I paused it for nine months.
Over the holidays, things got hectic, and I forgot to pause my subscription, my credit card was charged, and I now had $60 in credits to use toward the company’s products. I went through a more complicated cancellation process on January 4. I filled out an online form and again had to chat with an agent. I told the agent three times that I liked their products, but no longer used them, and wanted to cancel. They eventually agreed to let me cancel, and they confirmed the cancellation via email. They also sent me a copy of the chat transcript. Yay! No more unnecessary charges. Or so I thought.
However, I had that credit to use, so I logged into my account and made my purchases. I received the shipment on time and was pleased with what I received. Nonetheless, I had no plans to reactivate the subscription. Imagine my surprise when my account was charged on February 8 for $60. I emailed the company and got no response. I went to the company’s website to find a phone number to call, but the website said they are not accepting phone calls at this time because of the pandemic. I could, however, text them at a phone number, and they would contact me that way. So I texted them. They replied to my text by asking asked for my email address and the back-and-forth began.
I sent them screenshots of the cancellation email and the chat transcript. The company didn’t apologize. They said that, when I used my credits, I reactivated my subscription. No apology for any fine print I missed or any miscommunication on their part. It was my fault. They confirmed my cancellation (again) and refunded my $60 which I am still waiting for.
This should never have happened. I may have, indeed, missed some fine print that told me I was resubscribing by virtue of making a purchase. I don’t think I did, but I am willing to give them the benefit of the doubt, so I’m not naming names here. After all, an honest company wouldn’t have tried to trick me into staying, would they?
A better way to handle it would have been to say, “Ms. Neuts, we are so sorry for any miscommunication or misunderstanding. We will cancel your subscription and issue a refund immediately. We apologize for any confusion.”
In the end, I got what I wanted. But they didn’t. They now have a former subscriber who will NEVER come back, even if they are the exclusive seller of a product I love. I will also tell some friends who might have been future referrals. They not only lost me as a customer, but they lost any potential subscribers I tell about my experience.
That’s a long way of saying, every move you make along the customer journey matters, even the cancellation of a long-time subscriber. I offer these cancellation best practices, culled from some of our best advisors.
Cancellation best practices
Clear and conspicuous terms and conditions
- Ensure that your subscription’s terms and conditions, including its auto-renewal and cancellation policies, are clear and conspicuous. Attorneys Lisa Dubrow and Marc Roth, frequent columnists for Subscription Insider, said at Subscription Show 2021 that clear, conspicuous language should be easily noticeable, difficult to miss, and easily understandable by ordinary consumers.
- The FTC says clear and conspicuous rules are violated if the terms and conditions are in fine-print footnotes, fleeting TV superscript, hyperlinks (More, FAQs, or Important), a separate terms and conditions page, below the More on social media posts, bottom or side of a website, pre-checked boxes, or after the consumer has committed to the offer.
- Examples of making text clear and conspicuous include using larger text; using color contrast between the text, background and surrounding text; and setting off the text from neighboring text with symbols or other markings.
- Bold headers and boxed texts can be acceptable ways to make terms and conditions stand out from the surrounding text and visual elements if they are legible and appear above the Submit button.
- A hyperlink is not clear and unavoidable, nor is it clear and conspicuous. It requires a reader to click to another page, or section of a page, to review a company’s terms and conditions.
- Terms and conditions should be included on the same page as the submit button or the page where credit card information is collected, but not before. It is ideal to put it all on one page, but the terms should appear before the credit card information, so a prospective subscriber is not committing to the offer without being presented with the terms and conditions. The consumer should be able to make an informed decision, particularly with automatically-renewable subscription products and services.
- Terms and conditions should not be contradicted or mitigated by, or inconsistent with anything else in the subscriber communication.
- Text should appear ABOVE the submit button, not as an afterthought.
Ease and timing of subscription cancellations
Dubrow and Roth also shared these best practices for the ease and timing of cancellations.
- Make it obvious how a subscription or membership can be canceled.
- Don’t make a subscriber jump through too many hoops or go through too many save attempts before allowing them to cancel.
- Offer a “no, thank you” option during save attempts, so the subscriber can always get out.
- Do not make cancelation difficult for consumers or invent obstacles to overcome when they attempt to cancel.
- Save attempts are fine, but don’t tack on additional auto-renewable subscriptions while the subscriber is trying to cancel the initial subscription.
- Disclose when a subscriber has to cancel to avoid a charge.
“Give your customer representatives power. Tell them to let you know if there are issues that are coming up. Make sure that they can help consumers cancel. Make sure you make it easy to do it online, because now that’s required if you are signing people up online,” Dubrow said.
“You can’t be too greedy in this space,” added Dubrow. “You really have to be careful, and you need to make sure that consumers understand.”
Marc Roth said the FTC gave additional guidance in their recent policy statement.
“They did suggest you can make other offers, like another option. ‘Oh, too expensive? Maybe this,’” Roth said. “That’s fair. Just don’t have too many of those.”
Look at the cancellation experience from the subscriber’s perspective. You would want all the information needed to make an informed decision, wouldn’t you? While it seems counterintuitive to make it easy to cancel, in many places, it’s the law. Everywhere else, it is simply the right thing to do, and it could eventually have a positive impact on retention. Subscribers who cancel and who have a positive experience doing so may come back because you treated them, their time, and their money with respect.