Last week, Subscription Insider outlined four business considerations your subscription business should be mindful of when incorporating a trial offer to your subscription or membership product.

Business decisions aside, how you set up your trial offer, how you disclose elements of that offer in your marketing copy, and how your financial operations manage money related to a free trial offer each have potential legal implications. For example:

1.      If the trial is provided for free with an automatic charge after the free trial (“free to pay conversion”), New York law requires that a notice with specific disclosures is sent to consumers within certain time periods noted in the statute prior to hitting their card for the first payment.

2.      If your subscriptions are based on a freemium model, be careful not to over tout the premium services to those who have not yet paid, as to do so could be deemed a ‘bait and switch’. Similarly, if you are going to upsell a premium service, confirm that the consumer has signed up for the basic free service before you offer the upsell.

3.     Do not charge ‘early’ or send an invoice with a due date before the free time period is up.

4.     Adequately disclose when and how the consumer can cancel before clicking “submit”.

5.      If you are holding a pre-authorization of funds during a trial period, additional disclosure may be required.

Every business is unique. We recommend that your legal team review any trial offer, business process, and financial operational details for compliance with applicable law. 

If you have any questions on this?  Please do not hesitate to reach out.