People tend to enjoy the use of subscription programs that deliver goods and services directly to the home or place of business. While subscription plans are convenient and universally liked, using subscription services can also be tricky territory. People may lose track of their subscription programs and ultimately pay for things they don’t want, need, or use. And, if not careful, consumers may be misled and taken advantage of – so the monitoring of subscriptions is a must!
What exactly are subscriptions?
Subscriptions are recurring payments for goods and services. In this process, a company generally bills a customer an agreed-upon fee due at set intervals of time, often monthly, for goods received or services provided. Examples of subscription plans include those for music, television, food meal kits, wellness products, fashion boxes, and eCommerce, just to name a few.
What are eCommerce subscriptions?
eCommerce subscriptions involve the trading of goods and services on the internet. Amazon Prime is an example, and trial or paid membership is involved. eCommerce businesses provide access to stores and offer perks such as exclusive shopping, discount pricing, free shipping for “members,” deals and more.
Subscription services are widely used in the USA!
Subscription services are a major part of the U.S. economy. Per Forbes Home, 99% of all U.S. households pay for at least one or more streaming services, with Netflix, Amazon Prime Video, and Apple TV + topping the charts.
We like them, so what’s the problem?
Subscriptions are generally convenient, and many are 100% worthwhile. With that said, a few can pose problems for consumers.
What are some concerns?
Subscription programs can bleed money from folks who are not careful. For example, customers may sign up for subscriptions and totally forget about them or fail to adequately use them. Thus, customers are essentially paying for goods and services they are not using.
Test run!
Potential customers may also sign up for trial subscriptions. This is generally done to test out products or services to see how well they are liked – or to get “bonus” perks. However, when potential customers fail to cancel, they are essentially on the hook for the subscription until their cancellation process is completed.
So annoying!
Unfortunately, some corrupt businesses make it notoriously difficult to cancel subscriptions. For this reason alone, the FTC has plans underway to increase consumer protection as it relates to subscriptions.
The big push!
Fortunately, there is a newer push for businesses to provide one-click cancellations, which may someday make it easier for customers to cancel their subscriptions quickly and easily. Note that some lobbyists oppose the “click-to-cancel” regulation as many “talk consumers” into keeping their subscriptions – a persuasive tactic used to retain customers or to change or increase customer usage of services.
Do these wise things:
Consumers can help protect themselves from losing money to unwanted subscriptions.
Here are four examples:
- Be selective in what subscriptions you choose. Some unscrupulous businesses may use subscription tricks and traps, such as making consumers jump through numerous hoops to cancel or simply by ignoring cancellation requests. These poor business practices are designed to rip off consumers. Thus, it’s vital to work with reliable subscription-based businesses only and report those who behave unethically to the FTC.
- Watch for trial periods that end with you automatically signing up. Should you want to explore a product or service, and you desire the trial period, understand all terms including how and when to cancel. Then set a reminder on your phone or calendar so that you do not forget to cancel in time should you wish to ultimately decline the subscription. Failure to cancel on time can result in unintended fees, so if you wish to cancel, do not put it off.
- Understand the billing, payments, and delivery service infrastructure. This provides clarity of cost and expectations. Do not hesitate to do your homework to understand the terms of the agreement before committing to subscriptions. It’s also helpful to get everything in writing as proof of your agreement. Avoid committing to things that obligate you financially for the long term.
- Review your subscriptions monthly. This allows you to monitor your subscription usage as well as keep up with changing needs. The best way to review subscriptions is to keep track of them regularly and watch for those that permit rises in cost. Check subscriptions monthly at minimum – and keep only those you want, need, and use. Note that many subscriptions automatically renew – so it’s up to you to pay attention. Monitoring can be done by creating your own list of subscriptions to supervise or by using an app designed to track and even cancel unwanted subscriptions.
The FTC cares…
In addition to the simple cancellation mechanism as proposed by the FTC, the agency is also newly pushing for a requirement regarding reminders and cancellations. Per FTC.gov, the new rule, “…would require sellers to provide an annual reminder to consumers enrolled in “negative option” programs involving anything other than physical goods before they are renewed.” They state, “Such reminders must identify the product or service, the frequency and amount of charges, and the means to cancel.” Note that negative option programs are generally those in which customers are given goods and services that were not previously ordered and for which they must continue to pay unless they decline in advance. The goal of the FTC is to protect consumers and industries from unfair practices and reduce the number of subscription related complaints that pour into their agency.
This article is for general informational purposes only.
