Lessons Learned©: Some Best Practices for Subscription-Based Businesses

To avoid litigation or civil penalties for subscription-based businesses for products or services sold as automatic renewal or continuous services (including those that offer a free gift or trial offers), the business renewal offer must include a clear and conspicuous explanation of the price that will be charged.

As such, subscription-based businesses should consider implementing the following best practices:

  • Use “clear and conspicuous” language, especially when communicating cancellation policies to consumers.
  • Inform consumers of cancellation policies and any instructions for cancellation in “clear and conspicuous” language prior to consumers purchasing any goods or services.
  • If the offer also includes a free gift or trial, the business is required to disclose how the consumer can cancel the service prior to getting charged or before the expiration of the promotional rate.
  • Ensure that cancellations are relatively easy for the average consumer to accomplish.
  • Make sure there are procedures in place to receive consumers’ affirmative consent prior to charging consumers.
  • If the offer is made online, the business must allow the customer to cancel online.