August 18, 2016 | Authored by: Vindicia Team Blogs
When customers can't cancel subscriptions
To operate effectively on a subscription business model, companies must accommodate their customers at every corner. These businesses need to deliver an excellent product and make it easy for customers to submit payments. What's more, canceling a service should be just as simple. If it isn't, customers who want to leave will quickly become dissatisfied. As a result, they're more likely publicly disparage the company and dispute any charges with their bank.
The Trump campaign and recurring billing
To see an example of bad subscription payment practices in action, one only has to look at the world of politics. Early in August, an anonymous, former Donald Trump supporter sent a message to CNN reporter Jeremy Diamond, who then tweeted a screenshot of the complaint. In the message, the unknown person explained he or she set up recurring payments via Trump's website. Like many, the person became frustrated with several of the presidential candidate's recent statements. The person tried to cancel future payments but couldn't figure out how to do so online.The donor finished his or her message expressing hope that the email would bring media coverage to the situation and ultimately result in a resolution.
Mic investigated the anonymous person's claims, setting up a recurring donation of $1 and then attempting to cancel it. After the donation was made, the Trump website provided no link or instructions on how to cancel future payments. The confirmation email also offered no help. The only hint was a link that said "Update Card" which, when clicked, did not allow users to remove their payment information. They could only change their credit card number. When Mic reporters tried putting in a false number, the website didn't accept it.
"Customers shouldn't have to resort to contacting news publications to cancel their payments."
What happens when businesses make cancellation difficult
Trump's website is an example of poor subscription business practices. Customers shouldn't have to resort to contacting news publications to cancel their payments. The information they need should be readily available, and the exit process should be quick and painless. If not, customers will have no other choice but to dispute the charges, as CNN pointed out.
"Ideally the credit card issuer would be able to decline the next transaction before it hits my statement," Sean McQuay, a credit card expert at NerdWallet, told CNN.
Too many chargebacks has harsh consequences for a company, resulting in lost donations or revenue, higher fees and poor relationships with acquiring banks. Offering a clear way to cancel subscriptions minimizes the risk of chargebacks and can actually increase customer retention. It shows a business prioritizes customer service and won't resort to deceitful practices for the sake of profit.
Best practices for canceling subscriptions
The more transparent businesses are when it comes to canceling subscriptions, the better. The most consumer-friendly organizations put an obvious link on their customer account pages that, when clicked, starts the process of canceling a service. For example, Spotify has a short statement that reads "Would you like to cancel your subscription?" right below the button to update payment details. This message is short and easy to grasp, so customers aren't misled.
The process itself should take one to two steps and instantly remove a person's payment information from the company database. Not processing canceled subscriptions immediately increases the risk of chargebacks.
When it comes to subscription services, customer satisfaction is key. Businesses must make sure all aspects of the customer experience, from creating an account to cancellation, are fast and effortless.
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