We mentioned in our article on the changing subscription ecosystem that a new player has emerged on the subscription scene in the last few years – government regulation.
These types of changes have tended to start in Europe first, and make their way to the US, and while that’s true this time as well, the FTC is hot on the heels of their German counterparts in proposing rules that ensure subscription management is very customer friendly.
The key piece to be aware of in these changes is that cancellation needs to be easily accessible for customers. This rule applies to both digital and physical products putting cable subscriptions, gym subscriptions, and Netflix subscriptions on equal footing. The days of chasing down the gym manager at a specific location at a specific time are coming to an end, but the burden of the tooling to ensure that cancellation and subscription management is easy continues to fall on the business.
A bevy of renewal rules went into effect in Germany in 2022 around cancellations as well, and you should make sure that your business is compliant with these rules if you’re selling to German customers.
Another important rule to consider is to ensure that your customers are aware of the terms of a subscription upfront. This can be handled easily by making sure that your terms and conditions statement is located before your “Subscribe” button in your checkout flow. But if your billing provider doesn’t allow you to do this today – then be wary of potentially being out of compliance with this requirement.
As the subscription economy continues to grow, customer complaints and bad actors will also grow pushing government to act through more regulation. Having to build more elements to support your subscription business as opposed to focusing on your core business is always a frustrating experience.