Monica Eaton, Chargebacks911 CEO and Founder, shared a few insightful perspectives on a new rule implemented by the FTC in a guest feature for Entrepreneur.
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“Arguably, the most significant change would be that merchants would be barred from making services a pleasure to subscribe to and a pain to cancel,” Monica explains, regarding the new rule. “In practice, this means that fitness centers and newspapers can't force consumers to mail a letter or wait on hold for hours to get rid of a subscription. Instead, the cancelation process must be as simple and frictionless as the initial checkout flow.”
It’s true that this new imposes new responsibilities on merchants. But, the rule could be a benefit nonetheless, as its requirements are in line with best practices anyway.
“The logic here is that cardholders stuck with difficult-to-cancel subscriptions will file chargebacks in response. Merchants who embrace the FTC's new rule could indeed see more cancellations. But that's in lieu of receiving chargebacks from customers who feel ‘trapped’ in unwanted subscriptions.”
