5 ms·

Well, the solution for most companies will be no more free trials.

dewey 7y ago
I doubt that, there's a lot of companies that have free trials without automatic billing afterwards and they are doing just fine. The alternative to not have free trials but people cancelling and wanting their money back after a week is probably more administrative work than offering a non-automatic-billing trial.
Spivak 7y ago
I mean if the reason you offer free trails is to make money on people forgetting to cancel then it’s probably best to just not offer a trail. If you’re offering a free trail to actually let customers evaluate your product then you’ll probably be unaffected by this.
- droithomme 7y ago
  A lot of good software works just like this regarding the free trial. The program works for 30 days or 10 uses or such and then disables saving until you buy it. If the software is terrible you simply stop using it. If you found it useful and want to keep editing whatever files you made with it, then you buy it. They don't tell you it is free for 30 days and then charge you at the end of the 30 days unless you figure out how to cancel it. (Often made to be a very difficult task.) Many newspaper web sites now seem to operate under this model as well, so many free articles per month as a free trial, then a paywall. Sometimes the paywall offers a second tier of free trial, like unlimited articles for a month, and then they start charging. One would argue that the second tier has to start charging automatically otherwise people could simply get a free trial each month. Not so, the free trial is tied to a credit card number and name so the person can't simply keep renewing trials forever. The card policy on trials in this case should still be to get consent before starting the subscription and charging. Many people avoid these sorts of free trials after finding out that cancelling the paid subscription is nearly impossible, sometimes requiring sending through the post a letter in a certain format to an unpublicized address. Having the policy be that consent is required would likely increase the number of people being willing to accept free trials, and the number who subsequently subscribe because they actually like the content or product and not because they got tricked by dark patterns. Many dark pattern operating content providers might have to increase their quality though to retain customers. It's not enough to have credit card policies on these things, subscriptions are so often abusive that legal reform is needed. In addition to requiring consent after the trial, auto-renewing subscriptions should never be allowed to be the only or default choice. Auto-renew should be something you have to opt in to and we need legal reform to require that disabling auto-renew must be simple, straightforward, and available.
- unreal37 7y ago
  The purpose is not to "make money on people forgetting to cancel." The fact of the matter is that many more people buy when a free trial is offered. If your competitor offers a free trial, and you don't, they get more sales than you. It's "risk reversal". Similar to a "30 day money back guarantee". People are attracted to the idea of there being no risk to trying this and not liking it. In some industries, you simply HAVE to offer it.
  - denzil_correa 7y ago
    In that case, offer a limited billing period in line with the trial time period (30 days in your example) and ask the customer for an extension at the end of the billing cycle. If your theory of "risk reversal" is true, they will extend the subscription. It's a win-win, consumers register for "risk reversal" and business get the chance to demonstrate their services.
  - benologist 7y ago
    There is a really simple workaround - if (person_abandoned_trial) { dont_pretend_they_consented_to_lifetime_billing() }
    - judge2020 7y ago
      I think a better one is to just never auto-charge after the trial, and lock down your service asking them to start a plan for the main service after the trial.
  - Jamwinner 7y ago
    Dubious ethical business practice is not somehow magically excused by the presence of competition. This attitude makes my blood boil.
    - cglace 7y ago
      Are free trials unethical? I’m not convinced.
adrr 7y ago
For physical products, it’s doesn’t make sense. You get chargebacks and high churn. You also get people who cheat the system with throw away emails. The business has to focus on catching these people and making it hard to cancel. These are things that don’t actually drive value for both the company and customer. Best decision we made at a subscription CPG startup was cut our 1st month free promo and instead focus on creating a brand through marketing and high quality products. This allowed the company to successfully exit after only 5 years. Companies that take the approach free trial approach burn their customers and get nailed by the government. A good example is a diapers subscription company that got nailed by the FTC ultimately leading to down round and giving up their subscription bundle.
criddell 7y ago
Only the companies with shitty products. Consumers will happily subscribe to services that provide something they want.
hombre_fatal 7y ago
Offer a free trial and then require the user to take further action to enable auto-renewal once the trial ends instead of preying on their forgetfulness. Bonus: Let users pay with Paypal so that you show up on their authorized organizations list so that they can revoke your access to their money without jumping through your arbitrary hoops like having to make a phone call and talk to a high-pressure sales rep just to remove your grabby paw from their cookie jar. I'll never forget the experience of canceling 24-Hour Fitness' recurring billing a decade ago. I had to schedule an appointment with their sales department in person and was berated with questions like "So, why have you decided to stop taking your body and health seriously?" by some smug prick sitting back in his chair with his feet on his desk. Such a stupid default system we have.
Marsymars 7y ago
This is already the case in certain jurisdictions. e.g. Quebec explicitly bans free trials that automatically rebill at the end of the trial period. Solution for most companies have been to offer a longer membership periods in Quebec. (e.g. Amazon Prime in Quebec is initially 13 months for $79.)

I doubt that, there's a lot of companies that have free trials without automatic billing afterwards and they are doing just fine. The alternative to not have free trials but people cancelling and wanting their money back after a week is probably more administrative work than offering a non-automatic-billing trial.

Spivak 7y ago

I mean if the reason you offer free trails is to make money on people forgetting to cancel then it’s probably best to just not offer a trail. If you’re offering a free trail to actually let customers evaluate your product then you’ll probably be unaffected by this.

droithomme 7y ago
A lot of good software works just like this regarding the free trial. The program works for 30 days or 10 uses or such and then disables saving until you buy it. If the software is terrible you simply stop using it. If you found it useful and want to keep editing whatever files you made with it, then you buy it. They don't tell you it is free for 30 days and then charge you at the end of the 30 days unless you figure out how to cancel it. (Often made to be a very difficult task.) Many newspaper web sites now seem to operate under this model as well, so many free articles per month as a free trial, then a paywall. Sometimes the paywall offers a second tier of free trial, like unlimited articles for a month, and then they start charging. One would argue that the second tier has to start charging automatically otherwise people could simply get a free trial each month. Not so, the free trial is tied to a credit card number and name so the person can't simply keep renewing trials forever. The card policy on trials in this case should still be to get consent before starting the subscription and charging. Many people avoid these sorts of free trials after finding out that cancelling the paid subscription is nearly impossible, sometimes requiring sending through the post a letter in a certain format to an unpublicized address. Having the policy be that consent is required would likely increase the number of people being willing to accept free trials, and the number who subsequently subscribe because they actually like the content or product and not because they got tricked by dark patterns. Many dark pattern operating content providers might have to increase their quality though to retain customers. It's not enough to have credit card policies on these things, subscriptions are so often abusive that legal reform is needed. In addition to requiring consent after the trial, auto-renewing subscriptions should never be allowed to be the only or default choice. Auto-renew should be something you have to opt in to and we need legal reform to require that disabling auto-renew must be simple, straightforward, and available.
unreal37 7y ago
The purpose is not to "make money on people forgetting to cancel." The fact of the matter is that many more people buy when a free trial is offered. If your competitor offers a free trial, and you don't, they get more sales than you. It's "risk reversal". Similar to a "30 day money back guarantee". People are attracted to the idea of there being no risk to trying this and not liking it. In some industries, you simply HAVE to offer it.
- denzil_correa 7y ago
  In that case, offer a limited billing period in line with the trial time period (30 days in your example) and ask the customer for an extension at the end of the billing cycle. If your theory of "risk reversal" is true, they will extend the subscription. It's a win-win, consumers register for "risk reversal" and business get the chance to demonstrate their services.
- benologist 7y ago
  There is a really simple workaround - if (person_abandoned_trial) { dont_pretend_they_consented_to_lifetime_billing() }
  - judge2020 7y ago
    I think a better one is to just never auto-charge after the trial, and lock down your service asking them to start a plan for the main service after the trial.
- Jamwinner 7y ago
  Dubious ethical business practice is not somehow magically excused by the presence of competition. This attitude makes my blood boil.
  - cglace 7y ago
    Are free trials unethical? I’m not convinced.

adrr 7y ago

For physical products, it’s doesn’t make sense. You get chargebacks and high churn. You also get people who cheat the system with throw away emails. The business has to focus on catching these people and making it hard to cancel. These are things that don’t actually drive value for both the company and customer. Best decision we made at a subscription CPG startup was cut our 1st month free promo and instead focus on creating a brand through marketing and high quality products. This allowed the company to successfully exit after only 5 years. Companies that take the approach free trial approach burn their customers and get nailed by the government. A good example is a diapers subscription company that got nailed by the FTC ultimately leading to down round and giving up their subscription bundle.

criddell 7y ago

Only the companies with shitty products. Consumers will happily subscribe to services that provide something they want.

hombre_fatal 7y ago

Offer a free trial and then require the user to take further action to enable auto-renewal once the trial ends instead of preying on their forgetfulness. Bonus: Let users pay with Paypal so that you show up on their authorized organizations list so that they can revoke your access to their money without jumping through your arbitrary hoops like having to make a phone call and talk to a high-pressure sales rep just to remove your grabby paw from their cookie jar. I'll never forget the experience of canceling 24-Hour Fitness' recurring billing a decade ago. I had to schedule an appointment with their sales department in person and was berated with questions like "So, why have you decided to stop taking your body and health seriously?" by some smug prick sitting back in his chair with his feet on his desk. Such a stupid default system we have.

Marsymars 7y ago

This is already the case in certain jurisdictions. e.g. Quebec explicitly bans free trials that automatically rebill at the end of the trial period. Solution for most companies have been to offer a longer membership periods in Quebec. (e.g. Amazon Prime in Quebec is initially 13 months for $79.)