How many times have you gone to cancel a subscription or a ‘free’ 30 day trial – only to find it’s not as easy as it should be?
Signing up was a breeze, but opting out can feel like you are in a maze – one where you can’t find the ‘exit’.
You are not alone.
According to a report by Consumer Policy Research Centre (CPRC):
- 48 per cent of Australians have spent more time than expected trying to cancel a subscription.
- One in three felt pressured into keeping one.
- 75 per cent had a negative experience when attempting to cancel.
- And 1 in 10 simply gave up and kept paying.
Source: CPRC: Let Me Out – Subscription trap practices in Australia.
Welcome to the Hotel California
These kinds of subscriptions – where signing up is a cinch but getting out is a difficult or time consuming process – have been dubbed “Hotel California traps”. As the Eagles song puts it: “You can check out any time you like, but you can never leave…”
Funny name. Not so funny in practice.
Whether it’s hiding the ‘cancel subscription’ button, breaking links so you can’t cancel, forcing customers to call a help line and wait on hold – this kind of “retention strategy” is just bad business.
Software companies, mobile apps, and streaming services are especially notorious for luring people in with “free” trials, then auto-renewing into costly plans – often with little to no warning.
Insurance companies are also long-time offenders too. It’s astounding to me that nearly a third of Australians let their insurance auto-renew, often absorbing steep premium hikes, while new customers are offered better deals. As I always say, loyalty never pays but comparing and shopping around does.
Recently, dating app eHarmony was accused of misleading users with confusing cancellation options, prompting the Australian Competition and Consumer Commission (ACCC) to take legal action.
Good to see. But as consumers we also need to be part of the change.
Because the truth is, companies count on us being too busy, distracted, or disorganised to cancel. And it works. It’s not until we check our credit card or notice a shrinking bank balance, that we realise we’ve been taken for a ride.
So, how can you avoid visiting the Hotel California? It’s easy.
Never auto-renew – anything. It’s a slippery slope.
But if you do sign up for a free trial with an auto-renew or a subscription, make sure you do the following:
A few good habits:
- Check the website or app to see how you’d cancel. If it’s hard to find, that’s a red flag. Don’t sign up.
- Cancel well before the trial or renewal date. Set a calendar reminder so it doesn’t sneak up on you.
- Keep proof of cancellation. Take screenshots, save confirmation emails – just in case you need to dispute a charge.
- Turn off auto-renew on your phone. Uninstalling an app doesn’t automatically cancel the subscription – you have to do that manually: – For Android/Google Play: Open Google Play > Tap your profile > Payments & Subscriptions > Subscriptions > Select and cancel. For iOS: (iPhone/iPad): Go to Settings > Tap your name > Subscriptions > Select and cancel.
Here’s the irony: the same CPRC study found that 90 per cent of Australians would be more likely to buy from the same company again if cancelling was quick and easy.
In other words, companies don’t need to trap us to retain us – but they do need to treat us fairly and provide a good product or service that we are happy to pay for. It’s that simple.
Source: CPRC: Let Me Out – Subscription trap practices in Australia.
