Starting a subscription is easy. Visit a merchant's site, click a few buttons, and now you're signed up.

Maybe that's why subscriptions are so popular. New data shows that Americans subscribe to an average of 4.5 services and spend $924 a year to maintain them. Additional data points extracted from Research Renub suggest that global e-commerce the subscription market could expand to $2.4 trillion by 2028.

However, there is a catch. Some subscription services are notorious difficult to cancel, making frustrated consumers turn to them refunds. In fact, 27.1% of traders surveyed in newly released 2024 Fee Return Field Report name subscription billing as the main chargeback risk factor. Sellers that use complicated interfaces that make cancellation options less obvious, implement complicated cancellation conditions, or implement policies that automatically renew subscriptions by default are particularly susceptible to subscription-related disputes. However, things may change soon on this front.

After a flood of public complaints about predatory subscription practices, The Federal Trade Commission (FTC) recently announced the final version of its new “click to cancel” rule. The move would “make it as easy for consumers to cancel their registration as they were registered.”

Related: A Guide to the FTC's New Subscription Provision

What does the new rule include?

Perhaps the most important change would be that marketers would be prohibited from making services a pleasure to subscribe to and a pain to cancel. In practice, this means that fitness centers and newspapers can't force consumers to send in a letter or wait on hold for hours to get rid of a subscription. Instead, the cancellation process should be as simple and frictionless as the initial checkout flow.

The new rule, which takes effect 180 days after its publication in the Federal Register, will directly affect traders involved in negative options billing. This means any arrangement where customers are charged automatically subscription they don't actively cancel or reject. The rule will prohibit sellers from misrepresenting any material fact when using negative option marketing.

The “click to cancel” rule also mandates that merchants post clear cancellation information and obtain the informed consent of cardholders before billing them. The FTC warns that merchants who do not comply with the new rule could face fines or severe civil penalties.

Click to cancel: A boon for marketers?

Honestly, it's easy to see why businesses would be opposed… at least at first.

Making it easier for consumers to cancel, say opponents encourage cancellations and defeat the point of a recurring billing model. Marketers who want to comply with the new rule also face challenges. Investing in technology and fixing legacy cancellation interfaces costs money, and in the face of increased customer migration and non-compliance penalties, these costs can be difficult. All of this has led the US Chamber of Commerce to deride the move as a “power grab” by an FTC prone to “micromanaging business decisions.”

Still, my contrary view is that the benefits to merchants will outweigh the harms, with the most effective positive being a reduction in chargebacks. The logic here is that cardholders stuck with hard-to-cancel subscriptions will submit refunds as a response. Marketers who embrace the FTC's new rule may indeed see more cancellations. But that's instead of getting refunds from customers who feel “stuck” in unwanted subscriptions.

Customer concern may also be excessive concern; for select marketers, the new FTC rule could make their customers even more stable. Those who feel empowered to opt out of a recurring service of their own volition are more likely to feel important and valued. In turn, they may perceive a brand more positively and may be less inclined to cancel a subscription in the first place.

In short, marketers who make it easy for customers to stay in are likely to outperform those who make it difficult for them to leave.

What else needs to be done?

To be clear, the click-to-cancel rule is not a panacea for refunding subscription fees. Strong preventative measures are multifaceted, so marketers should also:

Embrace constructive feedback: If possible, conduct “exit interviews” and ask for feedback from customers who cancel. Evaluate feedback received and work to combat complaints aired by exploding buyers.

Case Retention Offers: Deliver tailored offers that upsell customers, convince them to renew, or convince them to drop the price instead of canceling outright. Traders can too rewarding long-term customers with discounts or coupons to increase loyalty and satisfaction, which may encourage them to address issues with merchants directly instead of filing refunds.

Improve customer support: Minimize response time and ensure customer service personnel are reachable across multiple platforms. Train and empower customer support teams to address and resolve customer complaints.

Communicate transparently: Use plain language to inform customers about subscription terms, cancellation policies, and billing arrangements. Make sure the procedure and mechanism for canceling a subscription are clearly accessible online.

Keep up to date with the latest regulations: Subscribing to regulatory newsletters, attending industry seminars, seeking legal advice and conducting regular compliance audits can help marketers stay compliant and mitigate the risks of future penalties.

There are ample opportunities for it keep subscribers engagedeven after they cancel. Marketers who take steps to encourage retention through a better customer experience—rather than barriers designed to make cancellations impossible—will ultimately benefit.