FTC click-to-cancel demands create headaches for some publishers

• Publishers adding new subscription cancellation methods in response to new FTC guidance will need to tread carefully to manage the impact they might have on their businesses.

The Federal Trade Commission has made clear that U.S. publishers are legally required to let readers cancel their paid subscriptions online. Now, publishers that don’t offer the functionality will need to update their products and processes to enable it, and prepare themselves for increases in subscriber churn and dips in revenue that may result.

As Nieman Lab pointed out last week, publishers that don’t currently offer self-service unsubscribe or click-to-cancel functionality haven’t rushed to introduce it. That’s not surprising; despite the FTC’s demands, publishers will likely tread carefully — and slowly — in an attempt to mitigate the impact any required changes might have on their businesses. 

Last month the FTC formally signaled to publishers (and other companies) that it intends to step up enforcement against those that fail to provide “easy and simple” ways for customers to cancel subscriptions, and that cancelling must be “at least as easy” as subscribing. For most publishers, that effectively means letting subscribers cancel their accounts online with a click of a button.

For some publishers, adding new cancellation mechanisms will require significant alterations to websites, apps and backend systems, and internal processes and retention approaches — many of which have been dialled in over the course of years — will need to be rejiggered. 

And then of course there is the question of what impact the sudden introduction of “easy” cancellation methods could have on subscriber churn and revenue. While increases in churn might be inevitable, publishers will be reluctant to make sudden changes without strategies and tactics in place designed to prevent a wave of cancellations or opportunistic attempts by subscribers to negotiate lower rates.

It’s no secret that some publishers — especially legacy news organizations — have made life intentionally difficult for subscribers who wish to cancel. Even in instances where subscriptions were purchased online with a couple of clicks, some have insisted that customers “talk to an agent” either via phone call or chat functionality in order to terminate their subscriptions and free themselves from ongoing payments.

The motive behind these policies is clear, of course: They help retain subscribers. A significant chunk of customers won’t bother to call or wait in line for a chat representative to deal with their request; some will plan to do it later and forget for a month or more, and even those who do jump through the right hoops could be talked down with rate reductions or retention offers.

It remains unclear how rigorously the FTC will attempt to apply its policy, whether it’s already notified publishers that aren’t meeting its requirements, or if publishers have proactively reached out to the FTC for guidance on their practices.

But regardless, publishers without easy cancellation mechanisms should prepare to make changes in a deliberate and tactical manner — if and when necessary — rather than being caught flat-footed.

For more practical guidance on building sustainable subscription and membership products and businesses, see the Subscription Publishing Toolkit.