Netflix stops charging customers who never watch
bbc.com
bbc.com
I can't blame them for trying, but it's definitely not a good time to be running a gym.
(Not that I've ever seen a site on which there was an obvious way to bring the consent popup back up after it was closed, but hopefully one day data protection authorities will unclog their pipes and the fines will start flying.)
https://www.cnet.com/news/companies-must-let-customers-cance...
The best way to handle Xbox payments is to buy pre-paid codes in the store and use them (assuming that's an option where you live).
Personally, I use cash for day-to-day transactions, credit if I want the third-party record or it is a larger transaction. I never use debit because the protections are stacked against the user, and CC cash back schemes refund a portion of the credit card cartel tax. So not using it except at the bank ATM means I don't have to worry about the number being abused, unless my bank's ATMs are compromised.
not much cognitive load or anything (i disabled sound for these and just check em once a day) and very hard to miss any transactions you didn’t really authorize
Is there any risk they'd sue you? Or other auto renew services, what do you, or others, think — do they sometimes sue their customers whose credit card expired?
That sounds annoying b.t.w., having to call them etc.
You need write an email with order date, current billing cycle, reference number and more.
All the while there you can manage parts of your subscription through a portal. They just try to make cancellation as laborious as possible.
"Hello sir, this is (collections agency). Can you confirm your address, please?" "No." "I'll have to end the call then." "Okay."
I would feel awful if I caved in and paid money I don't owe just because a company told me to.
And those agencies are very happy to assist, since they get a % for their work, and when the money is big. Most of they time it's very productive. Letters and calls are just the first step. A debt of 300$ can get to x000 pretty fast (debt, fees, lawyers). And then they go to court, put financial blocking on your assets, there is a judiciary person in charge of evaluating your assets, bank accounts, they can even freeze your debt from your bank accounts if you are refusing to pay a legal debt.
If you are abroad they will happily wait for you when you will get back, or get in touch via one of their foreign agency and let you know they are near.
If they would really want to get you in trouble they can inform the foreign local authorities about your problems, so depending on the case they can create problems for you.
https://www.westminster.gov.uk/ebooks-emagazines-and-audiobo...
Have to admit RBDigital ain't the best reading experience but good enough to read The week and The Economist for free :)
I even have PressReader access so many magazines to read :))
I do think a $1 trial is incongruent with their overall pricing.
https://www.vice.com/en_us/article/z43qx9/how-to-cancel-recu...
But it's not quite clear unfortunately how much protection they actually offer. A bad player could still try to enforce some hidden EULA small print that claims to empower them to ignore the cancellation and send bills the old fashioned way after cancellation on the intermediary. I really don't know if Apple or Google are taking effective steps against schemes like that or if they have just been lucky so far that those scammers are still finding enough prey outside of the walled gardens.
(ps: re-reading this comment I find myself sounding more critical than intended, actually I love subscribing through that kind of intermediary, I'd even consider paying extra. I'm just afraid that the protection offered might not be quite as strong as it seems)
What are the reasons you feel safe? (Then maybe I could try this me too)
If your rent autobill fails, I think everyone realizes it doesn't mean you don't have to pay. If the credit card for your gym membership expires, I think most people would likewise fear (and has been known to happen) that your bill would eventually be sent to collections. A $5/mo subscription? Not worth the time of the company to try to collect. A Salesforce or Adobe subscription on a card? I certainly wouldn't gamble on that, and would try to properly cancel the subscription.
That's not a subscription, that's metered billing, where you are billed for what you have already used.
Excuse me? If the bill is prepaid you bet your ass it means the subscription is cancelled. You can't pay, they don't continue to provide the service, end of story.
> If your rent autobill fails, I think everyone realizes it doesn't mean you don't have to pay.
The difference is that rent is paid after the fact and is typically part of a lease contract. What contract are you signing to get Netflix?
> A $5/mo subscription? Not worth the time of the company to try to collect.
Who's out here providing $5/month post-paid subscriptions? I have literally never heard of such a thing. Metered billing is a different story, but the discussion is lawsuits over Netflix subscriptions.
Actually when I asked, I had in mind subscriptions in general, not Netflix in particular
Netflix subscriptions are prepaid. What on earth would give them the idea to sue if your card is declined?
If your current month runs out and your renewal is declined, they just don't authorize you for a second month of service. There's no breach of contract, there's no debt for services rendered, I can't think of a single motivation to sue for this.
What am I missing here?
The latter would be fraud.
What seems more likely is that they would blacklist you if you're obnoxious.
If anyone at stripe is reading this, I think this is golden opportunity for consumer focused payment service. One should be at least able to block a merchant from charging my card. I can do that for spammer email but can't do that for spam charge on my card - in 2020!
Got charged some 40 Euro a year later. I was shocked. My first thought was a compromised card. But immediately afterwards I received invoice from VPS provider. I called the bank and asked them how did that happen. They said it's possible. Lucky for me the provider immediately reversed the charge.
The thing is I had cancelled that Amex card almost a year before that charge had happened. It was still charged! I was baffled. Coming from a country where literally every credit card payment has to be authorised via an OTP or password (since as long as I can remember) it was a whole new world for me.
Well, that cancelled card was charged again (almost a year after I had the last experience) when I shopped at AliExpress and forgot to switch to a new card while making the payment. This time I just paid the bill and went around Internet removing that cancelled card.
India did not have the OTP option, RBI made it mandatory to prevent fraud.
privacy.com seems like such a sleek solution.
It's a good compromise between protection and credit rewards.
On the other hand I cancelled and re-enabled netflix a number of times. I’m currently subscribed and happy that I can change it anytime.
I believe the wording to be something like it has to be possible to cancel in a similar way you signed up.
In France, Le Monde (most famous daily newspaper) requires you to send a paper mail (and not a regular mail, but a registered mail, which costs around 5-10€) to cancel your subscription. Even if you subscribed on the website, for a 100% online subscription.
It's really shady.
I learned that you can request a replacement card with the same number, which I was initially very excited about. But when you get the new card it has a different expiration date, so it still needs to be updated most places.
On top of that it wasn't even activated because we'd stopped using Citibank to simplify our accounting and just hadn't cancelled entirely yet. Backdoors exist apparently for recurring charges that roll over onto new cards for "customer convenience" because you wouldn't want to miss your bills and lose access to Netflix.
"Hi, these are unauthorised, fraudulent transactions, please revert them and block future charges from that merchant"
That's all it takes with Amex and most others AFAICT.
Another comment actually says that he managed to create a virtual credit card, change the payment method, and delete the card. Quite clever. It's a shame that methods like this have to be used instead of just the click of a button.
Report the transactions as fraudulent, they'll soon stop.
Works every time.
And if you want to rub salt in the wound, request a detailed gdpr information about you and your account. gdpr even applies if it is not a european country based media company.
And at the end of the day, all law fits into the cross-section of jurisdiction and motivation. If you’re a Singaporean company offering global services, there’s no jurisdiction and (unless your activities are especially egregious) no prospect of motivation.
But if you do business in the EU - i.e. have advertising from EU companies inside your media website or you are already dealing with the EU AND you have readers/users in the EU that pay for your service, it makes you instantly responsible for being GDPR compliant if you like it or not.
This is why some media companies block EU ip-address ranges not to fall into that "trap".
Yes, that’s exactly what I said. I’m confused about what you’re think you’re clarifying.
The court may struggle to apply it's judgements, especially if there isn't an applicable extradition situation, but all it takes is one representitive of the company to go to Europe and they are open to things like arrest for not following the judgement of the court
They stopped last year after I wrote to them I considered I didn't own anything (a human probably read the file and dropped it).
Reaaaaaally big smile on my face
I’ve been using this not only for subscriptions, but also when I’m making an online purchase at a store that I think may not have the best security in place.
https://www.bankofamerica.com/security-center/accounts-cards...
I think I pay for everything online with my privacy cards now. It's just easier to keep track of stuff when you get alerts after a company charges a closed card, or tries to charge you more than your card limit that you set up.
In my case they froze the account preventing me from moving domains. I called support and they unfroze it. The next night the system it froze again. It became a race, manually moving 200 domains over in 12 hours. They don't allow bulk moves and you can't quickly open each domain for editing in a separate tab.
Fyi: Why move. There prices went up to some crazy amount $30 for a .org 60% more for[a .ca it ended up costing me hundreds extra one month. Glad I caught it...
What is it with French companies? BlueCity, the UK arm of the French "Autolib" car sharing service, had this same ridiculous "send us a letter in the post to cancel" policy. Since they charged to a credit card rather than use direct debit like most UK companies would, you couldn't easily cancel the payments through your bank either.
Since I'm quite lazy I never got around to sending them the letter and the £5/month continued (and I did use the service, occasionally). Finally a few months ago they went out of business and the charges stopped.
If you’re struggling to cancel a subscription, contact your bank and ask them to block the subscription.
I cancelled my card and somehow they managed to rescind access.
In the end I took the offer of 25 cents a week for a year, waiting to see how they'll charge my PayPal.
But never the card. Reading such user horror stories, or Terms & Conditions, makes me turn around and never come back.
Not to say that Paypal won't screw you over, just that it doesn't do so all the time.
Relatively few monthly statements on it make anything funny stand out, and it's easy to just report/cancel the card.
Some banks have web/mobile banking where you can restrict actions/limits/transactions, so it's a good option too.
Others have virtual cards for this purpose, but these are not offered in a lot of countries (revolut, privacy, yandex money, etc).
You apply for the card online and get it in the post.
1. https://support.stripe.com/questions/2020-visa-trial-subscri...
“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a flashlight.”
“Ah, well, the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice, didn’t you?”
“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”
Depending on the law if your jurisdiction, an email may be enough. Then cancel any future charges on your CC.
IANAL. IANYL.
I remember it didn't exist when I signed up a few years back, and they made a big deal about announcing that I could now cancel/change my subscription online when it launched.
Also, I live in California.
Washington Post gives you upfront yearly billing and cancellation is a few clicks, and I am a happy paying customer for them.
The signup page mentions canceling subscriptions several times, which isn't false, but it isn't what you expect from a subscription-based page in 2020. This is in my opinion a dark pattern today. It probably would have been ok...20 years ago!
Ironically they even shed light on these things a few years back, warning about different patterns: https://www.nytimes.com/2016/05/15/technology/personaltech/w...
Shady, shady.
I want to resubscribe eventually, as they put out a lot of good journalism. But there is no way in hell I'm doing it until it's as easy to quit as to join.
In the end I just canceled the recurring payment contract at PayPal. A few weeks later I received a 'Sorry to see you go' email from them and that was it.
I'm not sure if credit cards also allow you to cancel recurring payment contracts, but sepa directdebit does (which is the payment method used if you used for example the Dutch iDeal payment method as initial payment.
And credit cards do this other obnoxious thing where they update merchants when you get a new credit card. It would be great if they didn't do that because then you'd remember that you are paying for certain services you never use because you'd get a payment declined email. But nah credit card companies just let those scumbag merchants continue their shadow charges under the guise of it being more convenient. Certain services like energy bills, phone bills. Sure, update the merchant with the new credit card. But a gym!? Gtfo with that trash.
I also have it set up to send a text message to my phone any time my card is used.
That's not quite true. The card network can refuse a merchant for any reason, constantly making bogus charges would probably be a good reason for the network to refuse them and that's likely to be the result. Of course you don't see if your bogus charge was reflective of 0.01% of the charges from this merchant or 99.9%
However as I've explained on HN a few times there's an important distinction between two separate payment card processes: Authorization and Settlement.
Authorization is the one with PINs and online referral and even getting a call from your bank about "possible fraud". Authorization protects the bank from fraud by customers (you're a necessary evil to them) and merchants by automatically collecting evidence that both authorized this to happen. Once upon a time that meant taking an "impression" and a few merchants still do that, today it may mean redirecting customers to a half-arsed HTTPS site or an EMV PIN terminal.
Settlement moves money. The merchant tells the network that they want $85.26 from card #1234567890 and usually that will just result in them receiving $85.26
These two systems aren't tied together. If there are two authorizations against your card this week for $20.00 and $35.26 but also three settlements for $19.86, $209.42 and $20.00 respectively, it's likely no alarm bells go off, this is fine, you pay $249.28
One reason it is this way is that while Settlement is essential to the idea in the first place (if the merchants don't get money what's the point?), Authorization is dozens of extra things tacked on over time and so each has to be optional or the system would fail.
This means important safeguards in Authorization don't actually safeguard you, only your issuer (in your case Amex)
For example: Modern Authorization schemes are replay resistant. When you pay with an EMV card the merchant gets a one-time "cryptogram" that isn't reusable. Buying a $5 product, walking out of the store, then realising you needed two, so you go back and buy another $5 product results in two entirely different cryptograms for the two Authorizations. The store can't present a third Authorization because it would need a new cryptogram.
BUT Settlement isn't replay resistant. When (not if, this really happens) an IT mistake results in running all the Settlement for a merchant twice, customers just all get charged twice, again no flags are raised automatically, it will take until either somebody confesses their error or more likely angry customers start calling their issuers to complain.
For individuals the only advice is: Check your statements, demand that line items you can't explain be reversed, and try to pick an issuer who is on your side.
1. Consumer should always be able to blacklist a merchant or provide a whitelist
2. Consumer should always be able to set limit how much a given merchant can ever charge him/her and during what time windows
3. Consumer should always be able to set total limit of charges he/she wants to have at any time
4. Consumer should always be able to get phone number, mailing address and correct full legal name of any merchant who puts charge
5. Consumer should always be able to generate new electronic card number for online usage and dispose off any previous one at will
"Check your statements" is an useless advice. My experience is that even when you find out bad charge, you have to go through hoops and appeals which may take weeks or even months. There are zero guarantees same charge from same merchant won't happen again. The only single case when CC companies are willing to take off charge immediately is when you say you don't recognize merchant at all and its 100% fraudulent. If you say you once authorized that merchants a decade ago, its suddenly your fault and you are looking at writing up justifications which will likely get rejected any way.
You're telling me how you think the universe ought to be but my advice was about how the universe is.
It's simply utterly bananas that all it takes is for someone to get a few numbers from me, and then they have the ability to arbitrarily take my money, making it my problem to dispute it. This goes for credit cards and ACH transfers (which only require routing number and account number). The company who figures out how to fix this will have it made.
To what extent they "have it made" is an open question, but I am curious what you have to say about their signup process.
Dodgy companies like the New York Times even do offline transactions to successfully charge canceled cards. I was able to cancel it by changing payment to Paypal.
I just swapped my subscription to Paypal, then blocked it in paypal. They then spent the next month sending me 8 emails asking me to fix my payment, which I all sent to the spam folder. I'm not a big fan of paypal, but definitely having control over your recurring payments is the best feature.
You can "log into" a London TFL "account" that is effectively just your credit/debit card. That means that, at least in theory, Stripe could let you log in to a "shadow" account as a card holder.
I think the problem is that Stripe (and others) don't want to upset merchants by making it possible for people to cancel "fixed term" subscriptions, where the merchant claims the customer has entered a contract to pay for X months.
Agreed entirely though - I would really like to see privacy.com style "limited authentication value/merchant card numbers" take off more and become a "default". This has added privacy benefits too, as it means for anyone other than the CC issuer, it will become very difficult to link digital transactions.
https://articles.braintreepayments.com/guides/account-update...
1. Citibank did this for a long time. They still might. I remember using this in the late 2000s for some online services at the time.
2. Apple and Google Pay both do this as well, though these are all one-time-use implementations.
It's sold as this pretty revolutionary feature that others have done (in some capacity) for quite a while now.
Apple didn't invent virtual numbers, but they have a better implementation than Citibank. It's Apple's MO.
We need to be empowered against these practices.
Btw, Very nice of Netflix to do this!
As someone who shops online at a much wider diversity of vendors than amazon.com, My card actually gets compromised about once a year and needs its number changed. I don't mind the hassle because it forces me to update the payment method for my recurring charges. On more than one occasion when I re-evaluated whether I really still needed some random subscription, I decided that it wasn't worth it any more to me.
On that note, I'm amazed how many accounts with outstanding balances have been next to impossible to close out by simply sending a physical check to an address. On the phone, they insist, "If you'll just give us your new credit card number, we'll get this all taken care of now." I respond, "I'm not giving you my credit card number because I don't trust that you'll actually stop charging me. I'm happy to send you a check in the mail to pay off my balance." Then it's often, "Uhhhhh, I don't know how to do that. My computer program requires that I enter your credit card number in this field to process. Please just give me your credit card number and stop making my life so difficult."
By the time everything is said and done (and escalated), they always end up finding a way to accept a check in the mail.
Very helpful /s
I think privacy.com does a similar service, but I loved to have this feature for no extra cost. I assume it also benefits the CC company a bunch with happy customers and less labor costs since people will be calling less for this kind of situation.
https://www.marketwatch.com/story/mastercard-cracks-down-on-...
Interestingly at some point they modelled what would happen if the premiums of the older customers was increased and they reckoned they could charge some customers double and they still wouldn't switch. This could have been used to offset price cuts for younger customers and generate much more profit overall, but it was decided to be unethical so they didn't follow the model.
Customer marketing and reach out programs were net negatives. They lost more money than they did bring in by a large margin.
I now a club once sent a simple questionaire to members who had not worked out in a long time.. just to gage why.. massive cancellations followed.
I think the majority instead contacted customer services to manually cancel it. Some also did a chargeback, which companies hate as it is expensive.
But in the end, there were so many sleepers that every time there was a plan to email all customers about an offer, or new service, it was always raised that it might make a lot of customers aware that they have the subscription, or check with their kids if they still need it, so sometimes the mailshots were filtered to active members, or just skipped all together etc. It was an uneasy balance of "don't touch", and never felt nice.
Last year I was contracted back to that company to help sunset the product I worked on years before, writing tools to notify and cancel all recurring payments. A huge chunk of customers was then sleepers that had not logged for 7-9 years. I do wonder how many were surprised when they got the cancellation email! :)
It's beyond insane how, in the USA at least, you give someone a string of numbers and they basically get pull access to your money for what might as well be perpetuity. And that you have to use to a specific bank, Paypal, Apple Pay, etc. to have a system as simple as a list of entities authorized to bill you in the future. And the ability to terminate those permissions.
Just think how well most people would be served financially if everyone was receiving phone notifications when they were recur-rebilled. "$15 to 24-Hour Fitness" popups up on their homescreen. And they could cancel the permission. Or at least just think "hmm, what's that for? Ah, right, I do want to continue being billed."
It takes a lot of mental gymnastics and charity to imagine how this system wasn't expressly designed by and for the enrichment of grifters.
ISO 9001 requires to implement some kind of customer satisfaction feedback as to assess customer satisfaction for ongoing improvement.
When the ISO auditors/consultants said that they should do something about it such as sending surveys to subscribers to assess their satisfaction, the Sales & Marketing VP said that if ISO 9001 meant that they had to remind subscribers that they had a subscription they do not use, they would rather cancel the ISO 9001 certification project altogether.
I described another pattern here: https://caseysoftware.com/blog/working-for-a-dating-website
Laws have unintended consequences.
Also I subscribe to a number of services I barely ever use, generally because I got in with an account very early on, and the price I’m paying is usually 1/5 or less of the current retail price. I do not want companies to proactively cancel my service.
“Thats Absurd!” You may say... well for about 10 years I kept my original AT&T unthrottled and unlimited plan goong on an iPhone, then iPad, until my credit card expired and the payment lapsed. Of course my account want instantly closed and my grandfathered plan unavailable.
Did I use more than 30 GB a month? No. Could i buy that plan again around 2017-2018? Nope. I was happy to secure that for $20/mo.
Do I want companies to have more red tape and penalties, such that they proactively shut down accounts from legacy plans? Absolutely not, get off my lawn.
FWIW ETrade agrees with this. It wasn't their policy that closed the account, it was a law that was in theory to protect consumers... from themselves?
Basically by being employed by the gym and living in an RV he had no recurring expenses expect car insurance.
The cops started to ticket people on El Camino too, but I think they stopped doing that during the lockdown.
They emailed me a few times telling me I had to continue paying until the end of the membership, then called for a few months (never picked up), and now it's all gone.
Maybe my credit suffered, I have no idea, but I couldn't care less. I do not want to be a slave to this "credit score".
Figured we could just live in the office and shower at the gym. Actually think I could have pulled it off but I'd probably die alone.
I just wonder how long it will last. It sometimes feels like all the big successful consumer companies become accountancy-driven scumbags sooner or later. Fingers crossed Netflix can buck the trend and stay a nice company to deal with.
Before the simplified version, we already used to only register to Netflix during long vacations, binge watch whatever we wanted (typically Black Mirror and Sherlock) and cancel the rest of the year.
Now that it’s way easier, there’s less friction in reenabling the account when there’s a series we want to watch and set the subscripting to cancel again at the end of the month.
The real test is how they behave when competition heats up.
Sirius is also pretty scummy about cancelling, although they keep luring me in.
I was impressed.
It's a great way to ensure I'll never return as a customer.
On the other hand, the "pause subscription" feature that many services are implementing pretty much guarantees that I'll resubscribe (even if just for a little while) in the future - because inevitably, they'll have something exclusive that I want to watch.
Maybe notifying customers gets them to reactivate, maybe if they resubscribe later they can charge more, maybe it’s better for financial reporting and projecting subscriber counts.
On the other hand it could just be a rare moment of a company doing right by the customer.
I bet you're right.
They sent me an email that they weren't going to charge me because I hadn't used it, but I was free to sign up in the future if I decided I wanted it.
It was so refreshing, it made me a lifelong customer.
I don't think this was a cynical marketing ploy designed from the top down either, it was a very natural thing for the company to be customer obsessed and trying to do right by them.
It's trying to do right by the legal and finance departments, not by the customers. Going after someone for anything less than a mid to high five figure AWS bill is never worth it because the legal costs are astronomical, the defendant probably can't pay in the end, and the cost of defending will drain the customer of any more resources that could have been spent on the cloud.
It's the cost of doing business. The choice is between trying to bleed a rock or a safe bet that LTV will be higher than the marginal cost.
I seem to sign up every year or so, spend my credits, and cancel. They keep offering it though, and now I'm considering buying (as I enjoy the medium, turns out), so I suppose it worked.
Then I realized it and thought to myself — nevermind, I have the credits, I'll eventually use them up.
Nope. There is a credit cap and after you reach it they'll happily charge you without providing any service.
Personally, I consider this to be a dark pattern and it makes me reluctant to sign up for any trial or even subscription services in general. I'm glad that Amazon is upfront about it but would prefer that they didn't do this at all.
What's sketchy is that Amazon's Audible deletes all your unused book credits if you unsubscribe. If you don't know what to buy with those credits and you want to unsubscribe, you face the decision to keep buying credits, or lose the credits you already paid for.
Fortunately, there are a couple of workarounds. There's the option to pause your subscription for 3 months, or you can buy a book, cancel the subscription, then return the book to recapture the credit once you find a book you actually want to read.
Their Prime subscription was a pain to cancel in Belgium. I found it on the German site, even though I always use English and there for the English site.
They also use dark patterns for it, unsubscribing is very confusing.
You can't do anything on the Amazon store without being goaded into signing up for Prime and having to triple check what you are clicking on during checkout to make sure you don't sign up by mistake.
My wife already has a Netflix subscription despite Amazon's attempts to hook her on Prime (I'll take credit for stopping that). After this this news it seems it was definitely the correct choice.
(Also netflix would have to report all those unsubscribes to shareholders, but this way no one cancels and they're framing it positively as consumer-friendly).
So if netflix incentives people to people keep their accounts, they remove the friction from what would otherwise be a high-friction resubscribe.
As long as netflix believes they can get people to come back for an occasional exclusive content hit-show, then they can reactivate the payments for a while.
As it grows, that hits the pnl anyway so from an earnings perspective it doesn’t matter too much. Couple that with the cost of customer service calls etc. + the inactive customer count + the goodwill and the decision seems rational
For example, often you hear angry customer who is like "can you refund me, I didn't use it this month, you can check your records"
Then request is passed on to some other employee who confirms that they really didn't use their account.
After that you issue refund.
In most cases, you end up issuing refund either way while in some cases customer forgets but he doesn't forget he got charged. So it counts towards negative experience even if a customer didn't complain about it.
If your company is here for long term then every negative experience matters.
Netflix is vastly bigger, granted, so who knows what machinations are afoot for them. But it is certainly believable to me that a company could choose to do something explicitly anti-greedy.
I'm pretty sure that's just the absurd HN take on the "duty of loyalty", not an actual fact.
Also, if you absolutely need a pessimistic reason, I imagine it would avoid headaches with customers complaining (regardless of who's right).
There ARE industries that survive on the, "One loud sign-up multiple silent payment extractions," model; everyone hates them and they have to ju~st skirt regulations to get by ("I'm sorry, we didn't receive your cancellation, please fax it with proof of necessity, last month's payment is still due.").
This same dynamic plays out with any service that sells you long-term self-improvement but is burdensome to use. Exercise tracking apps, diet tracking apps, health-conscious meal kits, subscription lessons for music or foreign languages, etc. There are shadier examples for sure, but it’s not always cut-and-dry evil.
Honestly I could see this being an honesty test class action at some point.
see the references in this post:
(The reason is that the courts don't want to get involved in the minutae of running private companies. They'd rather you just update your company bylaws.)
However, shareholders, or most famously private equity (PE) companies, may pressure mgmt. to adopt certain policies and goals, and use their voting shares to encourage or even enforce that.
The standard, from In Re Walt Disney, is that business decisions aren’t reviewable unless “the exchange was so one-sided that no business person of ordinary, sound judgment could conclude that the corporation has received adequate consideration".
In, Shlensky v. Wrigley, the Chicago Cubs’ were sued for refusing to install lighting for nighttime games: their president believed baseball was best as “a daytime sport." This is absurdly nebulous (and kind of bizarre), but the Cubs nevertheless won.
That decision was based on Davis v. Louisville Gas and Electric Co, which says “the directors are chosen to pass upon such questions and their judgment unless shown to be tainted with fraud is accepted as final. The judgment the directors of the corporation enjoys the benefit of a presumption that it was formed in good faith, and was designed to promote the best interests of the corporation they serve.”
It is probably true that this policy earns Netflix some intangible goodwill. It might plausibly make them more money. However, even if it didn't, it would still be within its rights to implement such a policy.
Props to Netflix for unsubscribing users who don't use the service.
When I hear sob stories about how #{big_number}% of people can't afford an unexpected $500 bill, I'd love to know how many of those people would easily have $500 in savings if they cancelled all their unused subscriptions and stopped buying a new smartphone every year.
[Edited]
With economic gap between poor and richer, it is quite easy for one segment not to worry about subscriptions and for another to not have money.
Anecdotally, programmers and other well paid people I know areally waaay more likely to buy subscriptions then people I know who don't have money.
The people who buy new phone every year are also incredibly rate among those I know - not even rich people do it.
This is sort of like the fact that strict border controls encourage undocumented immigrants to stay once they've passed the border once.
Many people give money to ensure that a service is available when they need it.
Netflix, as a service, takes ~10 minutes to set up. This might be the case for a software suite like CC, where you might need to download a massive amount of data, or other software where you pay annually or enter into some kind of contract, but Netflix is strictly monthly and easy to sign up for by design.
I also run a business designed to be used in the moment when an author is struck with inspiration. It takes less than a minute to upgrade or downgrade (and some users choose to only upgrade for hours at a time each month with no penalty, aka a month of subscription time sometimes lasts a full year), but when I experimented with automatic downgrades to those who hadn't signed in all month I got complaints that they "weren't able to just log in and use the service they paid for".
Could just be a notice thing (improving messaging to more reliably let users know they've been downgraded), an option (letting users opt-in/out of automatic downgrading), or have other solutions (maybe refunding instead of downgrading?), but it does seem that at least some users like to feel like they're paying for something to be "at their fingertips" when they need it.
That seems like the right way to go.
Not saying they can't occasionally make altruistic decisions like this, just that more people's interests are being weighed.
I think it's become common because the average public company CEO tenure has fallen by 50% over the same period that their compensation has gone up 10x. Now it's in their strong interest to juice the quarterly numbers and not worry about anything particularly long term, because that's going to be the problem of some other sucker. And similar incentives apply all down the executive hierarchy. The faster people move around, the easier it is to make bonus-related metrics go up even if it harms things a few years down the line.
The move is also brilliant in two ways: 1. More Netflixsters will realize now and start watching again. 2. Netflix is getting a lot of free publicity.
The Combined value of these two is worth far more to Netflix than whatever pennies in revenue they’ll lose.
“Doing the right thing” and “managing reputation risk” are often indistinguishable. The details of Machiavellian self-interest can be difficult to codify, so a semi-sincere effort to do the right thing can be safer.
It could be canny business sense.
It could be both.
in a similar vein, Ikea umbrellas are discounted when it rains.
Ever see a person who was just really great to everyone and the world seems to have rewarded them for it? That doesn’t always happen but sometimes it does.
If Netflix can successfully normalize "only charge me if I use the service" into a basic consumer expectation for subscription businesses it might cost Netflix a little, but it might cost their competitors a lot more.
By putting a policy in place like this they're internally much more incentivised to ensure they are putting out consistently good content.
Their action both removes a problem on their side and is good for customers. Win-win. So probably not entirely altruistic (nothing is), but at least partly.
My favourite is Gusto. Why is Gusto so good? I only use it twice a year or so, the guy buying it isn't the guy using it, and the principal value in their business is integrations not UX. Well, Gusto is good because they want to be good. I'm happy with that explanation.
Arguably, doing right by the customer is selfish because it looks out for you business in the long term.
It took a lot of emails and complaining before Lastpass told me that it was due to me being an Xmarks (bookmark sync service) customer in 2009! Apparently they owned Xmarks briefly. Why the charge started a few years ago they have no idea.
Despite repeated attempts to cancel the charge via Lastpass and Paypal it still happens every year. Apparently neither company can stop it - so every year I complain, get the charge refunded and have to swallow the exchange rate fees on my credit card. Maddening and leaves me with zero good will towards either of these companies.
Outside of this I am pretty sure no company is able to automatically bill you on PayPal without your consent, except for a select few companies like Nintendo (where you can pay on your Switch without authorizing any PayPal prompts).
Those agents who pull my money without my explicit consent every time are the reason I'm keeping my card with minimal amount of money (I don't use credit cards, only debt cards).
When setting up a DD, you can give a european company your IBAN. They will be able to make withdrawal requests, directly to your bank account. Your bank will usually give you full control on what you can do with those. For example, my bank Bunq (https://bunq.me/) allows me to accept once, or automatically accept any debit request up to whatever amount I choose per period from that same merchant.
Direct Debits are free. You bypass credit card fees (which in Europe are much lower than in the US in the first place but still percentage-based). They are also usually real-time (though slower than the credit card network, and depending on banks and fraud checks there can be latency of up to a couple of days).
Disappointed after reading the article. TLDR : they cancel your subscription after 1 year of inactivity
"Tell HN: Interviewed with Triplebyte? Your profile is about to become public"
https://news.ycombinator.com/item?id=23279837
White Pattern? vs. Dark Pattern
That said, I think it's important to acknowledge when people you disagree with do good stuff--this is how we make sure that our disagreements are based on principles and logic rather than grudges.
Of the subscription services out there, it's my impression that Netflix is one of the best. They avoid a lot of dark patterns, and this latest action of not charging customers who don't watch is a very upstanding action, especially since it cuts into their profits in a really direct way.
There are still complaints I have about Netflix[3], but the real heart of the issue is that this cannot last forever. There's simply too much counter-incentive for a company to walk away from a revenue stream like this. And with a subscription business model, there's nothing to keep them honest, because Netflix has all the control.
[1] This is a term I'm basically inventing on the spot, based on something I've been thinking about lately. Physical print newspapers were subscription based but they weren't revocable-access: you received the newspaper on subscription, but once you received it, you owned it. This differs fundamentally from web-based subscriptions. With web-based subscriptions, if you let your subscription lapse, the site revokes your access to content which you previously had access to.
[2] Most people around me have Netflix subscriptions, so I end up watching a lot of Netflix with people, despite not having an account myself.
[3] a) Patterns that manipulate dopamine response. b) Glossing over credits so content creators don't get credit. c) Monopolistic practiced with regard to tethering content creation and content distribution together.
But with online subscriptions, you also gain access to historical content: if you sign up for a traditional newspaper, you don't immediately gain access to previously published papers, only those published subsequent to your subscription. Modern online subscriptions are more similar to traditional libraries, providing access to historical as well as future content. Presumably this is a major factor why Netflix and other services insist on calling their collections "libraries", despite being otherwise dissimilar. I think it's an interesting question though: would people pay for a Netflix subscription that provided irrevocable access, but only to current and future content? I would say probably not: a significant portion of the value proposition of Netflix is due to their historical content: "you can watch anything you want" (that we have), regardless of when it was published. Would you pay for this service?
Non-revocable-access subscriptions are, in my opinion, just a convenience layer around the ownership model. The man function of these subscriptions is automating the buying of something you buy on a regular basis anyway. There's an element of vendor lock-in in some models, but not all.
There are plenty of examples of the ownership model gaining access to an extensive archive: it used to be that you could buy the Criterion Collection on DVD, for example. Presented this way, however, it becomes immediately obvious that people don't actually want to pay for the entire archive, at least not at the price the owners of the archive wanted to sell it at. You don't want the entire Netflix archive, you only want a few movies and shows from it. The primary problem here is that archive contents are massively overpriced: nobody wants to pay $8 for every DVD in the Criterion Collection. In an ownership model you have to let people pick and choose the parts of the archive they want and buy only those, or if you're selling the entire archive in one chunk, the price per-unit has to be low enough to justify making the buyer pay for vast swaths of content they don't actually want.
Steam does a good job with this: they generally price their older games at a price that people are actually willing to pay, and their bundles tend to be intelligently grouped so that if you're interested in one of the bundled games, you're probably interested in at least a few of the others.
FWIW, Netflix gives the producer of the content the choice on whether that happens or not. So it's the producers who are actually choosing to skip the credits, not Netflix. Netflix just gives the option.
> Monopolistic practiced with regard to tethering content creation and content distribution together.
Netflix would rather not do that. Remember, they started as a DVD service. The nice thing was that because of Fair Use, they could have any movie the want on the service. If streaming worked the same way, and they could just buy "retail" copies of movies and stream them, they would be much happier.
They only shifted to the content creation model because they had to, because it was cheaper than licensing someone else's content.
I wouldn't look at them as an shining beacon. They only cancel if you haven't watched it for a year, and none of your money is refunded, so it's not that great of safety net.
Example: DSL Connectivity.
If there are only a few market participants and the allowed lenght for contracts is 24 months, it will be 24 months. This is bad for a number of reasons to me: - First, a different (and hopefully better/cheaper/cleverer serivce needs to "endure" that only 1/24th of the customer base per month could change. That is also the problem for customers who have issues with the Provider. - Second, this gives incentives for what I call "dishonest" offers: Marketed as "half off", its only half of the first year (or only six months), then full price for the rest. Hacker News is full of people who are good at math, but this appeals mainly for people who are not. Or who don't have the choice when they are already short on money. - Third: Part of the calculation is the rate of people who might not use the service to moving, death, etc. - and I don't want the company or me be part of that.
When it comes to other types of contracts (mobile operators, gym services, ...) the stabiltiy of income is still guranteed with shorter spans if you provide a great service. This is proven by markets where these types of protections exist.
And netflix shows that you can even go month by month. I believe thats also because people can buy dvds/blue rays, rent/buy online, go to cinemas, etc - so there are a lot of competing options, forcing you to excel in service. And thats vs. "free" bittorent, rogue streaming, too.
In contrast, I an older article how this one phone company charged an elderly women in rent for a rotary phone.
> https://www.computerworld.com/article/2483100/at-t-charges-e...
I routinely cancel subscriptions for S3stat customers who have forgotten which old employee first signed up for the service, or just don’t want to bother logging back in to do so. A name, or even company name is plenty.
Shouldn't be the case for a big company, but a smaller one- man startup could easily make this mistake and not be scummy.
If you want to do it, set it up so all charges must result in 24-hour notification to customer and option to cancel future charges.
This whole reaction makes me understand why California has all these backwards-ass propositions. Everyone just wants to make any damned random thing a law.
No wonder "no contract" chains are growing in some countries.
Less BS for the consumer, even if they have to "pay more" (i.e. the actual cost of the service).
(But yeah in the case where you actually want to pay for a gym membership and not go, those seem optimized for it)
But that's why it only more interesting. We all are sadly accustomed that selling subscriptions you would never is the business model of most gyms. But then, what would be the reason for Netflix not to do this? This is really weird, I don't believe they would do this just to be good guys, and I don't see what can be the reason for them to do that otherwise.
> Netflix said less than half a percent of its user-base falls into that category.
> Almost 16 million people created accounts in the first three months of the year, nearly double the new sign-ups it saw in the final months of 2019.
I feel like they are doing the minimum change necessary to try to reduce legal problems. They have actually probably had a lot of people try to sue them for charging them for a service they have not used for months and months, when they forget about it and then notice the charges.
No doubt the quarantine was a solid motivator to sign up.
If your credit card expires, many subscription providers will get the updated details automatically.
Here’s an article with some details on the topic: https://www.creditcards.com/credit-card-news/card-updater-se...
Probably a related thing where they want to keep receiving revenue from me without interruption to my service, but ultimately need to confirm it's not fraud?
Do I cancel their subscription? Is that the right thing to do from a customer service perspective? I have no idea. Sending an email that says "Hey, um, did you do this accidentally?" is a bit unprofessional. I tried contacting them to no avail, to see if they needed help setting up to keep it professional but still remind them they have this recurring subscription they might not want. Eventually I ended their subscription and left a professional sounding "We noticed you're not using our service, so we have paused your subscription." email and ended it.
I still sometimes wonder if it wasn't a friend or friendly stranger who wanted to support me, and if it was I must sincerely thank them.
I spent ~five years with a Netflix subscription that I never watched. I'd joke that I ought to get a Christmas card from them, because I was one of their very best customers.
Even now, I'll flip back and forth between paying and not paying, because I only use the service occasionally. I suspect it's less hassle for them to keep people like me on the books than have us fade in and out.
Well done to Netflix on this I really cannot see an upside apart from the awesome brand loyalty they increased by doing this!
They're a decent service but they were acquired by GoDaddy (who I think are douchebags) so I stopped using the service. But I have been forgetting to actually cancel it for years now.
For a while they were changing me ~$10/month. Nice for them and not painful enough for my lazy ass to jump though whatever hoops they may have set in place to cancel.
Then one day I let the balance on the debit card they have on file for me fall to zero, so their auto-debits were failing. Eventually they sent me an email saying that they would stop charging it, but... They will (and do!) try again from time to time. Just to see if it will work.
Rather than just cancelling the service (that I haven't touched in at least 4-5 years) they leave my account in a zombie state and periodically attempt to harvest it again.
(EXPLETIVE DELETED) cheeky bastards, eh?
I worked for a game company and we had a small number of folks who bought lots of games and never activated them. I lobbied management that it was unethical to keep these peoples' money, it was unethical, I was laughed at.
Now that that is out of the way, can we talk about parental controls?
What we need is good UX for users to manage their various recurring payments, and cancel them by easily blocking payments to specific companies. That's one thing Paypal for instance does right with its "automated payments" dashboard.
The current system of customers having to trust companies by default doesn't work in a market where antisocial behaviour is not more heavily punished.
Also my main bank is now Monzo (based in the UK) and there I get a notification on my phone for every transaction I make. I also see a list of all the committed spending for a month which includes all subscription based services I have (some of them I had to mark myself as such because Monzo can't distinguish if they are recurring or not). To be honest I think every mobile bank application should offer this out of the box. It's 2020...
My guess is that they put together data internally that showed e.g. 3% of users become dormant for longer than a quarter, while 5% of people cancel their accounts after a quarter or two of low or no usage, due to the feeling of not getting enough value out of it.
Imagine being able to reduce those cancellations at little or no cost to the bottom line, and turning it into positive PR.
Been doing this for many years. If something that unexpectedly gets charged, I know right away or I just goes away. This way I have to some degree regained control.
But I don't think it's worth 5 euro or 11 euro a month because I only enjoy a very small portion of media.
So far it's easier to pirate.
And I'm far too used to the situation where a friend wants to put something on from netflix and it's not available. What's the point of paying 11 euro a month when you're restricted to such a small library?
If Netflix (and the producers of shows and films) want folks to watch, they need to improve. One could start by removing geographic restrictions and merely cull their library for legal reasons (X topic is restricted in X country: Y topic is only available after 8pm).
Also, Netflix doesn't rely on cinemas for its films. The other production companies can follow suit if they decide they want to. The companies can find ways to finance things and reduce piracy, but so far... nope. They are still dragging their feet.
> pirating is not sustainable
Please stop shaming people for not being as rich as you. For not having 'disposable' income and have money for 'entertainment'. Have you seen the state of the world? [2] It's honestly not as fair as you make it out to be, it's not sustainable for Hollywood to keep getting the kind of power it currently has to tell stories. [3] In my eyes Westeners are so psychopathic and culturally grandiose to believe that their systems are just and fair. They are all too happy to cecede control to the corporatocracy, their (perceived) benevolent overlords.
I believe what is not sustainable is intellectual property rights used by rentier capitalists to extract parasitic rents:
"Whether we are streaming content or licensing software, we are paying for the privilege of slowly ceding control of private property to corporate gatekeepers." [4]
[1] https://www.counterpunch.org/2016/03/16/the-history-of-holly... and https://www.counterpunch.org/2013/02/20/hollywoods-imperial-...
[2] https://www.youtube.com/watch?v=btF6nKHo2i0
[3] https://www.youtube.com/watch?v=N5xfBtD6rLY
[4] http://archive.is/y0lQf / https://onezero.medium.com/landlord-2-0-techs-new-rentier-ca...
Also, maybe the title should be "Netflix will delete the accounts of customers who never watch", because that describes what Netflix will be doing more accurately.
Yeah, that's what I assumed when I opened the email. Rather scummy in my opinion.
I'm from the UK and pay the sub via Paypal, it's only £4 a month. I'm half tempted to just cancel the payment on Paypal and hope they don't sue me? Can they?
Cancelling the payment is the same as cancelling the subscription.
I recall one service pointed me to PayPal to cancel a subscription, and that’s how I’ve managed them since.
Edit: spelling
Well, I've just cancelled it. No turning back now!
Less than half a percent isn't that much relatively, but those are still many millions.
It'd be hard to convince me that they did it because they're nice, they have share holders who are not interested in that stuff.
So what could have pressured them to do this? Regulation?
100%. It might have something to do with wanting more clear/precise analytics numbers. Non-active members might weigh down certain metrics in some way, so removing these members likely allows for 'fuller' analytics/measurements, which is important to their core business. Netflix is now also a very active producer of content itself, instead of it's previous business model of licensing/'renting out' others' content, so clearer and probably higher engagement metrics (once non-active memberships are removed) helps one of it's core competences.
It's purely a business move. Their blog post is PR.
You would avoid some of the support costs, some chargeback costs and cost with negative publicity (people complaining about ”fraudulent” charges on social media).
On large enough scale you can likely do some calculations and eventually A/B testing to figure out what does this mean financially.
In fact, if I try to login with the email address I used for the trial and any random thing for the password, it goes to the new user trial setup.
If I hit thee "need help" link on the sign in screen and try to initiate a password reset, it tells me there is no account for my email address.
In most cases I bet they get paid - usually whoever is overseeing a loved ones estate really doesn't want to be going to court etc.
I don't want to name the company, because the dispute is still ongoing.
If anyone is interesting in learning more about the economics and psychology of gym memberships, I highly recommend Episode 590: The Planet Money Workout of the NPR podcast Planet Money.