Regret Signing up for a Free Trial? Mastercard Now Has Your Back
Signing up for a free trial to test a product is a great way to see if something is a good fit for you. Think Birchbox, Barkbox, Loot Crate, Bespoke Post, or Dollar Shave Club. These types of subscription services for physical products is a booming industry. The free trial is great if the product turns out to be something you want. However, we have all run into the issue of forgetting to cancel those free trials before they get converted to a subscription. Often times after that trial is converted over to a subscription figuring out how to cancel the subscription can be more complicated than solving a Rubik's cube.
MasterCard wants to help. The company has announced new policies for merchants that offer free trials for their products. The new rules will require merchants to confirm with the customer that it's ok to bill them for the new subscription at the end of the free trial period. This notification — via email or text message — must include the transaction amount, payment date, merchant name, and most importantly clear instructions on how to cancel the subscription.
In addition to requiring the merchants to get permission before converting to a subscription and billing the customer, MasterCard is also requiring that customers receive monthly receipts via email or text for their subscriptions. Again these monthly communications must include the amount being billed as well as clear instructions on how to cancel. To make it easier for consumers to identify these charges on their statements, merchants will be required to include the merchant's website or phone number of the store where the cardholder made the purchase.
Requiring merchants to send detailed billing each month for subscriptions will be a huge benefit for consumers. It can be easy to forget that you signed up for a trial until the item arrives at your door or you see the item on your statement. Those statement items can then be hard to decipher as well. The new rules will make it easy for you to identify exactly what the charge is for, and with monthly receipts with cancellation instructions, eliminate those recurring charges for products you don't want or need.
Mastercard says the new rules will take effect April 12.
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