Categories: Subscription Commerce

Consumers Battle Subscription Friction As Fraud Scrutiny Tightens

Subscription commerce stands as one of the hotter parts of retail, with companies such as Lyft launching subscription plans and other firms expanding their existing subscription services. But news involving lingerie retailer Adore Me shows how the model, if not handled properly, could lead to angry consumers and declines in brand reputation.

In a CNBC story on Monday (Nov. 19), customers who didn’t realize that they had signed up for Adore Me’s monthly subscription plan talked about overdrafts and other consequences. One of the customers interviewed said she bought apparel from the retailer, but “didn’t realize she was automatically enrolled in a monthly subscription service, an increasingly common practice with online retailers that may catch shoppers off guard in the rush of holiday shopping this year.” She figured out what was going on when her debit card was declined at a coffee shop.

Among the problems?

According to the report, “some online subscription companies employ confusing business tactics, such as opting customers in to recurring charges without their knowledge and making it very difficult for shoppers to opt-out of the monthly fees.”

According to the new Subscription Commerce Conversion Index™, this type of retailer is growing not only in the B2C space, but in B2B as well. “Financial institutions are also taking an interest in subscriptions,” the report says.  “JPMorgan, for one, is now providing subscriptions to its firm-wide Athena software, which already has 208 investors signed onto it.”

One feature that separates top and bottom subscription retail performers in the Index involves the ability to cancel plans. As the report said, “90 percent of top-performing subscription services made it easy for customers to cancel their plans, compared to just 15 percent of bottom performers.”

Still, the report went on to say that “top merchants have dropped a few features — like rewards and marketing opt-in — though customers can find many of those features on bottom 20 merchants’ sites. Only 10 percent of top merchants offered marketing opt-in in Q3 2018, compared to about 20 percent of middle and bottom performers.”

Subscription commerce continues to grow, but retailers continue to revise their models as they try to avoid frustrating consumers.

Get our hottest stories delivered to your inbox.

Sign up for the Newsletter to get updates on top stories and viral hits.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

Recent Posts

Agora Services Debuts New Tools For SMB Banking

Challenger bank Agora Services wants to address challenges with banking for small businesses with a new solution called Agora SMB,…

57 mins ago

Google Almost Done With Transition To SAP Ariba Network

Google's transition to SAP Ariba's cloud-based services has a completion date set for Aug. 24 after multiple waves that began…

1 hour ago

Fed Moves Ahead With FedNow Despite Objections

Not everyone favors the Federal Reserve Board’s launch of its settlement service designed to eliminate the three-day check clearing and…

1 hour ago

Pelosi, Mnuchin Call For Reopening Stimulus Talks

Weeks of failed negotiations on pandemic-related aid has led to House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin, representing…

2 hours ago

Bitcoin Daily: S. Korea To Use Blockchain To Collect Highway Tolls; Polish Financial Watchdog Warns Of Fake Crypto Scams

South Korean highways could see blockchain-based toll booths before the end of the year, according to a report from Crypto…

2 hours ago

CHAMPS Group Purchasing Works With Procurement Partners On Smoother P2P Services

CHAMPS Group Purchasing is partnering with Procurement Partners, which works in procure-to-pay (P2P) solutions, to provide a new service for…

2 hours ago