[lsc]

hmm. I've spent more time thinking about the ethics of recurring billing than the effectiveness of recurring billing; The big problem I have with recurring billing is that recurring billing tends to capture money from the 'I forgot about it' customers... users have to take an action to cancel the account. Especially for small-dollar items, a recurring charge can go for months unnoticed.

I don't feel good about 'capturing value' from users who forgot to cancel... but the alternative (what I'm doing) is to make them take a positive action every renewal. (In my case, the account auto-renews, but it sends the user a bill that they have to actively pay; if they don't pay, the account goes away.)

Now, some people do prefer the 'bill me every month without asking' model... but I think the right thing to do is to make this an option; one option where the account will expire if the user doesn't take positive action to renew the account, and another option to automatically continue billing until the user asks to stop.

I don't know if many others feel this way, but as a user of subscription services, this is something I think about. I know that I'm probably going to forget to cancel, and that canceling is often difficult, so generally I consider services that don't autorenew to be much 'cheaper' even if they are the same price in terms of dollars.

[trcull]

I've got to say, I'd hate your setup as a user. I've got a thousand different things to respond to/pay/deal with every month. I'd much rather have a service I use just autorenew than have to explicitly pay for it over and over again each month.

Provided...that the service had an easy and obvious way to cancel when I wanted to.

[lsc]

> I've got to say, I'd hate your setup as a user. I've got a thousand different things to respond to/pay/deal with every month. I'd much rather have a service I use just autorenew than have to explicitly pay for it over and over again each month.

Yup. A bunch of my users have expressed the same sentiment. (I offer a fairly hefty discount for people who want to pre-pay, but I certainly understand that is a very different sort of thing.)

That's why I think it needs to be an option, selectable by the user. I think it's especially important to have the 'only keep it if I take positive action' for trials, but I think it's good policy to give everyone the option all the time.

>Provided...that the service had an easy and obvious way to cancel when I wanted to.

Yeah, also very important. Right now my process for that is "email us, we'll confirm with the email on file" which is... pretty bad. But I think the badness is somewhat ameliorated by my default billing method (e.g. if you just forget about the domain, it gets turned off and I don't get paid for any time that elapsed between when your account expired and I shut you off.) But it's still pretty bad.

[mrjatx]

You know, I thought it was really great and ethical until you mentioned that. It would be really annoying to constantly have to perform a task. I deal with that every few years when my credit card expires and it's an absolute hassle, albeit that's definitely more of a hassle than logging in and clicking "execute payment."

[sp332]

Yeah, this sentence jumped out at me: (Conveniently, lots of people seem to miss/ignore the “Your trial is expiring and credit card will be billed” emails, but no one ever misses the “Billing receipt” emails that come a few days later!)

But of course, people are missing the billing receipt emails!

[bdunn]

Some services don't send invoices (which really, really bothers me. I don't want to remember that I'm paying for a service after looking through my AMEX statements.)

Others, like KissMetrics, sends you an email a few days before billing you... but their price points start in the 3-figures.

I think a policy of "We will bill you monthly and send you an invoice every time we bill you, and we'll always refund your last month's payment if you'd like" is best.

[larrys]

"Some services don't send invoices (which really, really bothers me."

Would like to point out that separate from the fact that it bothers you and/or might not be right or ethical or whatever there is no doubt that in general in business you don't want to make it to easy for someone to think and cancel.

I don't think everyone feels that they are "ripped off" just because they didn't get notified that they were still paying for something that they agreed to.

An example is, say, with cable and a premium channel.

We decided to get showtime so we could watch Dexter. We forgot to cancel. The cable company didn't ask us each month "by the way we are still charging you for Showtime, ok?". By some of the comments in this thread it's as if people would expect that would be the "right" thing to do.

Forgetting personal responsibility for a moment if, as a business, you constantly give people a chance to bail many of them will bail (even for the wrong reason) and you will make less money.

The credit card companies by the way will approve charges even on expired credit cards. (Under a certain dollar amount you just have to put in the current month to get an authorization). Apparently they haven't found that practice to be a problem with consumers (although I'm sure they do get complaints.)

[lsc]

>Would like to point out that separate from the fact that it bothers you and/or might not be right or ethical or whatever there is no doubt that in general in business you don't want to make it to easy for someone to think and cancel.

Eh, I think if I have a product that the consumer doesn't want, I've pretty much already lost. 'extracting value' from people who aren't paying attention is best left to the professionals. I mean... the line between making it hard to cancel and outright fraud... can get fuzzy. I think it's best to make, as it were, a "Good faith effort" to insure that you are only charging people who want to be charged.

Now, you can argue that recurring billing with an easy way to cancel can count as that 'good faith effort' - It's certainly the industry standard.

If you start doing things with the goal of making it hard for users to cancel, though, you are certainly stepping outside of that 'good faith effort' - and where the line is between that and outright fraud, I do not know. I do think that my current system, with it's manual cancellation process would be unacceptable by my standards if I pulled money from customer accounts. I don't think it would be unacceptable by legal standards, but it would be well into the gray area.

[larrys]

For any individual of course it all comes down to what allows someone to sleep at night, right?

What I've found as a general rule is depending on where the line is people tend to think that someone who does something that they wouldn't do (wherever the line is for them) is either a) "really honest" or b) "a crook, cheat, dishonest etc."

Same with paying taxes. If we can assume that most people fudge a bit then someone who fudges 5 times as much is a cheat but someone who goes to extraordinary means to pay every cent is "really honest". Because it's usually in relation to how you view what you do as being "the right middle ground".

You strike me as being really honest by the way simply because (using my own ethics) you do things that I don't do more in the direction of being transparent and to the benefit of your customers at your own expense.

[lsc]

>For any individual of course it all comes down to what allows someone to sleep at night, right?

That, and risk tolerance. You could just as easily call me a coward. Especially when it comes to taxes; There are few mistakes I can make that I can't get out of through bankruptcy. Screwing up my taxes is one of those mistakes. (and I'm in a situation where my revenue, but not my profit, is fairly significant. So obviously, if a substantial portion of my revenues are ruled profits, I'm... in trouble.)

It's also, I'm given to understand, important to maintain a 'good faith effort' to pay the taxes you owe... my understanding is that has a lot to do with what happens after you are audited. If they think you intended to defraud them, that's criminal. If you just made a mistake, well, you've still gotta pay it back plus penalties, but you aren't getting a criminal record.

>You strike me as being really honest by the way simply because (using my own ethics) you do things that I don't do more in the direction of being transparent and to the benefit of your customers at your own expense.

That is the goal I aspire to... I don't always live up to those standards. Usually my failures can be attributed to (or framed as) incompetence rather than dishonesty, but... that can be difficult to determine externally. I personally see dishonesty as way worse than incompetence, even when the effect is the same, though I acknowledge and have a hard time arguing with the argument that the effect is what matters. I actually have some conflicts here because I /know/ I'm overconfident about how quickly I can get something done... but by how much? it varies a lot. Does this mean I shouldn't take jobs? I've chosen to take jobs. I pad my estimates a lot (like 2x) to cover the uncertainty, but sometimes that's still not enough. (and sometimes, it's way too much) I personally see that as a little bit dishonest. But, I don't think it's entirely unreasonable to re-frame it as incompetence, which is easier for me to swallow.

A good way, I think, for me to get around this is to take more 'pay upon completion' type projects. If I make it? great. If I don't? I don't get paid. I'd feel pretty good about that. Unfortunately, most of my good-paying contacts want to go hourly; all the per-job offers I've gotten have been... much less remunerative, for any reasonable estimate of how long the project would take.

I'm not entirely sure that a focus on honesty and transparency is entirely 'at my own expense,' though; It could also be seen as me trying to turn one of my weaknesses into a strength.

I'm sure you can get ahead by pushing that line if you are good at it... but because my line is so, for lack of a better word, conservative, once I step over my line... I have a hard time seeing where other people would set their line. I suspect (partially supported by some tentative exploration when I was younger) that I'd be bad at pushing that line. Worse-off than if I was too conservative.

I don't really see the line between the normal schmoozing and quid pro quo of enterprise sales and the unacceptable kinds of kickbacks. Pushing that line is... difficult; there's a sea of cultural norms that don't make any sense at all to me, and knowing how to give the acceptable gifts and not offer the unacceptable kicbacks is essential to enterprise sales. If you do it improperly, well, everyone sees you as very unethical, and your behavior can easily be seen as criminal. So again, here is both self-knowledge (that where other people draw that line makes no sense to me, so I can't predict where that line would be) and cowardice, in that I don't want to 'guess and check' where the consequences to being wrong are so high.

But yeah, a lot of it is also just what makes me, perhaps irrationally, feel good. I can make a pretty good living as an individual contributor, and my financial needs are small. I

A good example of how it is just irrational good feelings is that I'm mostly okay working for body shops and having someone else do all that shady shit. As long as I do my job, I feel pretty okay. I'd class this as the same variety of hypocrisy as eating meat but being unwilling to kill animals yourself.

[larrys]

One more thought that relates to what I said below "chance to bail".

As a business you might give someone a 100% money back guarantee. But the same business would never go to someone and say "by the way you haven't complained are you sure you are 100% satisfied? If not let me know and I'll give you your money back!" What do you think would happen then?

(The above is a bit of an extreme example to make a point.)

[GrinningFool]

I think you misinterpreted.

It seems to me that he's saying that he sends reminders that the credit card will be billed and people don't cancel. But as soon as they get emailed that a charge was made, they do see that email because they're quick enough to cancel and request a refund.

It sounds to me like OP is actually going a fair job of managing this. He sends notice before billing, and a receipt after. Though I might change it so that the first billing required an opt in, with daily reminder emails in the last few days.

[pionar]

Either I'm misreading your comment (entirely plausible), or you're misreading the article. I read that as a snarky way of saying that people aren't really missing the "expiration" emails, they're just too lazy to do anything about it.

[waqf]

Right, the article was saying that. But the article was jumping to an unreasonable conclusion, because of course you never hear from the people who missed the "Billing receipt" emails.

I assume that was GP's point.

[mikeash]

Indeed. There are going to be four kinds of people:

Miss both e-mails.

See both e-mails.

See the reminder, miss the receipt.

Miss the reminder, see the receipt.

All four kinds of people exist, no doubt, but you'll only hear from the last kind.