Ask HN: Should I remind users that their card is about to be charged?
Currently, if a user doesn't unsubscribe during the trial then they are automatically charged for their first month once their trial has ended.
Is it proper etiquette to warn them about this or should I just charge them and say nothing? Should I be sending them an email which says something along the lines of "Hope you enjoyed your trial. You card will be charged tomorrow."?
Edit: Just to stimulate the discussion a little bit more because it seems like the responses are one sided...
The reason I'm asking is because Optimizely recently charged my card for €168.00 after a free trial ended on me. No warning was issued. We all know how much money they make so perhaps this works out ok for them?
For completeness, they refunded immediately once I challenged the charge.
73 comments
[ 4.7 ms ] story [ 145 ms ] threadNow, let's look at the other side of it. If you do not email me, you will make some money from me in the short term. But I will ensure that I remember you for the wrong reasons. I will also ensure that if someone asks me about you, I will tell them to stay away. Heck, if I really took it personally, I will even write a hate blog and submit it on HN. Imagine the PR issues you could potentially have.
So be nice and it always comes back to help you. Even if you are not making money from a user in the short term, who knows that user might be able to help you indirectly in securing a lot more users who will pay. May be.
Pretty much by definition, if they weren't aware they were going to be charged and would have canceled had they known, they're not 'customers.'
I presume this is because by making the barrier to unsubscribe higher you get fewer people unsubscribe, and probably some people who don't use a service but remain subscribed because they don't notice.
It's also common to require x (where x is 28?) advance notification for unsubscribing, so even when you do so you usually end up paying for another month anyway.
Some services (e.g. The Times Online) give you a free (or reduced price) trial, after which you agree to a 12 / 18 month subscription. This seems even more evil, but I guess they do it because it 'works' and they're about making money rather than being nice.
The OP could use the Times model to try and convert folks to a longer-term, discounted plan if they are enjoying their trial. But too much upsell and your conversions will drop.
Even with recurring annual charges (e.g., DropBox), I like getting notification that I'm about to be charged. With new charges after a trial, it's even nicer because it's a reminder that this thing is about to start costing me money. Sometimes I sign up, try it, and then forgot about it (usually something I need occasionally like proXPN).
If it motivates you at all, anyone who cancels after receiving this notification was not likely to be a long-term customer anyway. So all you will be losing is a month's paid service from the people who don't really want to pay for your service. That's not good money to try and hold onto.
I prefer the suggestion by another person that recommends simply disabling the free trial until the person chooses to have their card charged the first time. That seems the most honest way.
When Gmail rolled out tabs, I started getting a lot of people who were unexpectedly billed. My "trial expired emails" were usually lumped into the Promotions tab, which doesn't have as much urgency attached, and thus there was definitely a spike in cancelations after that first invoice (people always see those invoice emails; they sometimes miss the "trial expiring and your card will be billed" emails :-)
When you take cards upfront:
* You'll get much higher trial to paid conversion rates. Mine was about 45%
* You'll get a lot of cancellations after that first bill goes through. If you calculate churn based off of "paid accounts who cancel", it will be artificially inflated. Try tracking it against customers who have paid you at least 2x.
* If you want to make your life a bit easier, automatically refund people who cancel within a given window after their first bill.
* Please don't bill people without sending them an email invoice. It's just wrong.
* Don't stake your business on one-off customers. If someone wants their money back, give it back (within reason, obviously. I'll by default refund the last month.) I've had people come back when they really needed Planscope, refer others, etc. And plus, chargebacks are messy.
I'm no longer collecting cards upfront, and I've finally got MRR growth back on track. I made the mistake of simply changing the signup form / billing code without making heavy modifications to the marketing site and onboarding flow, which caused a huge drop in growth after that change.
That'd be a great topic for a blog post. I don't know how to make that switch myself; I tried once and it wasn't a success.
I ALMOST went back to the safety of CCs upfront (http://planscope.io/blog/why-im-going-back-to-capturing-cred...) but ended up sticking with it. And I'm glad I did, because growth is significantly higher and there are fewer cancelations.
The big takeaway: People do more research before plugging in their credit card. If it's relatively low friction to sign up for a trial of your product, you need to make sure your onboarding flow isn't just about how to use your product, but why (e.g. the typical responsibility of your features / tour pages.)
You're arguing both sides Brennan. :) I'm confused as hell as to which worked and why.
1) Those that signed up, set up their accounts and are already getting value out of the service. They don't need the reminder, sending it is just good-will with this group.
2) Those that signed up, decided it wasn't right for them for whatever reason within the first 10 minutes, but didn't take the time to cancel. When they get the reminder and remember they're going to be charged, they cancel at this point. You've avoided the "I forgot to cancel and can't believe you charged me" problems here.
3) Those that signed up, then decided to put off actually using the account they created until later, but do intend to use it. You've reminded them to get to it sooner than later, and they still have a week to try out the service before paying for it.
And always refund customers who cancel right after the first bill. Whether you have the legal right to bill them or not is irrelevant, it's not worth the ill will. Happy ex-customers can become happy customers again in the future.
This. I signed up for an Amazon Prime trial, and forgot to cancel it (even though I'd setup a calendar reminder I missed). I remembered a week later, and was a bit unhappy that I'd been charged. I logged in to cancel it so I wouldn't be billed again the next year, and Amazon said as I hadn't used the service since they billed me they would provide a full refund.
Similarly this is why I have a preference for Square and Stripe over other similar services, my local $preferred_brand car dealership (over other local ones) and so on with other reasonable to deal with companies. At the end of the day, I'm willing to pay even a bit more if the hassle is lower, or expected to be lower should I need something 'weird' (defined as: not just purchase and walk away forever).
Generating a little bit of good feeling towards your business is totally worth some overhead cost.
Couple of days later both arrive, I offered to send one back they told me not to worry about it :)
They clearly have factored in goodwill as an offsetting benefit to any costs of selling entirely remotely.
(BTW, the best customer service I have ever experienced was from Anthro, the computer furniture company. I had used one of their desks (MDF construction) for 5 years and it was sagging in the middle. I called to complain and they apologized, explaining they had re-engineered that design with an additional support leg in the middle. They then, at no cost and no promting from me, overnighted me a replacement new-style desk ($900 desk, $300 shipping), five years into the life of the original desk. Astounding.)
Their policy is: - They know were flaws are (packaging, products, marketplace partnerships, deliveries, etc..) but still make nothing to fix them. They rather estimate that a certain amount of customers will complain and will just refund them with no questions, so everyone is happy. - During this process, flaws expenses and drawbacks are thrown on third party partners so that financially they keep up. - The result is that they look like the "wow" guys, partners take full responsibility. - The more they become a monopoly, the more they can play this game.
Quite horrible, honestly.
I don't think it's fair to say that they're doing nothing to fix them. I regularly get product and packaging surveys, and I've seen products be pulled and descriptions updated based on content in reviews or based on feedback from customer care. I've returned a product for not meeting the description, and within 15 minutes of me getting the email saying they'd received the product, credited my card the full amount, I went to the site and the product was un-orderable. Several days later, the description was corrected and the product was again orderable. That violates the "[they] still make nothing to fix them" claim I think.
I think you're ascribing a mercenary "screw it, it's cheaper to not fix" mentality when an alternative and more likely (IMO) possibility is "look, we can't fix everything, so when we fail our customers, we need to be very good at making it right".
Yes, exactly. But they don't explain it to the customer. They ship right-away another packet. Why? Because what they are actually doing is either saying to the courier "You failed to deliver in our crazy-efficient time table, we won't pay you" or to the third party seller "You failed to meet our standards, we have sent a replacement but you'll cover all expenses".
> I've returned a product for not meeting the description, and within 15 minutes of me getting the email saying they'd received the product, credited my card the full amount
Again, as above. They usually do this with marketplace products. What they did behind the courtains is saying to the seller "The product didn't meet customer expectations. We refunded it, you will pay all related expenses".
> everal days later, the description was corrected and the product was again orderable. That violates the "[they] still make nothing to fix them" claim I think. This was probably the third party seller who fixed the description to avoid paying again.
Note: At this point you say "Wow, they are just pushing sellers for quality" WRONG. Because customers are not always right :) Most of the times they are dead wrong actually (or they are just abusing the fact that they know that Amazon consider them always right). It is rotten ethic to just dump all expenses on sellers without even giving them (most of the times) the chance to reply or to take action.
> I think you're ascribing a mercenary "screw it, it's cheaper to not fix" mentality when an alternative and more likely (IMO) possibility is "look, we can't fix everything, so when we fail our customers, we need to be very good at making it right". No, i'm saying that they place crazy efficiency requirements and while they understand - as you said - that shit might happen, all they do is dumping all costs of their policy on partners. And partners can't do literally nothing. Why? Because Amazon pays out every 2 weeks, they will just keep the money from your wired amount. Because if you don't comply they just ban. And if they are the only marketplace, you are shut down.
This isn't even considering the amount of stress and pressure that this 0 tolerance policy is causing on their own employees and connected partners employees.
Amazon is absolutely taking a customer-centric approach. Intentionally.
I gather that you're a 3rd party merchant and are frustrated about the losses when bad things happen. What you're not seeing is that Amazon 3rd party sales wouldn't happen nearly as much if Amazon gave great service but buying from a 3rd party was caveat emptor.
I've not noticed any difference in customer service policies for Amazon as seller vs 3rd party as seller items. If I did, you can be damned sure that I wouldn't shop from third-party sellers if doing so meant I had to use third-party support policies. I already have that possibility-everywhere else on the internet. I choose to buy from Amazon, including 3rd party sellers, because I know Amazon will get it right or make it right.
Anyway, your points as a customer are indeed valid and obvious. Still, the way they reach such efficiency is absolutely unhealthy for the economy. On my personal side, i will avoid like hell any professional relationship with Amazon. Note: I didn't part for any of the reasons above and i don't have anything personal against it. Mine are just general thoughts after gaining some experience on their internal operations :)
The next day, Amazon sent me an email saying they noticed I had a poor connection and refunded me the rental fee.
1) a goodwill email, an up-sell to a longer-term plan or extra features, etc;
2) automatically cancel these folks, and send an email to that effect: "We notice you're not using X, so we won't be charging you at the end of your trial." They will just cause a cancellation anyway, though you will lose some of the 'free money' from lazy or unaware users.
3) Don't bill, but you could automatically extend the trial since they haven't used it, and you'll get more value from people converting to group 1) than 2). Perhaps the free trial starts when they've actually done some impactful action other than create the account.
There's way more segmenting you could do based on the types of users you see, which ones are most enjoying the service, and so on. Just seems odd these days to say "I'll email everyone" on a fixed rule.
It's amazing how often people genuinely need unused trials extending (and buy afterwards) even when it's B2B SaaS and they've already discussed why they probably need it with a salesperson.
Match.com typically take your subscription fee every 6 months, they won't remind you before they take the money. They also won't let you unsubscribe immediately after they take the money, they claim that payment is still in progress, even though the money has already been taken. It's not until a few days later that you can unsubscribe. Essentially it seems that they've realised that the most likely time for someone to unsubscribe is immediately after they pay, because with 6 months of membership it's easy to forget that you've even got a subscription unless you're a very active user.
I consider this to be a dark pattern because it plays on people's forgetfulness.
My Rules:
- Give people enough warning before taking payment that they can reasonably be able to decline the transaction. The only real reason someone should miss this warning is if they're taking a long vacation.
- Don't do evil stuff after taking payment to prevent them from unsubscribing from the next payment
- Have a nice buyers remorse window, allowing a user to reverse the transaction that's already occurred.
1) Optimizely's bad process is an opportunity for you to have something better. "All our competitors trick you so that's usual and don't be mad at us" kind of attitude is quite mediocre. 2) Showing that you care about customers would improve brand loyalty thus keep users and would benefit you in the long run, than a couple of tricky financial profits 3) It's the nicer thing to do and you'd keep your integrity.
If being sneaky with reminder emails is _what_ makes your business successful, then you are standing in quicksand.
If I like your service and it's useful to me after the free trial ends I'll sign up and add my payment details.
I'm probably just cynical before my time but I see it as preying on people who are forgetful, to take their money.
In answer to your question though. I'd send a reminder it's polite.
I know that you are not forced to be PCI compliant by law, but if you are not and your database is leaked, you will be liable for any damages that result from that leak.
Anyways, I wouldn't ask for CC at signup because your business may come across as untrustworthy or a scam when asking for such data when the user is not buying anything at the moment.
Edit: Sorry my fault, somehow ignored the part of his message stating that he is using Stripe.
Also he didn't actually say he would be storing the details, in fact he said he was using Stripe to manage the payment side of things.
[0] https://stripe.com/
Also, I think that the observation that you get much higher conversion rates from people who provide credit card info up front is debatable. It suffers from survivor bias: you might get a lot more paying customers from the group of potential customers who refused to sign up for your trial because you asked for payment info up front. That could be pushing away 95% of all your potential customers, but you'd never know it.
One possible justification: Asking for credit card info can act as a means of verification, preventing people from repeatedly creating new accounts to obtain a virtually limitless trial.