One-in-three consumers have cancelled subscription due to billing issues
Payment issues are the number one reason for consumers canceling their subscription service.
That’s according to new data from payment processing platform Solidgate, which revealed that one-in-four consumers surveyed have had upsetting unexpected charges from a subscription service, and 80% wouldn't recommend a subscription service to a friend if they had trouble canceling it. A third of consumers said they canceled a subscription service in the last year due to billing frustrations.
[READ MORE: Federal government streamlines subscription cancelation]
Seven-in-10 consumers said they would give up a subscription service if they had problems processing their payments. Just over half of respondents (51%) said they felt businesses did not give enough time before canceling a customer’s subscription due to payment issues, suggesting that some businesses may be canceling memberships too early.
"Our research reveals the delicate balance between challenges and opportunities in the subscription economy,” said Yuri Alekseev, CEO and co-founder at Solidgate. "While subscriptions are a convenient model, even the slightest payment issues can quickly erode customers’ trust and loyalty. What’s more, businesses might not even know they are making these mistakes.”
More than 50% of those surveyed think businesses don't give them enough time to resolve payment issues before canceling a subscription. Similarly, 60% felt they were not offered enough information when there were issues with their payments. The wide majority (84%) of those surveyed said that businesses should offer more flexible billing dates to avoid declined payments.
Almost half (44%) of respondents said they ended up keeping unwanted subscriptions because they found it too difficult to cancel. A similar number (47%) of respondents check reviews about ease of cancellation before signing up to a new subscription.
“In today’s subscription economy, the payment process is no longer just a backend function – it is vital to driving revenues,” added Alekseev. “Businesses that deliver smooth, secure and flexible payment experiences can secure their advantage, reducing churn and boosting their brand reputation."
Solidgate surveyed 1,000 U.S. adults for the report.
