Liquid Barcodes complies with U.S. Federal Trade Commission’s (FTC) Click-to-Cancel rule, requiring subscriptions are easy to cancel
The U.S. Federal Trade Commission (FTC) announced the final Negative Option Rule, also known as the “Click-to-Cancel” rule. This rule requires sellers to make it as easy for consumers to cancel their enrollment as it is to sign up.
This regulation is effective starting May 14, 2025.
In October 2024, the FTC announced new rules, updating the outdated 1973 Negative Option Rule, in response to consumer complaints of difficult unsubscribing processes. The updated rule will apply to almost all subscription programs in any media to help consumers navigate subscriptions, memberships, and other recurring payment programs.
Federal regulations reference subscriptions and subscription-like programs as a “negative option” and define that as an offer or agreement to sell or provide any goods or services “under which the customer’s silence or failure to take an affirmative action to reject goods or services or to cancel the agreement is interpreted by the seller as acceptance of the offer.”
How Click-to-Cancel Rule Affects Retailers
The final rule provides a consistent legal framework by prohibiting retail subscription sellers from:
- Misrepresenting any material fact made while marketing goods or services with a negative option feature;
- Failing to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature;
- Failing to obtain a consumer’s express informed consent to the negative option feature before charging the consumer;
- Failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.
The final rule also:
- Eliminates a requirement that sellers provide annual reminders to renew;
- Eliminates a prohibition on sellers telling consumers seeking to cancel their subscription about plan modifications or reasons to keep to their existing agreement without first asking if they want to hear about them;
- Requires sellers to maintain records of verification of the consumer’s consent for at least three years after joining the program.
What is a Simple Subscription Click-to Cancel?
A simple cancellation mechanism is defined by the FTC as:
In-Store: “For cancellation of consent obtained in person, in addition to offering cancellation, where practical, via an in-person method similar to that the consumer used to consent to the Negative Option Feature, the Negative Option Seller must offer the simple mechanism through an Interactive Electronic Medium or by providing a telephone number.”
In App/on web: “For cancellation by Interactive Electronic Medium, the simple cancellation mechanism must be easy to find when the consumer seeks to cancel…In no event shall a consumer be required to interact with a live or virtual representative (such as a chatbot) to cancel.”
By phone: “For cancellation by telephone call, the Negative Option Seller must promptly effectuate cancellations requested by the consumer via a telephone number that is answered or records messages, made available during normal business hours.”
Why Do Customers Love Subscriptions?
Subscriptions are convenient for customers and guarantee revenue for retailers. Liquid Barcodes guarantees that our subscription programs comply with this federal regulation.
We make operating highly targeted and advanced subscription programs easy with a convenient and gamified user experience. Ultimately, this translates into higher visit frequency and gross profits for our customers. With our subscription programs, you can:
1. Leverage the most flexible and advanced solution for offers, rebates, and automation to maximize recruitment and recurring revenue.
2. Put renewals and win-back on autopilot with the most robust renewals engine in the convenience industry. Maximize customer retention with automated win-back sequences and flexible multi-user plans that build lock-in.
3. Provide your customers with a world-class user experience that maximizes customer satisfaction, visit frequency, up-sales, and in-store conversions.
About Liquid Barcodes
Liquid Barcodes is the leading loyalty platform for convenience retailers. Unlike other solutions, ours has been designed from the ground up to retain member engagement and activity. Every aspect, from the fundamental system architecture to the small details that make our loyalty apps such a joy to use, is crafted to ensure a highly personalized, gamified experience.
Our loyalty programs are so engaging and visually appealing that members remain active over time, making us better than any other solution at retaining your members’ attention. Increased attention, translates into increased impact. Ultimately, these differences will make your loyalty program a more powerful and effective tool, when you work on increasing basket size and visit frequency.
Learn more about Liquid Barcodes at liquidbarcodes.com.
About the Author
Carolyn Schnare, Chief Content Officer, Liquid Barcodes
Carolyn Schnare has been involved with the convenience retailing industry for two decades with extensive knowledge of customer engagement and marketing, sustainability, and community outreach. Before Liquid Barcodes, Schnare worked at NACS (National Association of Convenience Stores) in a variety of roles from event production to membership and most recently as Director of Strategic Initiatives and host and producer of the popular industry podcast, Convenience Matters. Schnare currently anchors the popular Future of Convenience podcast, produced by Global Convenience Store Focus media group.
