The Federal Trade Commission’s historic $2.5 billion settlement against Amazon over deceptive Prime subscription practices marks a watershed moment for the subscription economy.

While the click-to-cancel rule may be gone, that doesn’t mean the FTC gave the green light to consumers being misled or confused during the cancellation process. The FTC is still making a strong commitment to protecting consumers and preventing deceptive practices. This is evident in the ruling, as Amazon must make its cancellation “...a clear and conspicuous button for customers to decline Prime...” Businesses must prioritize customer safety and provide clear, easy to understand processes for cancelling services.  

Key takeaways

  • Compliance is a necessity no matter your size: The FTC's ruling against Amazon isn't a one-off. It's a clear warning that deceptive growth tactics are a major liability for any subscription business

  • Subscribers demand transparency and control — clear disclosures, easy cancellation, and honest trial practices

  • Recurly’s guidance: streamline cancellations, fix free trial pitfalls, and focus on personalization and retention strategies to keep subscribers engaged

How does this affect subscription businesses?

For subscription businesses, the takeaway is clear: subscriber trust is the foundation of sustainable growth. While Amazon Prime may be unique in scale, the practices that triggered this ruling are not. 

The FTC made it clear that subscription businesses need to give customers transparency:

  • Easy cancellations are non-negotiable. Consumers must be able to cancel online subscriptions as easily as they were able to sign up

  • Free trial clarity is essential. No more “set it and forget it” auto-renewals without reminders

  • Unclear cancellation flows are under the microscope. Any tactic designed to confuse or pressure customers is risky

It might seem counterintuitive, but making it hard for subscribers to leave is one of the worst things you can do for your business. A difficult cancellation process doesn’t just create a frustrating experience; it erodes trust and can permanently damage your brand’s reputation. 

Our data shows that 20% of all new acquisitions are actually returning subscribers. A smooth off-boarding process leaves the door open for that return. A difficult one slams it shut and bolts it.

How can you adjust your cancellation strategy?

Following the rules keeps you safe. Building trust makes you grow. Amazon’s misstep highlights what Recurly has long seen in subscriber behavior: customers reward transparency with loyalty. 

Make it easy to join, and just as easy to leave (or pause)

The core principle of the FTC’s original “click-to-cancel” rule remains a golden rule: it should be as easy to cancel a subscription as it is to sign up. A simple, one-click cancellation process respects your subscribers and shows confidence in the value you provide. A difficult one erodes trust and permanently damages your brand.

  • Offer a subscription pause: "Cancel" doesn't always mean "goodbye forever." Often, it just means "not right now." Our data shows that businesses offering a pause option retain over 51% of those at-risk customers. It provides the flexibility modern subscribers demand and keeps them within your ecosystem for an easy return.

Embrace flexibility over rigidity

The one-size-fits-all subscription is a relic. Today’s consumers expect to be in control, customizing their plans to fit their exact needs and budget.

  • Experiment with plan options: From "mini-subscriptions" in streaming to usage-based pricing in SaaS, flexibility is the new lock-in. The more you can tailor the experience to the individual, the more likely you are to attract and retain them. Personalization and plan flexibility  is key.

Turn the free trial into a "must-have" experience

A free trial is your first, best chance to prove your value. Don't leave it to chance. The goal is to guide the user to their "aha!" moment as quickly as possible.

  • Create a guided journey: Use in-app messaging, personalized onboarding flows, and targeted content to ensure users experience the best of what you offer. A passive trial leads to churn; an active, guided trial leads to a loyal paid subscriber. 66% of all cancellations occur within the first twelve months.

Communicate proactively and transparently

A healthy subscription relationship is built on clear, consistent communication. This is where the right tools can make all the difference.

  • Automate to build trust: Use automated dunning emails to prevent involuntary churn from failed payments. Services like an Account Updater, which automatically updates credit card information, can recover at-risk revenue and provide a seamless experience for the subscriber.

Learn from every "goodbye"

Every cancellation is a critical learning opportunity. Don’t let that data walk out the door.

  • Implement an exit survey: By asking a few simple questions during the cancellation process, you can uncover invaluable insights. Is your price too high? Is the product missing a key feature? This feedback is gold for your product and marketing teams. As we always say, a good off-boarding experience leaves the door open for a comeback.

Trust is the new growth strategy

The FTC’s $2.5 billion settlement against Amazon is more than just a fine. It sets the tone for the future of the industry: 

  • Compliance is the floor, not the ceiling

  • Transparency builds loyalty

  • Build quick time-to-value journeys for users

  • Experiment with plans, optimize win-back campaigns, and build scalable systems 

In the end, trust isn’t just good ethics. It’s good economics. And in the subscription industry, it may be the most valuable currency you can build. Want to find out more about how Recurly can help you?

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