Normally when you are considering how you could increase your sales volume, rebills quite often come up as a good way to do that. A very good way. One would think why sell something for just 19.99 USD when you could sell the same for 19.99 USD per month or year? Of course, not every single buyer will keep their subscriptions intact, but if, conservatively speaking, 10% of your customers do pay regularly to you, then it means 10% higher income, RIGHT?!
It is somewhat correct.
However, the problem is that rebills can very easily bury your merchant account. Thus for a short-term profit you are potentially risking your long-term selling.
How does that happen? Many sellers overestimate attention, patience, goodwill or indifference of their customers. They (sellers) think in a way like:
“OK, I will clearly show on my offer or checkout page that it is a rebill based product/service which will charge customers $X every month, so if someone (who wouldn’t actually want to pay more than once) misses that and is rebilled, he/she will just shrug off and won’t do anything about that extra charge. In the worst case, if the customer gets upset about that, he/she will understand that it is his/her own fault for missing the part about rebills and still won’t do anything”.
The reality is that buyers is a very touchy species which can cause problems for any reason be it right or wrong. They won’t forgive anything. Below are 6 reasons why subscriptions can cause a lot of trouble:
- People miss even the most obvious notifications that they are buying a subscription.
You can write these “it is a SUBSCRIPTION” notices on every product page, checkout page, receipt letter, etc., use big, CAPITAL, bold, flashing letters to get buyers’ attention to that and still a lot of people will be genuinely shocked when they see a new rebill charge.
- People forget they bought a subscription.
It is particularly relevant for yearly subscriptions. Think about it, do you remember everything you bought a year ago? It is strongly recommended not to rebill your customers less often than every 3 months. If you need to rebill your customers every 6 or 12 months, I’d suggest asking your customers to simply re-purchase your service again. Yes, it might be a hassle for some of your customers, but it will still save you from a lot of potential chargebacks.
- People think that each rebill has to be authorized by them in advance.
A lot of people are convinced that each rebill has to be authorized by them at first. God forbid if you automatically rebill them without asking prior to that. Then they will undoubtedly raise “unauthorized” or “fraud” disputes for your rebills and even consider calling a police. No, I’m not kidding. To avoid such unpleasant situations you might want to send a prior notification about pending rebill charges.
- People expect subscription sellers to read their minds telepathically.
Some customers will decide that they do not want to continue their subscriptions anymore and that’s it. No emails or calls to you about that, no clicking on “unsubscribe” links, simply no real action will be taken to stop their subscriptions. And then once they are rebilled their first question to you will be “WHY DID YOU CHARGE ME THIEF?!!”. Actually, such message is still not the worst you can expect. Some people will go straight to their banks and fill “unauthorized” chargeback claim.
- Refund everything!
Another annoying habit some of customers have is that once for some reason they do not want to continue their subscription, they have no qualms to request refund not only their last rebill payment, but 3, 4 or 5 prior monthly payments as well.
- “I screwed up, but it’s still the seller’s fault”.
To illustrate this just let me give a recent example I saw for one of subscription sellers. His customer purchased his subscription through PayPal and everything was fine until the first rebill. Once it happened, the customer cancelled his subscription at first and then raised an “unauthorized charge” dispute claim. All this situation shows that the customer did find in his PayPal account that he purchased a subscription which clearly states that there would be a charge every month, but he still did not want to admit to himself that he missed that. And after that instead of asking the seller to refund his latest payment, he simply pretended that everything happened without his knowledge and the seller illegally charged him (when it was actually PayPal who rebilled the customer).
Do not get me wrong, there are a lot of sellers who successfully sell their subscriptions without much issues. So subscription based products/services can be very profitable both short and long term. Just know that it’s not always a straightforward path with these subscriptions, thus do take some time in implementing various techniques to prevent my mentioned causes or reasons for dissatisfaction of subscription buyers.
See you next time,