The Unsubscribe Trap

The Unsubscribe Trap

A London newspaper allowed readers to subscribe online but required a long-distance phone call to cancel. The asymmetry is an extreme example of a common problem. The problem, as we see it, is not with the automatic renewals per se. Those can, in fact, reduce sludge. For any subscription, the presumption that the customer wants to continue the service each month seems reasonable. (Just imagine if your electricity or internet were turned off once a month unless you actively renewed your service!) When billing is annual, then we think a courtesy email reminder is the way we would like to be treated, and some of our favorite information providers do this. Doing so is a good way to create loyal customers.

The sludge comes in when the procedures for subscribing and unsubscribing significantly differ. Why can you subscribe just by entering your credit card but have to call long-distance to unsubscribe? This practice uses sludge as an intentional retention policy, which is unfortunately quite common. We asked a spokesperson for that newspaper why they had this requirement and were told that before readers abruptly ended their subscription, the newspaper wanted to be sure that they were made aware of the vast scope of its coverage. The spokesperson pointed to the paper’s sports coverage as an example. Yup, missing out on those cricket match reports would be a shame. (At the time of writing, we were happy to report that this particular newspaper had changed its policy to allow readers to cancel by sending an email. That is not as good as a one-click cancellation, but we tested it and found the rest of the process to be sludge-free.)

Many organizations appear to make this asymmetry between the ease of joining and the pain of leaving an important part of their business model. At least in the United States, gyms and cable companies are notorious practitioners of this strategy. We have heard of one case in which a gym, just reopening after a prolonged COVID-19 shutdown, required members to come to the gym in person if they wanted to cancel their membership. This is sludge with an extra helping of germs! In the case of the London newspaper, it was at least possible to find out the rules pretty easily on the webpage, but in many cases the withdrawal costs are hidden deep in the fine print. At the very least we think firms should be required to disclose the cancelation terms, and in a full-sized font. Some U.S. states have gone further. The authors report that California and New York had introduced rules requiring that any subscription that is initiated online can also be canceled online.3 We can also see some value in a type of “standard form subscription,” in which quitting is easy and free, and exceptions have to be made salient.