The "Oops Factor" and How Companies Make Money With Opt-Out Agreements

Have you ever gotten a charge on your credit card that you didn’t expect, only to find that it was for a subscription you never signed up for? Many businesses these days sign people up for subscriptions with confusing opt-out options. You may not even realize you were signed up until after you get the bill.

An Instant Subscription

Kathleen was being responsible and not going shopping during this pandemic. Instead, she used Instacart. She was happy to use their pickup service instead of delivery, because with any order over $50 there was no shopping fee. And, of course, without delivery there was no delivery fee. It seemed like a great deal. Until she got the bill.

After using the free pickup option twice, Kathleen was surprised when her credit showed a charge for $99 for an annual subscription to the Instacart delivery service. It turns out that she had automatically been signed up for the delivery service when she created an account for the pickup service. Once Instacart had her credit card information, it was easy for them to automatically bill her for the subscription service.

In this case, Kathleen was aware that she had signed up for the subscription at the time she made her first purchases. But the drop-down menu that would allow her to opt-out was not working.

Kathleen might have been able to afford the fee, but she was worried about those for whom $99 is a lot of money for a service they never intended to sign up for. So she called TrustDALE to look into it.

A Quick Solution

We reached out to Instacart, and they gave us one of the quickest resolutions we’ve ever seen from a large company. Within just a few minutes, the claim was escalated to the appropriate agent to solve our problem. And within just an hour and a half, Instacart cancelled the subscription and refunded Kathleen’s money.

The Oops Factor

Kathleen’s story is not unique. In fact, what Instacart did is something many, many businesses do. Instead of asking you to opt-in to a a subscription service, they ask for your payment information when you sign up, even for a free trial. Then, when the free trial is over, they bill your card without asking. The only way to avoid signing up for a paid service is to actively opt-out.

The opt-out system is a money-maker for many businesses. They rely on the fact that many people will not remember to opt-out, and those people become paying customers without even knowing it. In many cases, consumers forget to opt-out, and once they receive the product or service they accidentally signed up for, they like it and they keep the subscription. Whether you pay for a subscription because you forgot you are paying for it or because you were surprised with a service and enjoyed it, it’s a fantastic way for businesses to gain new customers.

We call this the oops factor, as in, “Oop! I forgot to cancel that.” It’s a business model that works for many companies. In most cases, it’s hard to get out of a payment once you’ve made it. So be sure to read your free trials and signups carefully before you hit ‘OK’.