Merchants offering subscription-based products or continuous services need to comply with the following laws;
- California’s recently amended automatic renewal law (ARL), which took effect July 1st of 2022.
- New York's ARL which includes similar requirements to California’s ARL.
The newest update to California’s ARL includes additional notice and cancellation requirements for free trials, as well as automatically renewing subscription plans.
This document will walk through the requirements of both ARLs and highlight the services MINIBC offers to help merchants offering subscription based services to be compliant.
Note that the paper does not constitute legal advice or evaluation.
New Subscriber Notifications
Keeping new subscribers informed is important and covered within both California and New York’s ARL. MINIBC has specific notifications available to make sure you have the ability to cover the requirements.
Subscription signup notification: MINIBC offers this notification to make sure new subscribers receive the required information upon signup of a new subscription.
Upcoming renewal notification: MINIBC offers this notification to make sure subscribers receive the required information when a new renewal is upcoming. Merchants can customize how early they want this email to go out. We recommend 3 days to align with California ARL requirements.
Upcoming renewal notification | Free trials and promotions: Subscriptions that contain free gifts, trials or discounted initial pricing are required to send a reminder notice between 3 and 21 days before end of the promotion or trial period. Merchants that leverage these workflows will soon be able to use a new upcoming charge price notification trigger. This new template will contain information informing customers of the price of their upcoming charge if the price has changed since the initial sign-up.
1+ year upcoming charge notification: Subscriptions that renew every 1+ year will now require an upcoming charge notification between 15 and 45 days in advance of the recurring charge. MINIBC will be providing merchants with the option to enable this additional notification, distinct from upcoming renewal notifications of shorter subscription terms.
You can find pre-written templates for these and all of our email events here to make sure you’re including the required information.
Allowing subscribers to easily cancel a subscription is at the heart of both California and New York’s ARL. MINIBC specifically makes it easy for subscribers to cancel their subscription and also allows merchants to include their own custom canceling marking flow if they so choose.
Outlined in both California and New York’s ARL are specific subscription presentation and term notification measures that must be met. Below we’ll highlight these items to make sure you’re aware of them. MINIBC is able to assist merchants that require additional theme development to meet the requirements.
When presenting subscriptions options/offers within BigCommerce store the following need to be taking into account:
- You (the merchant) need to request and obtain the consumer’s affirmative consent to the subscription or (offer) terms in close proximity to making these material disclosures and prior to the point of billing the consumer.
- You also need to make sure the following elements followed:
- That the subscription or purchase agreement will continue until the consumer cancels.
- The description of the cancellation policy that applies to the offer.
- The recurring charges that will be charged to the consumer’s account as part of the automatic renewal plan or arrangement, and that the amount of the charge may change (if true) — and to what amount, if known.
- The length of the automatic renewal term or that the service is continuous, unless the length of the term is chosen by the consumer.
- The minimum purchase obligation, if any.
The below shows a confirmation of subscription (there should also be one at checkout). This both informs and requests confirmation from the custom that they do indeed with to move forward with a subscription. It also clearly links to the terms available that further define the program.
This next example shows a simple subscription option presentation; noted are the discount (10%), the terms and conditions; both in terms of commitment (cancel any time) and a link to the full subscription terms via the Learn More link.