Why Companies Make It Impossible to Cancel Subscriptions
Amazon just paid $2.5 billion to settle Federal Trade Commission charges that it tricked millions into Prime memberships, then
Amazon just paid $2.5 billion to settle Federal Trade Commission charges that it tricked millions into Prime memberships, then made cancel subscription attempts so difficult that customers gave up. Between 2019 and 2025, Amazon forced customers through what the FTC called a 4-page, 6-click, 15-option maze just to cancel subscription services. Amazon itself compared the process to reading Homer’s Iliad.
Amazon isn’t alone. Every subscription business deliberately makes it harder to cancel subscription services than to sign up. It’s profitable. Stanford economists found that customer forgetfulness and frustration boost revenue by 30% to 200%. Most companies generate 30% to 80% more revenue simply because people can’t figure out how to cancel subscription payments.
The Business Model of Confusion
Americans now pay $220 monthly for recurring subscriptions, excluding cable and utilities. Research shows consumers are only aware of about 40% of that spending. Nearly half of all Americans have forgotten to cancel subscription trials at least once. The average person wastes $10.57 per month on unused subscriptions they meant to cancel subscription months ago.
Stanford researchers discovered the pattern by studying credit card replacements. When customers got new cards and had to actively update payment information, cancellation rates spiked. People who had to consciously decide whether to continue often chose to cancel subscription services. The conclusion: when companies remove friction, customers leave. So companies add friction.
How They Make Cancel Subscription Impossible
Planet Fitness requires a certified letter or in-person visit to cancel subscription memberships, despite allowing instant online signup. Adobe’s “Annual, Paid Monthly” plan shows a monthly price but locks customers into year-long commitments with hefty early termination fees. The FTC sued Adobe in June 2024, naming two executives personally responsible for the deceptive practice.
The tactics are predictable. Companies bury the cancel subscription button under multiple submenus with misleading labels like “Manage Membership” instead of “Cancel.” They force customers through multiple retention screens, each requiring a separate rejection. They use emotional manipulation, showing what content customers will lose or suggesting their health goals will fail without the service.
When customers do find the cancel subscription option, companies often require phone calls during business hours, support tickets that take days to process, or navigation through deliberately confusing interfaces designed to exhaust patience.
The Revenue Machine
The math is simple. If 30% of customers who want to cancel subscription services give up because it’s too difficult, that’s 30% more revenue. For a company with 10 million subscribers paying $15 monthly, subscription cancellation friction generates $540 million annually in revenue from people who actively tried to leave.
This explains why companies fight so hard to maintain complex cancellation processes. The FTC received 70 complaints per day about subscription practices in 2024, up from 42 per day in 2021. The surge prompted new regulations.
What’s Changing
The FTC’s “Click to Cancel” rule, finalized in October 2024, requires companies to make cancel subscription processes as easy as signing up. If customers can subscribe with three clicks online, they must be able to cancel subscription services with three clicks online. No phone calls. No certified letters. No multi-page retention gauntlets.
Companies must obtain clear consent before charging, explicitly disclosing automatic renewal terms. Any misrepresentation about subscription terms, costs, or how to cancel subscription services violates the rule. The FTC can seek $51,744 in civil penalties per violation.
Industry groups immediately challenged the rule in federal court, arguing it imposes unreasonable burdens on businesses. Their position: companies need the ability to present “valuable information” during cancellation attempts. Translation: companies want to keep exhausting customers with save offers until they give up trying to cancel subscription payments.
The Industries That Depend on It
Gyms pioneered subscription cancellation friction decades before the internet existed. The traditional gym business model counts on 70% of members never showing up. Making cancellation require in-person visits during limited hours ensures people keep paying for memberships they don’t use. Planet Fitness, with 18 million members, generates substantial revenue from people who can’t be bothered to mail a certified letter.
Streaming services adopted the model digitally. While Netflix made cancellation easy, competitors learned the wrong lesson. Services multiplied. Disney+, Hulu, HBO Max, Paramount+, Peacock, Apple TV+, and dozens of smaller platforms all bet that subscription fatigue would keep customers paying even when they weren’t watching. The average household now subscribes to 4.5 streaming services but actively uses fewer than 3.
SaaS companies took subscription cancellation friction to new levels. Enterprise software often requires talking to account managers who pitch retention offers. Even consumer SaaS products bury cancellation options, require export of user data before canceling, or threaten permanent deletion of content to scare customers into staying.
The newspaper industry, facing collapse, embraced aggressive subscription tactics. Digital newspaper subscriptions often require phone calls to cancel, with customer service representatives trained to spend 20 minutes trying to save the subscription. Many newspapers only allow cancellation during specific hours, making it nearly impossible for working people to reach a representative.
Why Companies Fight Back
When California passed subscription cancellation rules in 2018, requiring businesses to allow online cancellation if they allowed online signup, companies adapted by making signup require phone calls too. The workaround preserved friction while technically complying with the law.
The Interactive Advertising Bureau and National Cable & Telecommunications Association filed formal challenges to the FTC’s Click to Cancel rule in the Fifth Circuit Court of Appeals. Their argument: the rule imposes “onerous regulatory burdens” by requiring businesses to make subscription cancellation as easy as signup.
Read that again. Industry groups argue that making cancellation as easy as signup is an unreasonable burden. The statement reveals how much revenue depends on difficulty. If cancellation friction didn’t generate substantial profits, companies wouldn’t spend millions fighting regulations that eliminate it.
The FTC noted that businesses removed the most aggressive retention tactic from the final rule. The proposed version would have prohibited any save offers unless customers explicitly consented to see them. Industry outcry was so intense that the FTC backed down, allowing companies to present offers during cancellation as long as they don’t interfere with the actual cancel subscription process.
Even with that concession, companies are fighting the rule in court. The case will determine whether the FTC has authority to regulate subscription practices or whether companies can continue profiting from confusion and frustration.
The International Perspective
European Union regulations already require easy cancellation under the General Data Protection Regulation. Companies operating in Europe must provide cancellation mechanisms as accessible as signup processes. The UK implemented similar rules. Australia passed subscription regulation in 2022.
American companies often maintain two different cancellation systems: easy cancellation for European customers to comply with GDPR, difficult cancellation for American customers to maximize revenue. Amazon’s Prime cancellation process in Europe requires fewer clicks than the American version that led to the FTC settlement.
This split system proves companies can implement easy cancellation when forced. The technology exists. The infrastructure works in Europe. American companies simply choose not to use it domestically because regulations haven’t required it until now.
As more countries implement consumer protection rules, the argument that easy cancellation is technically difficult becomes harder to maintain. Companies that claimed one-click cancellation was impossible in the United States somehow achieved it in Europe overnight when regulations demanded it.
Primary Sources:
Stanford/NBER Study on Subscription Inattention
FTC vs Amazon Prime Settlement
NPR: Subscription Cancellation Report
C+R Research Consumer Subscription Data
