A Berlin vitamin startup once got hit with a massive €50,000 fine for hiding their cancel button. Yes, you read that right - €50,000 just for making it hard for customers to cancel their subscriptions.
At Firmhouse, we've seen these new rules reshape the subscription landscape. The message from the EU is clear: make cancellation easy or risk paying the price. If you sell subscriptions to European customers, these rules affect you, even if your incorporation is elsewhere.
Europe isn't just suggesting better practices, they're demanded with serious penalties. Here's what you need to know:
The EU is finalizing the Digital Fairness Act with one crystal-clear principle: canceling must be as easy as signing up. It will become the law across all EU states, and it's important to be aware of the implications for your subscription program.
Germany's "Kündigungs-Button" law has been catching businesses off-guard since July 2022. It's a strict law that demands:
With fines up to €50,000 per violation, Germany isn't playing around.
France took a slightly different approach in 2023 with their three-click rule:
Face fines up to €75,000. We've seen French authorities actively investigating subscription sites, making compliance an urgent priority.
The UK just raised the stakes dramatically with penalties up to 10% of global revenue for subscription traps. For larger companies, that could mean millions in fines for poor cancellation experiences. With margins at an all-time low, something to consider seriously.
It's important to be compliant to these rules. There are luckily simple ways in doing so.
The HelloFresh approach: a persistent cancellation link in the footer of every logged-in page. This foolproof method ensures customers can always find the exit, no matter where they are in your experience.
Our favorite approach: create a clean "Manage subscription" section that houses all account actions together:
This method satisfies all European requirements while giving you opportunities to offer alternatives before customers fully cancel. It's the key to building a strong relationship, and offering a way out if your customer really wants it.
Include an easy e-mail for customers to contact you in all communication. Don't communicate from a ''no-reply@yourbusiness.com" but always allow customers to hit reply and have support on the other end of the line.
Most importantly: Your cancel button should match your buy button in size and visibility.
Making cancellation easy sounds counterintuitive, but there are clear upsides for your business and customers that you wouldn't expect.
When potential customers see "Cancel anytime" during signup, conversion rates typically increase 20-30%. Which makes sense, if you know you can easily leave, you're more likely to try something new. Offering easy cancellation and subscription management options is the most powerful conversion tool.
Offering easy ways to manage and cancel subscriptions result in less support requests, a win for all customer support team, even if you already have great AI flows implemented. Less tickets, is less cost in your business. Both you and you customers win with having less friction in the process.
Here's the marketing secret the subscription giants know: customers who leave smoothly are more likely to return later.
Data shows subscribers who had a positive cancellation experience are 3x more likely to reactivate when their circumstances change. By making cancellation painless, you're actually setting up future sales opportunities.
Smart businesses learn from cancellations. It's the best source for information on where your product or experience should be improved. A well-designed cancellation flow collects valuable feedback that informs you with clear improvements to be made.
Ready to get compliant? Here's our battle-tested process:
With Firmhouse you easily configure this to your needs.
We help merchants set up subscription flows, and these compliance failures appear constantly:
Each of these mistakes can trigger investigations and penalties. We've designed Firmhouse to eliminate these risks automatically.
Most subscription platforms were built for the US market, where regulations are only now catching up to Europe. Luckily we have European compliance in our DNA:
Our merchants sleep better knowing their operations are compliant across all European markets.
The subscription businesses winning in Europe embrace these regulations to be successful and win the market.
We believe the best subscriptions retain customers through value, not through friction. When customers stay because they want to, not because they can't figure out how to leave, you build a more sustainable business.
Want to see how simple European compliance can be? Book a demo today and we'll show you how Firmhouse can help.
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