The high cost of subscription binges: How businesses get rich off you forgetting to cancel


Not a weekend goes by that Theresa Krakauskas isn’t unwinding with TV. Lucky for her, there’s plenty to choose from: “Mad Men”on AMC+. Horror movies on Netflix. Or another rewatch of the hit Broadway play “Hamilton” on Disney+. 

In all, she subscribes to nine streaming platforms. That’s in addition to a Barnes & Noble subscription to get discounts on e-books, a Freekibble subscription to donate food to shelter animals and a premium account for the virtual pet website Neopets.

Welcome to the subscription economy. How many subscriptions are you paying for? You may have more than you think.

It’s not just streaming services Hulu, Netflix and Apple TV+. Like the gym memberships and magazine subscriptions of yore, we binge digital subscriptions, whether for meal kits, clothing, toys or ride-hailing services. 

Netflix and Hulu apps are displayed on an Apple TV system.

Then those businesses charge our credit and debit cards month after month with the relentlessness of metronomes − whether we are still using these services or not.

According to some estimates, the subscription economy has more than quadrupled over the last decade. 

Subscription costs soar: You may be paying more than you think

Subscriptions offer convenience and access to premium features, but they can also be costly. 

Meredith Martin, of Silver Spring, Maryland, remembers when her Disney+ subscription was about $80 per year. After price hikes, she’s paying $140.

“When Disney+ first started I was like, ‘Oh, wow, 80 bucks and all these movies. That’s amazing,’” Martin, 40, said. “Now that it’s $140 I’m like, ‘Oh God, well, we’re sucked into this and my kids love ‘Bluey.’ So here we go.’”

Research shows that the average consumer spends $219 on subscriptions every month. That’s $133 more than they realize, according to a 2022 survey from C+R Research.

Many people keep paying for subscriptions they don’t use

Consumers often lose track of the myriad services they subscribe to. 

Nearly three-quarters of consumers say it’s easy to forget about recurring monthly charges. Some 42% say they forgot about subscriptions and kept paying for them even though they were no longer using them.

Recurring charges from unwanted free trials, auto-renewals and monthly subscriptions can be a dead weight on budgets already squeezed by higher prices.

Krakauskas said for years she paid nearly $75 annually for subscriptions to three magazines that she was no longer reading. She finally remembered to cancel the subscriptions in October.

“Christmas is coming. I was like, I need to cut back on some stuff,” she said.  

Theresa Krakauskas said for years she paid nearly $75 annually for subscriptions to three magazines that she was no longer reading. She finally remembered to cancel the subscriptions in October.

Netflix, Disney+, Hulu price hike:With cost of streaming services going up, how to save.

Businesses cash in on our carelessness

Inertia or forgetfulness can be lucrative for companies, boosting revenues from 14% to more than 200%, new research from economists at Stanford University and Texas A&M shows.

“While subscription products may provide convenience benefits to consumers, they may also allow firms to exploit inattentive subscribers,” researchers said. 

Cancellation rates jump when consumers are prompted to make a renewal decision, according to the study. 

People are four times more likely to cancel a subscription when they are prompted to make an “active choice” such as when a credit card expires, Stanford economics professor Neal Mahoney told USA TODAY.

“If you look at other purchases on the card – gas, groceries, brick and mortar retail – those don’t fall off,” he said.

He says he only has to look as far as his own life for an example. 

“I signed up for Paramount+ to watch Champions League soccer during the winter and spring last year, but then of course in the summer I forgot to cancel. So for six months I forgot and then a couple months ago, when the sports season started again, I said, ‘I should sign up for Paramount+. Oh wait a minute, I am signed up,” Mahoney said.

Breaking up with a subscription can be hard to do

But the struggle can be all too real when it comes to canceling a subscription. The prospect of hours-long calls to customer service or multi-step hurdles online can lead to procrastination. 

In fact, federal regulators say breaking up with a subscription can be too hard to do.

While some subscriptions can be canceled with a couple clicks or a phone call, when companies make it difficult to cancel a subscription, customers can end up with monthly charges long after they no longer want or need a product or service, said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.

Levine says that’s by design. Unwanted subscriptions have become such a headache for consumers, a cottage industry of apps to help subscribers find and cancel subscriptions has emerged, he said.

“We know signing up for subscriptions is so easy, it is miraculous. That is why we know that the difficulty of cancellation is not an accident. It is a choice. And it’s a choice that’s causing real harm to consumers,” he told USA TODAY.

In June, the consumer watchdog sued Amazon, alleging it duped consumers into enrolling in Prime using “manipulative, coercive or deceptive” tactics known as “dark patterns” and then made it “knowingly complicated” to cancel. 

The FTC in June sued Amazon, alleging it duped consumers into enrolling in Prime using “manipulative, coercive or deceptive” tactics known as “dark patterns” and then made it “knowingly complicated” to cancel.

Amazon denied the FTC’s claims. “The FTC’s claims are false on the facts and the law,” Amazon spokesperson Tim Doyle said in a statement. “The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership.”

Levine declined to comment on the litigation but said the alleged practices are not unique to Amazon. In 2023, the FTC said it received more than 30,000 complaints about “negative option” memberships or subscriptions – when consumers agree to be automatically billed for a free trial or for a discount and billing stops only after they proactively cancel.

The FTC is sending Vonage customers nearly $100 million in refunds after the agency said the internet phone service provider made it hard to cancel the service. In 2020, online learning app ABCmouse agreed to pay $10 million to settle FTC charges that it did not tell consumers that the subscription would automatically renew.

‘Core pocketbook issue that affects so many Americans’

The FTC has proposed a new “click to cancel” rule that would make it as easy to cancel a subscription as to start one, Levine said.

The rule would require businesses to make the cancellation process similar to the sign-up process; so if a customer signs up online in a three-step process, they must also be able to cancel online within three steps. No more one-click process to sign up and a lengthy phone call to cancel.

Sellers would also need to send annual reminders to customers receiving non-physical goods before their subscription is automatically renewed, and must ask for permission before pitching any additional offers or modifications to a consumer trying to cancel. 

Levine said he recently realized he had been paying for a rental car service that he hadn’t used in more than a year. 

“This is a core pocketbook issue that affects so many Americans,” Levine told USA TODAY. “It is time for consumers to be able to reclaim control over their pocketbooks. And that starts with reclaiming control over the subscriptions.”

The FTC has collected more than 1,000 public comments, and Levine says the vast majority are positive though it has gotten significant pushback from industry players. 

Trade groups: Federal Trade Commission ‘click to cancel’ rule not needed

Trade groups say a multi-step cancellation process protects consumers or lets them take advantage of a better deal. In a comment submitted to the FTC, the News/Media Alliance which represents publishers said automatic renewals of newspaper and magazine subscriptions “does not result in pervasive complaints and dissatisfied consumers.” 

The Association of National Advertisers said the FTC rule could cause more headaches for consumers such as accidental cancellations.

But some organizations don’t think the FTC is going far enough. 

“The problem with free trial conversions and recurring subscriptions is that it really removes an affirmative consumer choice from the equation,” said Erin Witte, director of consumer protection for the consumer advocacy group Consumer Federation of America.  

The National Consumers League, a consumer advocacy organization, sent a letter to the FTC in June urging the agency to make the proposed rule even stronger by requiring businesses to ask for consumers’ consent for automatic charges within six days before a free trial converts into a paid subscription and to give consumers a heads up before they are issued each recurring charge.  

“No honest business should depend on their customers forgetting that they’re paying money to turn a profit,” reads a statement from NCL Public Policy Manager Eden Iscil.

Pam Davis, a 40-year-old mom from Petoskey, Michigan, recently went through her bank statements and discovered that she was paying nearly $50 per month for four services she didn’t realize she was subscribed to. 

She said one subscription to a local newspaper took her almost 45 minutes to cancel on the phone.

Pam Davis of Petoskey, Michigan, recently went through her bank statements and discovered that she was paying nearly $50 per month for four services she didn’t realize she was subscribed to.

“You think, what’s $5 here and there? But it’s not just $5. It’s $10 and $15. It really adds up,” she said. 

How can I find all my subscriptions?

Regularly monitor your debit card and credit card statements. Also check all the services billed through Apple or Google stores. 

How do I check my subscriptions in the Apple App store?

On your iPhone, go to settings, tap profile then subscriptions. Make sure you have checked the box marked renewal receipts so you are alerted. 

How do I manage my Google Play subscriptions?

On an Android device, go to the Play store, tap the menu icon and look for subscriptions.

How do I stop unwanted subscriptions?

Keep an eye out for renewal notices and notices about price increases in your inbox. Set up calendar alerts to avoid automatic renewals. Use a subscription management app.


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