Practical Computer Advice
from Martin Kadansky
Volume 13 Issue 6
 June 2019
Don't Start (or Renew) Another Online Subscription Before Asking These Important Questions



To read this issue on my website, please visit:
http://kadansky.com/files/newsletters/2019/2019_06_30.html

Overview

With more and more software, products, and services moving online (becoming "cloud-based") with subscription pricing, it can be very tricky and confusing to understand exactly what you're signing up for, how it works, and what it costs.

Online subscriptions (or memberships, as they're sometimes called) aren't new, and there are a growing number of types. For example:
  • Ones that ship real-life products to you, including food, housewares, clothing, gifts, fashion, supplies, equipment, etc.
  • Ones that deliver software (or an app) to you that runs on your computer (or mobile devices), which you would install from a CD or DVD or a download, for example, tax software that changes each year.
  • Ones that offer online-only services, typically through a website or mobile app, including music, movies, live entertainment, information, education, news, bookkeeping, customer relationship management (CRM), calendar or schedule or project management, support for health, fitness, nutrition, etc.
An online-only service is often called a SaaS, which stands for Software as a Service.

You're probably paying for many of these services already. Amazon Prime, Netflix, Spotify, Pandora, Apple Music, LinkedIn Premium, QuickBooks Online, commercial antivirus software, etc. are all very popular. You're probably also reading this newsletter because you subscribe to an internet service provider or cell data service like Comcast, Verizon, RCN, Cox, AT&T, Sprint, T-mobile, Verizon Wireless, etc., all of which provide different levels of services (and equipment) for a monthly subscription fee.

The subscription model has become very popular among both product and service companies. One reason is that it can be much more profitable (and can provide a steadier cash flow) in the long term to, for example, sell access to their online software for $30/month instead of selling their computer-based software for a one-time $150 purchase. Some companies provide both options, like Microsoft.

Subscriptions have also become popular among consumer and business end-users for many reasons, including: The ability to choose among different subscription levels lets you pay only for what you need or use, online access enables you to use the service from any computer or mobile device at any time of day or night, and to more easily collaborate or share information with others, anywhere in the world.

Read on for my general advice on what you should ask about such subscriptions, depending on your situation. Remember that only you can evaluate what services and features (if any) fit your needs, perhaps in conjunction with someone that you know and trust and who actually listens to you.

Basic subscription and feature questions

Whether you're signing up for the first time or you're already a subscriber:
  • Does the subscription provide you with something that you really need or want? Are you sure that you don't already have something similar in place?
  • Do you understand the various levels that they offer? Which level is the best fit for you? Are those additional features or content (or eliminating the advertisements) worth the higher price?
  • Can you change the subscription level later, especially in the middle of a billing period? If you move up, what more will it cost? If you move down, do you get a proportional refund, and are there any other consequences, e.g., will you lose any data?
  • Are you sure that you are actively using every one of your current, paid subscriptions? Do any of them unnecessarily overlap in what they provide, or add features that you really don't need? For example, do you (perhaps unintentionally) have multiple premium antivirus programs, multiple Netflix accounts, etc.?
  • How do you contact customer service? What if you have a problem or dispute? Do they guarantee delivery or satisfaction or 24/7 access? Can you find independent reviews of the service?
  • Is there an option to get what you want without having a subscription at all? For example, Microsoft Office (which includes Word, Excel, PowerPoint, etc.) is currently available in two forms: as the subscription-based "Office 365" (with different levels for home and business users), and also as one-time-purchase software packages "Office Home & Student" and "Office Home & Business."
  • Are you looking at the company's actual website, or a fake created by a scammer?
"Freemium" and free trials

A portmanteau (blend) of the words "free" and "premium," the "fremium" subscription model has become very popular. It's simply a subscription or membership with multiple levels where the lowest level is free, and the higher (premium) levels require payment. Examples include Amazon (vs. Amazon Prime), Gmail (vs. G Suite, formerly Google Apps), Dropbox, Apple iCloud, AVG antivirus, MalwareBytes Anti-Malware, LinkedIn, and numerous dating, fitness, education, and newspaper websites or mobile apps.

Whenever you see the word "free," you should ask:
  • What is included, and is it practical for actual use? For some services, like Amazon, Gmail, and Dropbox, the free level offers quite a good level of service and features, but for many others it's so limited that you will probably be very motivated early in the process to pay for a higher level to get any value out of using it. This is also a very good reason to research their competitors to look for a better deal. On the other hand, some companies' websites can make it difficult even to find the free option.
  • What's the catch? Even though a free level may not require payment, apart from its limited features it may also "cost" you in other ways. When you sign up, it's common to supply your name and email address, but additional personal information beyond that might not be reasonable, including your credit card number. The free level of a service may also be loaded with advertisements, not only for their own higher subscription levels but also for outside or unrelated products or services, or it may (intentionally) operate (or ship products to you) more slowly.
When a service has a "free trial," that implies that the company gives you a limited period of time when you can try out the service before having to start paying for a subscription. This is a great opportunity to take the service for a "test drive." You should ask:
  • What is the free trial period? It's typically only a few days or weeks, so the shorter the time, the more you should plan your time carefully.
  • What else is limited during a free trial? In addition to the limited time period, some free trials also restrict the functions that you can perform or limit the quantity of data that you can create, but others are "unlimited," permitting you to use every feature to its fullest.
  • At the end of the given time period, does the free trial simply stop on its own, or do you have to proactively cancel it to prevent them from starting a premium subscription and charging you? This is more likely if you were required to give them a credit card number at the start.
The costs

Understanding what you're paying for a subscription can be complicated.
  • Does it have a lower initial or introductory rate that later rises to a regular or higher rate?
  • Is paying monthly the only option? Is there a discount for paying annually, or for multiple years? Multi-year discounts are fairly common among website hosting companies.
  • For an annual subscription, do they offer auto-renewal? Is it activated by default? Can you turn it off? Remember that no matter what they promise about the convenience of your "never" missing a renewal, auto-renewal cannot work if your credit gets canceled, replaced, or it expires, and the subscription company may or may not notify you if your auto-renewal fails for one of those reasons.
  • If the company requires auto-renewal on your annual subscription and you don't want that, you can prevent it from happening yourself, either by using a credit card that will expire soon, or if your credit card company permits you to create a "disposable" or virtual credit card number, you could create one and set the expiration date to a month or two from now. Either method would guarantee that 12 months from now that renewal will fail unless you supply a new number.
  • Will sales tax be added to the cost? This depends on what state you're located in, and whether the service you're using has kept up with the laws governing whether their product or service is subject to local sales tax.
  • Most companies require a credit card to pay for a subscription, but many accept alternate methods like PayPal (which keeps your credit card number private), some accept a debit card (which enables the company to take payment directly from your bank account), and a few accept a check in the mail, most often to fund a prepayment balance.
  • If a friend (who's also a subscriber) referred you, can they get a reward for that? If so, how can you make sure that that happens as you're signing up? Can you get a reward for referring others who sign up?
Canceling a subscription

Stopping a subscription can also be complicated and confusing. If you cancel:
  • Do you get a partial refund for the remainder of the current billing period? If not, before signing up for an annual plan (where, depending on the timing, you might forfeit a sizeable portion of the annual cost if you were to cancel), it might be prudent to pay monthly until you're sure that the service is a good fit for you.
  • Does the service stop immediately, or does it continue through the end of the current billing period?
  • Exactly where and how do you cancel? Directly with the vendor? The payment processor (e.g., PayPal)? The platform or intermediary (e.g., Apple's iTunes and App stores, Google's Play Store, etc.)?
  • What are the exact consequences of canceling? Can you keep (or download) any products or data that you've been using, or do they cease to function or disappear forever? If so, does that happen immediately, or is there a grace period during which you can change your mind?
  • What if your subscription expires accidentally? You didn't intentionally cancel, but perhaps you had auto-renewal turned off, or your credit card expired before the renewal. Do you get notified and have a chance to correct that?
  • Unscrupulous vendors may continue charging you even after you cancel, so keep a copy of any cancellation confirmation, and check your next credit card bill to confirm that the charges have actually stopped.
Don't cancel your HP Instant Ink subscription just yet

Here's an example of a surprising consequence of canceling a subscription:

If your HP printer supports it, the HP Instant Ink program sounds useful. You put your printer on your wireless network, sign up for the program, and pick your plan level. The monthly cost is based on the number of pages you expect to print each month (plus a surcharge if you exceed that), not on the cost of the cartridges. Your printer notifies HP over your internet connection how many pages you're printing, and when it runs low on ink it also tells HP, which then ships ink cartridges directly to you at no extra cost.

I have a client who asked me to help him cancel his subscription after using it for a couple of years, primarily because he wasn't printing as much as he used to. Before we canceled, his printer worked just fine. After we canceled, his printer would no longer print because it refused to use the cartridges that he had bought through this program. The online cancellation screen did not warn us that this would happen.

I later found the following note on an HP support page (outside of the HP Instant Ink area): "You can cancel or change plans at any time without penalty. HP Instant Ink cartridges do not work after the service has been canceled and the final billing cycle is complete."

Had we been told this at the time, my client might have chosen to wait until the last day or two of the current (or a later) billing cycle before canceling in order to get the most from those cartridges, and he would certainly have bought replacement cartridges from a local store in advance so he could continue printing without interruption.

Where to go from here
  • To find reviews of a service (whose name is "X") as well as its competitors, google: X review OR compare OR competitor OR competition
  • If you're curious to (carefully!) explore the world of online subscriptions, google: popular subscriptions
  • If you can't figure out whether a given company offers a free subscription level, try googling the company name (or web address) plus keywords like "free" (which unfortunately may find their free trial instead) or "compare" (which might find a chart comparing the levels they offer, which might include a free option).
  • Similarly, if you can't figure out how to cancel a given subscription, contact the company or google its name plus the keyword "cancel"
  • I recommend examining your credit card bill every month so that you're aware of what you're being charged for. Any single credit card bill will probably list your various monthly subscriptions, but you'll need all 12 of them for a given year to find all of your annual ones.
  • http://www.kadansky.com/files/newsletters/2012/2012_06_27.html - "13 Reasons I Don't Like Cloud (Online) Backup and Storage Services"
  • http://www.kadansky.com/files/newsletters/2010/2010_12_29.html - "Does using your credit card online make you nervous? How to use temporary credit card numbers, also consider PayPal"
How to contact me:
email: martin@kadansky.com
phone: (617) 484-6657
web: http://www.kadansky.com

On a regular basis I write about real issues faced by typical computer users. To subscribe to this newsletter, please send an email to martin@kadansky.com and I'll add you to the list, or visit http://www.kadansky.com/newsletter

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I love helping people learn how to use their computers better! Like a "computer driving instructor," I work 1-on-1 with small business owners and individuals to help them find a more productive and successful relationship with their computers and other high-tech gadgets.