Forgotten cancellations: The stakes are higher than just a monthly fee

My Nguyen

2nd Oct 2025

The average consumer now spends approximately $3930 a year on subscriptions, a figure that is fueling a problematic trend for businesses: A surge in payment chargebacks.

Although the data is from a US study by Chargebacks911, Australia has a thriving subscription economy with a diverse range of industries, including wellness, software, and consumer goods.

The study reveals that nearly half of consumers are unknowingly paying for subscriptions they had forgotten about. This frustration is so widespread that 85 per cent of cardholders who sign up for a free trial would prefer their bank to automatically cancel the subscription on their behalf.

The click-to-cancel policy proposed by the US Federal Trade Commission (FTC), which is now on hold due to procedural issues, has already taken action against companies, highlighted by a $14 million settlement with the dating application Match Group for deceptive billing and cancellation practices.

In Australia, the Australian Competition and Consumer Commission (ACCC) has alleged that customers of JustAnswer LLC, a third-party platform, were not adequately informed of the ongoing subscription fee and suffered financial harm as a result.

“The ACCC commenced this investigation after receiving large numbers of complaints from consumers who claimed they were not aware of the ongoing subscription charges or who thought they were dealing with an Australian government body,” said Catriona Lowe, deputy chair of ACCC.

Ben Bridwell, president of Chargebacks911, explains the modern consumer’s mindset: “If cancelling a subscription isn’t as easy as it was to sign up, people won’t even try. They will just hit ‘dispute’ in their banking app. 

“That choice might be convenient for the customer, but it hits merchants with unnecessary chargebacks and fees that are far more painful than cancelling a subscription or issuing a refund.”

The underlying issues involve the high stakes in it. The index also shows that almost half of cardholders will abandon the merchant entirely to work directly with their bank if a post-transaction issue arises, which can result in chargeback fees, network penalties, and potential reputational harm.

Birdwell said merchants should improve their clarity on subscription terms, billing schedule and renewal dates. This proactive approach could build customers’ trust and loyalty rather than risking a deeper entanglement in disputes. 

He adds that in this way, businesses not only improve customer experience but also protect their businesses through subscribers’ feedback on why they are leaving. 

“Armed with that insight, merchants can tailor retention strategies, such as offering alternative plans, discounts, or temporary pauses, that may ultimately keep the customer engaged.”