Ask HN: Should I remind users that their card is about to be charged?

[grinnick]

I have a SaaS app with a 14 day free trial. I take CC details as part of the signup process so I have card details for users who are in the trial recorded in Stripe.

Currently, if a user doesn't unsubscribe during the trial then they are automatically charged for their first month once their trial has ended.

Is it proper etiquette to warn them about this or should I just charge them and say nothing? Should I be sending them an email which says something along the lines of "Hope you enjoyed your trial. You card will be charged tomorrow."?

Edit: Just to stimulate the discussion a little bit more because it seems like the responses are one sided...

The reason I'm asking is because Optimizely recently charged my card for €168.00 after a free trial ended on me. No warning was issued. We all know how much money they make so perhaps this works out ok for them?

For completeness, they refunded immediately once I challenged the charge.

[dangrossman]

I send the reminder on day 7 of 14. I've tried other schedules, but settled on 7 days as the last automatic mail. By that point in time, everyone's fallen into one of three groups:

1) Those that signed up, set up their accounts and are already getting value out of the service. They don't need the reminder, sending it is just good-will with this group.

2) Those that signed up, decided it wasn't right for them for whatever reason within the first 10 minutes, but didn't take the time to cancel. When they get the reminder and remember they're going to be charged, they cancel at this point. You've avoided the "I forgot to cancel and can't believe you charged me" problems here.

3) Those that signed up, then decided to put off actually using the account they created until later, but do intend to use it. You've reminded them to get to it sooner than later, and they still have a week to try out the service before paying for it.

And always refund customers who cancel right after the first bill. Whether you have the legal right to bill them or not is irrelevant, it's not worth the ill will. Happy ex-customers can become happy customers again in the future.

[lucaspiller]

> And always refund customers who cancel right after the first bill

This. I signed up for an Amazon Prime trial, and forgot to cancel it (even though I'd setup a calendar reminder I missed). I remembered a week later, and was a bit unhappy that I'd been charged. I logged in to cancel it so I wouldn't be billed again the next year, and Amazon said as I hadn't used the service since they billed me they would provide a full refund.

[jlees]

You could segment users based off activity, for example sending:

1) a goodwill email, an up-sell to a longer-term plan or extra features, etc;

2) automatically cancel these folks, and send an email to that effect: "We notice you're not using X, so we won't be charging you at the end of your trial." They will just cause a cancellation anyway, though you will lose some of the 'free money' from lazy or unaware users.

3) Don't bill, but you could automatically extend the trial since they haven't used it, and you'll get more value from people converting to group 1) than 2). Perhaps the free trial starts when they've actually done some impactful action other than create the account.

There's way more segmenting you could do based on the types of users you see, which ones are most enjoying the service, and so on. Just seems odd these days to say "I'll email everyone" on a fixed rule.

[codegeek]

Please inform the user. It is called "being nice" even though you probably are not legally bound to. In fact, you could very well be within your terms to charge them because that's what free trials are for right ? If I was that user and you sent me the email, I will do these things:

  1. Be really happy that you informed me. 

  2. Cancel my subscription if i really don't need your service. Renew it *happily* if I want your service.

But the most important thing that will happen is that I will remember you/your company that you employ good practice. If it comes down to choosing b/w you and someone else and the difference is marginal, guess who will I choose ? If a friend asks me for a service similar to yours, guess who will I recommend ? Happy customers (even ex-customer) can help you in many ways even if they are not paying you.

Now, let's look at the other side of it. If you do not email me, you will make some money from me in the short term. But I will ensure that I remember you for the wrong reasons. I will also ensure that if someone asks me about you, I will tell them to stay away. Heck, if I really took it personally, I will even write a hate blog and submit it on HN. Imagine the PR issues you could potentially have.

So be nice and it always comes back to help you. Even if you are not making money from a user in the short term, who knows that user might be able to help you indirectly in securing a lot more users who will pay. May be.

[bdunn]

When I collected cards upfront for Planscope, I sent out an email 3 days before their 14 day trial ended. The next email they'd get would be an invoice email when their trial expired, and they'd continue to get these emails each month when they were billed.

When Gmail rolled out tabs, I started getting a lot of people who were unexpectedly billed. My "trial expired emails" were usually lumped into the Promotions tab, which doesn't have as much urgency attached, and thus there was definitely a spike in cancelations after that first invoice (people always see those invoice emails; they sometimes miss the "trial expiring and your card will be billed" emails :-)

When you take cards upfront:

* You'll get much higher trial to paid conversion rates. Mine was about 45%

* You'll get a lot of cancellations after that first bill goes through. If you calculate churn based off of "paid accounts who cancel", it will be artificially inflated. Try tracking it against customers who have paid you at least 2x.

* If you want to make your life a bit easier, automatically refund people who cancel within a given window after their first bill.

* Please don't bill people without sending them an email invoice. It's just wrong.

* Don't stake your business on one-off customers. If someone wants their money back, give it back (within reason, obviously. I'll by default refund the last month.) I've had people come back when they really needed Planscope, refer others, etc. And plus, chargebacks are messy.

I'm no longer collecting cards upfront, and I've finally got MRR growth back on track. I made the mistake of simply changing the signup form / billing code without making heavy modifications to the marketing site and onboarding flow, which caused a huge drop in growth after that change.

[dangrossman]

> I'm no longer collecting cards upfront, and I've finally got MRR growth back on track. I made the mistake of simply changing the signup form / billing code without making heavy modifications to the marketing site and onboarding flow, which caused a huge drop in growth after that change.

That'd be a great topic for a blog post. I don't know how to make that switch myself; I tried once and it wasn't a success.

[andrewingram]

Interesting example I stumbled across:

Match.com typically take your subscription fee every 6 months, they won't remind you before they take the money. They also won't let you unsubscribe immediately after they take the money, they claim that payment is still in progress, even though the money has already been taken. It's not until a few days later that you can unsubscribe. Essentially it seems that they've realised that the most likely time for someone to unsubscribe is immediately after they pay, because with 6 months of membership it's easy to forget that you've even got a subscription unless you're a very active user.

I consider this to be a dark pattern because it plays on people's forgetfulness.

My Rules:

- Give people enough warning before taking payment that they can reasonably be able to decline the transaction. The only real reason someone should miss this warning is if they're taking a long vacation.

- Don't do evil stuff after taking payment to prevent them from unsubscribing from the next payment

- Have a nice buyers remorse window, allowing a user to reverse the transaction that's already occurred.

[imgabe]

I've used match. If you call them they can refund the payment if it's right after the renewal. It's even an automated option on their phone menu. Granted, you have to go through the trouble of calling them, but it's not that hard to get your money back if you forget to cancel.

[greenyoda]

I'd much prefer if you would not take my credit card number at all until I confirm that I want to convert from a free trial to a paying customer. I very rarely sign up for free services that require handing over payment information up front. After all, if you're legitimately offering a free trial, there's no reason you'd actually need my credit card number. If I lose interest in your free service after a few days, I don't want the hassle of having to remember to cancel to avoid a charge. I don't want to have to worry about being charged before the free trial is over (I've never heard of your company, so I don't know if you're honest). It just adds too much useless stress to the process. If I keep my credit card in my pocket, I know I'm in control.

Also, I think that the observation that you get much higher conversion rates from people who provide credit card info up front is debatable. It suffers from survivor bias: you might get a lot more paying customers from the group of potential customers who refused to sign up for your trial because you asked for payment info up front. That could be pushing away 95% of all your potential customers, but you'd never know it.

[MarkTee]

> After all, if you're legitimately offering a free trial, there's no reason you'd actually need my credit card number.

One possible justification: Asking for credit card info can act as a means of verification, preventing people from repeatedly creating new accounts to obtain a virtually limitless trial.

[martswite]

I've never understood why any service should need my card details if I'm signing up for a free trial. I now don't sign up to free trials that require payment details up front because, often, there isn't any warning before the trial period ends and a large charge can then get taken.

If I like your service and it's useful to me after the free trial ends I'll sign up and add my payment details.

I'm probably just cynical before my time but I see it as preying on people who are forgetful, to take their money.

In answer to your question though. I'd send a reminder it's polite.

[binarymax]

Warn them and give them a link to unsubscribe easily, but don't miss out on the opportunity to collect a single data point on why they are unsubscribing (checkboxes or buttons for 'Didnt use it', 'Didnt find it useful', 'Too expensive', 'Buggy', etc...)

[DrJokepu]

This is super simple. If you're ok with taking people's money who wouldn't pay for your service otherwise, go ahead and don't send a reminder. If you prefer to only take money from customers who are satisfied enough with your service to pay for it, send a reminder. Only you can decide which type of business you want to run.

[thenduks]

The CC-required-for-trial thing is a form of 'negative option billing' and, IMO, it would be best not to do it. Many companies have stopped (a high profile example: 37signals no longer requires credit cards to signup for Basecamp).

Braintree has a good article on it [1]. In that article are some recommendations for when you must do negative option billing - one of which is to send them a warning 5 days before billing.

[1]: https://www.braintreepayments.com/blog/negative-option

[k2enemy]

As many others have mentioned, the "right" thing to do is warn them. Also, if you don't warn them, you are starting to get into "negative option" territory, and you need to be careful about how you disclose this to your customers: http://www.responsemagazine.com/direct-response-marketing/le...

[japhyr]

If a small percentage of your users end up feeling tricked into having their card charged, it's going to be bad PR. It seems much better to lose some conversions, but keep your integrity.

If it motivates you at all, anyone who cancels after receiving this notification was not likely to be a long-term customer anyway. So all you will be losing is a month's paid service from the people who don't really want to pay for your service. That's not good money to try and hold onto.

I prefer the suggestion by another person that recommends simply disabling the free trial until the person chooses to have their card charged the first time. That seems the most honest way.

[denizozger]

Let your users know because:

1) Optimizely's bad process is an opportunity for you to have something better. "All our competitors trick you so that's usual and don't be mad at us" kind of attitude is quite mediocre. 2) Showing that you care about customers would improve brand loyalty thus keep users and would benefit you in the long run, than a couple of tricky financial profits 3) It's the nicer thing to do and you'd keep your integrity.

[gr2020]

My app has a 7-day trial, and requires a credit card up front. I try not to beat people over the head with a note about an upcoming charge - what I do is, 3 days before the trial ends, I send an email asking how the trial is going, and if they have any questions I can answer.

It serves as a subtle reminder that the trial is about to end, while offering to help at the same time.

[bhartzer]

Sending them a reminder seems fair. And as dangrossman suggests, sending it on the 7th day is logical. But I would go one step further: take the time to ask the user if they're liking the service and if they have any feedback. I would also remind them in that email that their credit card is going to be charged.

[robhu]

I agree with the other comments that it would be 'nice' to warn them (and give them a 1 click unsubscribe)... but most companies (in the UK) allow you to sign up to free trials online but to unsubscribe you have to call them.

I presume this is because by making the barrier to unsubscribe higher you get fewer people unsubscribe, and probably some people who don't use a service but remain subscribed because they don't notice.

It's also common to require x (where x is 28?) advance notification for unsubscribing, so even when you do so you usually end up paying for another month anyway.

Some services (e.g. The Times Online) give you a free (or reduced price) trial, after which you agree to a 12 / 18 month subscription. This seems even more evil, but I guess they do it because it 'works' and they're about making money rather than being nice.

[jlees]

I really dislike services which make you call to cancel. There are some in the US, too.

The OP could use the Times model to try and convert folks to a longer-term, discounted plan if they are enjoying their trial. But too much upsell and your conversions will drop.

[krapp]

>Might be a good way to keep some customers that might have canceled.

Pretty much by definition, if they weren't aware they were going to be charged and would have canceled had they known, they're not 'customers.'

[rs]

You should send a reminder, even if it's just a few days before you take the charge. It's not just a Good Thing To Do, but it will even reduce the risk of charge-backs.

As your business grows and you take on more payments, you will find there are a small group of your customers who will look at their credit card bill at the end of the month (or months) and just call up the credit card company to charge back items that they don't recognise (due to them not recognising the charge (innocent mistake) or they genuinely didn't use your service and feel "cheated")

On a side note, why do you take CC info at signup ? I've done about 4 SaaS currently live, and not a single one takes CC information upfront, but rather send them a reminder to pay an invoice as their trial reaches it's end.

[mattmaroon]

My advice: send the notification. It sets the tone of your relationship between yourself and your user. You send that notification (which most companies do not) and you're sending the message that you want to engage in a mutually beneficial relationship with your customers rather than just make a quick dollar.

Yes, you'll make less this way in the short term. Automatically charging but offering a refund if someone is upset will convert more, and automatically charging with no refunds will convert more than that.

But I suspect that if you look five years down the line, setting a good tone between yourself and your users will pay the most. Those who decide not to subscribe immediately are still potential future customers, and know other potential future customers.

[johnmurch]

I would recommend a reminder email as more of a curtsy. In terms of tracking/updating CC when they expire or have issues, checkout http://churnbuster.io/ as a way to help with Churn.

[lauradhamilton]

Definitely warn them. And make it very easy to cancel (e.g., 1 click).