
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.<p>Currently, if a user doesn&#x27;t unsubscribe during the trial then they are automatically charged for their first month once their trial has ended.<p>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 &quot;Hope you enjoyed your trial. You card will be charged tomorrow.&quot;?<p>Edit: Just to stimulate the discussion a little bit more because it seems like the responses are one sided...<p>The reason I&#x27;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?<p>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.

~~~
sophacles
And as a result of this - I am reading another "good guy Amazon" story on the
net. This reinforces my concept that Amazon is reasonable to deal with, and
I'll be more likely to buy from them, other things being equal.

Similarly this is why I have a preference for Square and Stripe over other
similar services, my local $preferred_brand car dealership (over other local
ones) and so on with other reasonable to deal with companies. At the end of
the day, I'm willing to pay even a bit more if the hassle is lower, or
expected to be lower should I need something 'weird' (defined as: not just
purchase and walk away forever).

Generating a little bit of good feeling towards your business is totally worth
some overhead cost.

~~~
jnardiello
Regarding Amazon, i've been working with them closely on the marketplace for
about 2yrs and i can say they are evil geniuses.

Their policy is: \- They know were flaws are (packaging, products, marketplace
partnerships, deliveries, etc..) but still make nothing to fix them. They
rather estimate that a certain amount of customers will complain and will just
refund them with no questions, so everyone is happy. \- During this process,
flaws expenses and drawbacks are thrown on third party partners so that
financially they keep up. \- The result is that they look like the "wow" guys,
partners take full responsibility. \- The more they become a monopoly, the
more they can play this game.

Quite horrible, honestly.

~~~
sokoloff
There is no way to ship $71 Billion of product and get every product and every
shipment perfect every time.

I don't think it's fair to say that they're doing nothing to fix them. I
regularly get product and packaging surveys, and I've seen products be pulled
and descriptions updated based on content in reviews or based on feedback from
customer care. I've returned a product for not meeting the description, and
within 15 minutes of me getting the email saying they'd received the product,
credited my card the full amount, I went to the site and the product was un-
orderable. Several days later, the description was corrected and the product
was again orderable. That violates the "[they] still make nothing to fix them"
claim I think.

I think you're ascribing a mercenary "screw it, it's cheaper to not fix"
mentality when an alternative and more likely (IMO) possibility is "look, we
can't fix everything, so when we fail our customers, we need to be very good
at making it right".

~~~
jnardiello
> _There is no way to ship $71 Billion of product and get every product and
> every shipment perfect every time._

Yes, exactly. But they don't explain it to the customer. They ship right-away
another packet. Why? Because what they are actually doing is either saying to
the courier "You failed to deliver in our crazy-efficient time table, we won't
pay you" or to the third party seller "You failed to meet our standards, we
have sent a replacement but you'll cover all expenses".

> _I 've returned a product for not meeting the description, and within 15
> minutes of me getting the email saying they'd received the product, credited
> my card the full amount_

Again, as above. They usually do this with marketplace products. What they did
behind the courtains is saying to the seller "The product didn't meet customer
expectations. We refunded it, you will pay all related expenses".

> _everal days later, the description was corrected and the product was again
> orderable. That violates the "[they] still make nothing to fix them" claim I
> think._ This was probably the third party seller who fixed the description
> to avoid paying again.

Note: At this point you say "Wow, they are just pushing sellers for quality"
WRONG. Because customers are not always right :) Most of the times they are
dead wrong actually (or they are just abusing the fact that they know that
Amazon consider them always right). It is rotten ethic to just dump all
expenses on sellers without even giving them (most of the times) the chance to
reply or to take action.

> _I think you 're ascribing a mercenary "screw it, it's cheaper to not fix"
> mentality when an alternative and more likely (IMO) possibility is "look, we
> can't fix everything, so when we fail our customers, we need to be very good
> at making it right"._ No, i'm saying that they place crazy efficiency
> requirements and while they understand - as you said - that shit _might_
> happen, all they do is dumping all costs of their policy on partners. And
> partners can't do literally _nothing_. Why? Because Amazon pays out every 2
> weeks, they will just keep the money from your wired amount. Because if you
> don't comply they just ban. And if they are the _only_ marketplace, you are
> shut down.

This isn't even considering the amount of stress and pressure that this 0
tolerance policy is causing on their own employees and connected partners
employees.

~~~
sokoloff
As a customer, I don't want an explanation of "we ship $71B a year and
sometimes shit happens". I want the stuff I ordered. If it came broken, I
already know that things break in shipping; I'm holding one in my hand right
now; an explanation doesn't help me, but getting another shipped overnight
does help me.

Amazon is absolutely taking a customer-centric approach. Intentionally.

I gather that you're a 3rd party merchant and are frustrated about the losses
when bad things happen. What you're not seeing is that Amazon 3rd party sales
wouldn't happen nearly as much if Amazon gave great service but buying from a
3rd party was caveat emptor.

I've not noticed any difference in customer service policies for Amazon as
seller vs 3rd party as seller items. If I did, you can be damned sure that I
wouldn't shop from third-party sellers if doing so meant I had to use third-
party support policies. I already have that possibility-everywhere else on the
internet. I _choose_ to buy from Amazon, including 3rd party sellers, because
I know Amazon will get it right or make it right.

~~~
jnardiello
Yeah, having an extremely confusing interface that doesn't make completely
clear to average customer from whom you are actually buying (and who is
actually fulfilling your order) is part - IMHO - or a very poor ethic.

Anyway, your points as a customer are indeed valid and obvious. Still, the way
they reach such efficiency is absolutely unhealthy for the economy. On my
personal side, i will avoid like hell any professional relationship with
Amazon. Note: I didn't part for any of the reasons above and i don't have
anything personal against it. Mine are just general thoughts after gaining
some experience on their internal operations :)

------
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.

~~~
bdunn
Great idea.

I ALMOST went back to the safety of CCs upfront
([http://planscope.io/blog/why-im-going-back-to-capturing-
cred...](http://planscope.io/blog/why-im-going-back-to-capturing-credit-cards-
upfront/)) but ended up sticking with it. And I'm glad I did, because growth
is significantly higher and there are fewer cancelations.

The big takeaway: People do more research before plugging in their credit
card. If it's relatively low friction to sign up for a trial of your product,
you need to make sure your onboarding flow isn't just about _how_ to use your
product, but _why_ (e.g. the typical responsibility of your features / tour
pages.)

~~~
gacba
So wait--you said you almost went back to collecting CC's up front, and that
article says it was a better fit than the no-CC trial, so what data did you
collect to say otherwise?

You're arguing both sides Brennan. :) I'm confused as hell as to which worked
and why.

~~~
bdunn
Sorry, should have been more explicit: For most of Planscope's history, I
captured credit card upfront. Growth was decent, but I wanted to see what
would happen if I dropped that requirement. So I did, and growth plummeted
(very few signups were converting.) My gut reaction was "REVERT!" (which is
where that blog post stemmed from), but after talking with a few people I
figured that maybe it's not as simple as just changing how signing up works...
maybe I need to tweak a lot of other stuff. So I did, and now that it's been
in production for a few months growth has eclipsed the card upfront rate.

~~~
gacba
So what all did you tweak to make it work? If you'd prefer not to be public
about it, message me in the Academy (this is Dave Rodenbaugh)

------
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.

~~~
andrewingram
True, but I subscribe to the belief that if I sign up for something online I
should be able to cancel online.

------
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](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...](http://www.responsemagazine.com/direct-response-
marketing/legal-review-ftc-sets-new-standards-negative-option-disclosu-4553)

------
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.

------
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/](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).

------
lifeisstillgood
Imagine a situation where you took the card details, but they had to login
again after the free trial to keep on using it - re-approve the payment as it
were.

You would know then that those customers _really_ wanted your service.

After that it really is just a question of degrees about how far you are
prepared to go to make money off people's procrastination.

The fact you ask suggests this troubles you - so be as upfront and honest and
clean and clear as you can. And maybe cut back on the food bills...

------
alphaa
That's funny. I glanced at the headline and then started writing my comment
without reading your post. I started writing about how annoying I found it
when Optimizely started billing me after my free trial. Yes, I was using the
service, but I hadn't made my mind up about. It's just an opportunity to help
people trust you. Send them a reminder 24 hours before "we're going to charge
you"...especially for a year of service. Come on!

------
PinguTS
Take an example with Squarespace. No CC details just for the trial and if CC
details then just end the trial without going directly into the subscription
model.

~~~
martswite
This is something I'd love, great idea.

------
centdev
We have a similar setup. 15 day trial with cc as per of registration. We sent
a few emails in thos 15 days. 1st is the welcome. If they haven't logged in
more than once we send another email on day 7 to be sure see the value and if
they need help and about their trial. On day 14 we send a reminder about their
trial. Day 15 we charge. We will gladly refund the charge up before their 2nd
due date.

------
bliti
Have you tried offering other plans? Your service seems to be one that people
could use in the long term. Maybe 3, 6, and 12 month plans. Do like web hosts,
and offer a slight discount (over month-to-month plans) as an incentive. Also,
I think $29 is a bit too low for this kind of service. That's less than $360
dollars a year from a customer's marketing budget. Which is nothing.

------
linuxlizard
Yes, please!

Even with recurring annual charges (e.g., DropBox), I like getting
notification that I'm about to be charged. With new charges after a trial,
it's even nicer because it's a reminder that this thing is about to start
costing me money. Sometimes I sign up, try it, and then forgot about it
(usually something I need occasionally like proXPN).

------
rkalla
Don't spend the mental energy to try and figure out if you should be "sneaky"
or not -- don't be -- be open and honest, users will remember it, appreciate
it and if your product is valuable, your business will grow.

If being sneaky with reminder emails is _what_ makes your business successful,
then you are standing in quicksand.

------
Oculus
If you're a one man show, keep in mind that all those users sending you emails
about unwanted charges create a big customer support overhead. That's time
taken away from marketing or improving your product. Instead of wasting their
time and your's, just send them a heads up email.

------
al2o3cr
Yes, you probably should do this - surprise billing will get you angry
didn't-really-want-to-be customers and bad PR.

A nearly-zero-effort way to do this is to listen for the
customer.subscription.trial_will_end webhook from Stripe - they'll send it to
your app 3 days before the trial ends.

------
debacle
Would you want to be notified? I certainly would.

Linode sends out an invoice email every month, usually a day or so before I
see the charge show up. I have no reason to cancel, but I appreciate that they
do that.

------
lgas
I think the answer to these types of question is usually pretty easy if you
just put yourself in your users' shoes. What would you want the company to do
if you were the user. Do that.

------
guan
Does it matter how much the charge is? Personally I would appreciate a
reminder of a $100+ charge, but I don’t want 2 emails (reminder + receipt) for
every $5 recurring charge.

------
DominikR
Are you even allowed to store CC details of your customers on your servers?

I know that you are not forced to be PCI compliant by law, but if you are not
and your database is leaked, you will be liable for any damages that result
from that leak.

Anyways, I wouldn't ask for CC at signup because your business may come across
as untrustworthy or a scam when asking for such data when the user is not
buying anything at the moment.

Edit: Sorry my fault, somehow ignored the part of his message stating that he
is using Stripe.

~~~
nmcfarl
There are PCI compliant ways of storing this data, and even better there are
companies you can pay to do it for you (so you don't screw it up) while
providing a lot of other goodies at the same time. See: Braintree, and Stripe.

------
afhsfsfdsss88
I don't know a person alive that doesn't like having options. I would
appreciate just being asked.

------
onion2k
Warn them.

------
ctdonath
Happy customers bring you more money. Irritated customers go elsewhere.

------
etanazir
Disable the free trial service until they confirm purchase.

------
mknits
Yes, of course.

