Compliance, cancellations, and the customer experience
An exceptional customer journey extends far beyond the initial point of sale. And nowhere is this truer than for subscription-based businesses, whose continued success is based on delivering consistently seamless, high-quality experiences throughout each customer's time as a subscriber - from the initial sign-up through to the point where they decide to terminate their subscription for whatever reason.
Indeed, these new models have transformed the way many businesses interact with their customers, applying lessons learned from established subscription-based services, such as gyms and streaming services. From both traditional retailers and ecommerce specialists offering scheduled deliveries of household essentials, groceries, and entertainment products, to the now-ubiquitous software-as-a-service model and premium subscriber options on popular social media platforms, there are numerous channels for forward-thinking businesses to establish 'sticky' streams of income, with more still to reveal themselves.
However, the rules around offering and managing subscriptions and memberships of any sort are about to change, particularly with regards to cancellations…
Throughout 2026, the Competition and Markets Authority (CMA)'s regulations around buyer protection and autorenewals are going to evolve, as part of the existing Digital Markets, Competition and Consumers Act 2024 (DMCC Act), in order to help consumers avoid getting trapped in unwanted subscriptions. Organisations found to be in violation of these new regulations can expect to face fines of as much as 10% of their annual revenue.
As a result, any retailer that offers subscriptions or memberships of any kind must be aware of how these changes will impact them in the months ahead and, adapt their systems and processes to ensure they remain fully compliant with all applicable regulations, and - most importantly - ensure that they are still able to offer a world-class experience for their subscribers.
So, what's about to change and how can we best prepare?
- Specific pre-contract information must be provided. The DMCC Act distinguishes between key pre-contract information and full pre-contract information. Both must be provided in full at the initiation of the contract, or the customer will not be bound by the stated terms. Compulsory elements include:
- Full details of payments, include frequency and amounts.
- Minimum total liability.
- Schedule of reminder notices.
- Full cancellation rights.
- Reminder notices will be compulsory. It is no longer enough to assume a customer will automatically want to renew their subscription. Reminder notices must be sent in advance of the renewal date.
- Cooling-off periods will also be compulsory. This applies to both new subscriptions and renewals. Customers must have 14-day window to cancel their subscriptions without penalty.
- Cancellations must be as simple as possible. Cancellation instructions must be provided, and the process must not include any unnecessary steps. This also applies to online subscriptions. Confirmation must be provided within 24 hours.
There's certainly a lot to consider here, but rather than treating these changes as onerous compliance obligations, why don't we treat them as an opportunity to reconsider the overall subscriber journey, and look for new opportunities to enhance it?
Traditionally, when a customer wishes to cancel a subscription or membership, they've done so by speaking to an agent, who will then have the opportunity to discuss their reasons for cancelling and potentially offer some perks to change their mind. In light of the changes mandated by the new DMCC, this is unlikely to be practical in the majority of cases, when customers are able to unsubscribe with a single click. This has the potential to create a serious loss leader for subscription-based businesses whose customer engagement strategy is based on an initial discount or free gift (e.g. the first month's delivery is free, after which the subscriber pays the usual rate), as there is nothing to stop customers hitting 'unsubscribe' right before their first payment is due.
However, with agentic AI and intelligent automation currently transforming both the contact centre environment and the wider customer journey, numerous opportunities have presented themselves to ensure full compliance can seamlessly co-exist with personalised experiences that maximise long-term retention and build brand loyalty.
For example, if someone is looking to cancel via a page on your website and you have already implemented a chatbot function that they use to request a cancellation, the bot can automatically engage a real customer service agent, who can discuss the reasons for their cancellation, provide any hands-on support they need, and (ideally!) offer any perks or resolutions that will entice them to stay.
If your contact centre environment and chatbot functions have been intelligently integrated (as they should be!), these interactions can then be utilised to drive further optimisations, such as ensuring cancellation requests are routed to agents who have the best records of retaining customers, or ensuring agents don't invest their time and effort on accounts that have no realistic chance to renewing their subscriptions. For example, AI-based analytics can identify trends in customer data, such as individual addresses that have signed up for multiple trials but never made a purchase, which will allow agents to focus their attention where it will prove most effective.
And of course, the best approach to minimising cancellations is ensuring customers never want to cancel to begin with! All the data gather through customer interactions - whether it's with an agent or chatbot - can help build up more accurate, comprehensive customer personas that support highly personalised offers, helping to maximise the number of subscription renewals.
Above all, while regulations evolve and customer expectations naturally shift, the value of a personalised experience, delivered by an attentive, knowledgeable professional is a constant for the Retail sector. If we keep this in mind while making full use of the possibilities AI-powered automation offers us, the opportunities will be tremendous.
If you'd like to take a deep dive into your own customer journey and identify where the intelligent application of new technologies could make that all-important difference, just get in touch.
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