“Try it for free!” the advertisement SCREAMS in bright bold letters. You’ve always been interested and a trial offer is the perfect opportunity to test out this great new product for free. But before you sign on the dotted line, be aware that accepting the offer may not be as simple or as ‘free’ as it appears. The pitfalls are found in the fine print that many of us overlook. The first sign that you’ve fallen for a slick sales tactic will be an unexpected charge that appears on your credit card bill. Before you get reeled in to the next hot deal, be aware of these common sales tactics used by merchants and retailers:
The goal of every business is to obtain new customers and build strong customer relationships. They work hard to address both, but the ultimate goal of every business is to earn more profits. If you’re aware of the details and agree to a promotion that is to your advantage, there’s nothing wrong with the slick sales tactics outlined below. The problem occurs when you don’t understand the fine print or the full scope of the offer. Click an “I agree” button without thoroughly reading the terms and conditions and you could be agreeing to a contract that you can’t afford.
Be Cautious With These Services:
- Automatic Payments – (i.e., gym memberships, website hosting, Netflix, etc.) A popular and convenient payment solution, this service is provided with many monthly and ongoing service plans. All-in-all, automatic payments are a great tool, but watch out for extra fees that can drastically drive up the cost. Sign up for too many automatic payments without being prepared and you could end up paying ridiculous late fees, or even worse – end up in a pile of credit card debt.
- Auto Renewals – (i.e., magazine subscriptions, health supplements, etc.) – Subscribe to a magazine and an auto-renewal may be attached without your knowledge. But even if you do know what you’re agreeing to, the problem is that many of us forget to cancel. After receiving a magazine over the course of a year or taking a daily supplement for several months, the payment that shows up on your credit card statement may be a reminder that comes too late. Some merchants won’t allow cancellation after a payment has been received.
- Free-to-Paid Services – Perhaps the most effective tactic for any business looking for new customers is to use the word ‘free’ in their advertising. But what comes attached to the free product or service may be automatic enrollment into a paid program, and cancellation will be difficult or impossible.
- Cost Creep – Another tactic to watch out for is referred to a ‘cost-creep.’ Barely noticeable at first, the monthly payment or service fee climbs in small increments each month to stay under the buyer’s radar.
If any of these services are to your advantage, signup / enroll. Be sure to keep strict watch over your credit card bill and examine each monthly statement for unexpected charges. Always be aware of the total amount that will be deducted from your account and be sure that sufficient funds are available. Annual or quarterly auto-renewals are particularly vulnerable to non-sufficient funds penalties.
How to Cancel
People often run into problems when cancelling auto renewal and auto payment plans. Depending on the agreement, you may have to notify your bank and the merchant in writing. If the service isn’t terminated, be persistent. If your request falls near the end of the billing cycle, you may need to wait another month for the request to be honored. If you continue having difficulty, call the merchant and demand a refund and threaten to contest the charge with the card-issuing bank, if the merchant refuses.
If you feel deceived, it’s understandable to be upset by what may be seen as a trick to get you to buy more. But most likely you failed to read the fine print and there is nothing illegal about these legitimate services that are helpful to many consumers.