How free trials work, from psychology to subscriptions to scams


I have become embarrassingly susceptible to Instagram ads, and the other day, I got sucked into yet another one, this time for makeup. After filling out a questionnaire about my skin type and tone and care routine, I landed at the deal: a “try before you buy” offer for “woke up like this” foundation, shade No. 35.

The company said it would send me the nearly $50 product for free, except for $5 for shipping and handling. If I didn’t like it, I could return it within 14 days to avoid being charged. At checkout, it also offered an “auto-replenish” option for me to have a new bottle shipped every few months. The language made it seem like it would be easy enough to return the makeup or cancel the subscription when the time came.

However, over on the Better Business Bureau’s website, customer reviews and complaints told me that might not be the case. Dozens upon dozens of people detailed stories of the company making unauthorized charges to their credit cards, describing their struggles to make returns and cancellations.

That’s how they get you.

Free trials are an enticing marketing tactic intended to reel people in by offering them what is supposed to be a risk-free, minimal-cost introduction to a product or service. And they are everywhere: You can find free trials for underwear, diet pills, makeup, mattresses, razors, CBD oil, gyms, dating apps, educational products, music … the list goes on and on. Who among us hasn’t signed up for a trial of a streaming service or fitness app or beauty product or membership of some sort — and perhaps quit before we were charged.

In an ideal world, if you like the product or service, you start paying, and if not, you walk away, no harm, no foul. And sometimes, that’s how it works. Other times, free trials end up being quite costly — people sign up for subscriptions unwittingly, get sucked into schemes that make it hard to cancel, or get hit with charges mentioned in the fine print. Those types of situations may not always be illegal or a scam, per se (though often they are), but they are, at the very least, kind of gross.

I didn’t get that foundation, but if I had, I’d almost surely have wound up paying for it whether I liked it or not, if only because I probably wouldn’t have gone through the hassle of figuring out how to return it. And if I had to guess, I bet the company knows that.

That’s the thing: Nothing is ever really free. There’s always a catch. And marketers know just how irresistible a deal can be — to the point where people sometimes walk right into a trap.

Why we keep getting sucked in by the idea of something for nothing

People like free things, sometimes to the point of irrationality. Dan Ariely, a behavioral economist at Duke University, has done extensive research and writing on consumer decision-making, including the allure of “free.” He’s found that people tend to overvalue free things and feel inclined toward them even when it’s not economically logical or when the opportunity cost is high.

It’s easy to observe. People will wait outside of a Dunkin’ store for hours on National Donut Day for a free pastry that they could get from the coffee cart guy around the corner for a dollar or two without a wait, or even line up to get tattoos — a pretty permanent decision — just because they’re free. “People appear to act as if zero pricing of a good not only decreases its cost but also adds to its benefits,” Ariely wrote in one paper.

Free trials are a way for marketers to tap into that. They know that when consumers hear the word “free,” their ears perk up.

Ayelet Fishbach, a professor of behavioral science and marketing at the University of Chicago, told me that free trials are effective for multiple reasons. “One is that once you do something, once you use a product or service, you build commitment to keep using it so that the trial period allows you to develop this personal commitment to using a product or service,” she explains. “Another is that it changes your defaults. If I give you something now, the decision is not whether to get it, it’s whether to return it. Or, if it’s a service, the decision is not whether to start but whether to stop.”

When you sign up for a free trial on Hulu, for example, the streaming service hopes you get hooked on watching the old seasons of Golden Girls, and that after your 30-day trial is over, you won’t want to give it up. Or that it will just become part of your monthly payment mix. Free trials, when they work right, can be a pretty decent way to try out products or services.

“The consumer gets to see whether they want to build commitment to something, and the company gets the benefit of changing the decision from do you want to buy to do you want to cancel,” Fishbach said.

To be sure, for companies, a free-trial customer is not always the perfect customer. Plenty of people sign up for offers and quit before they’re ever charged. One woman described to me how she used multiple different meal-kit promotions ahead of her wedding to see if she could lower her spending — she signed up and canceled week by week. “I was freakishly determined to see if I could really pull it off,” she told me.

Research has found that free-trial customers are often hard to retain and that they’re generally less valuable to companies than regular customers. But they’re also more responsive to marketing, meaning they may be gettable again.

Free trials flip the switch from choosing to buy to remembering to quit

Free trials are a seductive species of what the FTC classifies as “negative options,” where companies interpret a customer’s lack of action on an agreement as consent to keep being billed for a product or service. Basically, if you don’t actively cancel your subscription, the company assumes you want to keep going.

Negative options aren’t always a bad thing. I’m fine not having to actively decide I want to keep my internet service every month, for example. But they can be dangerous, and with the explosion of internet marketing, they’re all over, even for products and services that don’t entirely make sense. I don’t really need a subscription to have new makeup sent to me every month, or, say, bras from Rihanna.

“People can wind up paying for services or goods that they don’t really need,” said Brad Winter, an attorney in the Federal Trade Commission’s Bureau of Consumer Protection. They might not even realize they’re being charged.

Winter walked me through some of the common (and often dishonest) tactics companies and marketers use to get people on the hook with free trials. Sometimes, it’s not obvious to the customer which company is actually offering the trial — consumers are on the website of Company A and see a pop-up offer from Company B but don’t realize it’s from a different entity. Or customers put in credit card information to pay for shipping, and then they wind up being charged for a subscription or other products and services. Maybe it’s in the fine print, but people miss it.

Some websites will use pre-checked boxes so that unless people uncheck them, they get signed up for things. It’s apparently a tactic Donald Trump’s campaign was using during the 2020 election to get people to make recurring donations they didn’t intend to make. Online marketers use “dark patterns” to lure consumers — design tricks that nudge customers in certain directions and to make certain decisions, like when the sign-up button is a lot bigger than the opt-out one.

And a lot of the time with free trials and subscriptions, companies just make it really hard to cancel. So they keep charging consumers because they can’t quit, sometimes even sending them to debt collectors.

The Restore Online Shoppers Confidence Act (ROSCA) of 2010 was meant to curtail some aggressive online sales and marketing tactics, such as making it illegal for merchants to pass billing information to third-party sellers and requiring sellers to make clear disclosures about what people are signing up for and how to quit. Still, companies find ways to break the rules or get around them in order to bait people into their services.

In 2019, the FTC sued Match Group, which runs online dating platforms such as Tinder, OkCupid, and Match.com, for tricking consumers. Among other items, it alleged Match.com guaranteed some customers a free six-month subscription renewal if they didn’t “meet someone special,” but the company didn’t adequately disclose the hoops customers would have to jump through to take advantage of that guarantee. Romance-seekers had to submit a photo and have it approved by the dating app within seven days of buying the guarantee and contact at least five potential partners each month of the subscription. When that initial six-month period was ending, users were asked if they met “anyone” during that time frame, and if they answered yes, they were disqualified from the free renewal — the app took “anyone” to mean “someone special,” which anyone who has ever been on any dates knows is not true. The FTC also alleged that Match.com misled users with a “confusing and cumbersome” cancellation process that led people to think they’d canceled their subscriptions when they hadn’t. In its response to the lawsuit at the time, Match said the terms of its guarantee, which had been discontinued, were clearly disclosed and that most of its subscribers were able to cancel successfully.

In 2020, the FTC reached a $10 million settlement with ABCmouse, a digital learning program for kids, after alleging that it didn’t adequately explain to parents that they would be automatically charged after their free trials ended and that it put customers through what Winter described as a “maze” to cancel. That same year, the FTC reached a settlement with a company called AH Media that allegedly tricked consumers out of $75 million with free trial offers for cosmetics and dietary supplements. It duped people into believing they were signing up to pay just a small shipping and handling fee, but they would wind up with a $90 charge for the product and enrolled in subscription plans. The FTC also alleged the company’s owners used a network of shell companies and straw owners to process payments.

“It’s a cat-and-mouse game with some of the fraudsters who create shell companies,” Winter said.

A lot of us have found ourselves in subscriptions we can’t get out of, that we maybe didn’t realize we signed up for, or that we just forgot. Steve Davis, a semi-retired township assessor from Illinois, told me about an offer he got fooled into years ago: He bought a $5 pair of Green Bay Packers-themed garden gloves off of Facebook and clicked the box to get an extra pair — that he didn’t see also signed him up for a $25 subscription to the marketer’s “club.” He noticed $75 of credit card charges a couple of months later, when it was too late to get the money back.

“It wasn’t exactly that they didn’t tell you, but they tell you in such a hidden way that you didn’t truly realize what they were doing,” he said. He filed a complaint with the Illinois attorney general, but the company never responded. “Whatever money I’d given them was just spent with them.”

Scams, scams, scams

The internet and social media have made it easier to scam people in all sorts of ways, including with free trials. Indeed, the Better Business Bureau (BBB) says that such schemes are on the rise: From 2017 to 2019, consumers filed more than 58,400 complaints and reports about free trials to the BBB in the US and Canada. Unsuspecting shoppers have lost nearly $1.4 billion on such offers, with a median loss of $140 per victim.

The BBB’s tracking of free trial scams, which The Goods reported on in 2018, looks at who consumers say they’re getting duped by and how. Nearly two-thirds of its complaints come from women, and people in their 30s are the ones that complain most.

Free trial fraudsters use a ton of deceptive tactics to try to trap people in their webs. They copy the websites of major media outlets, such as CNN and People, that include fake news stories about products like weight loss pills and anti-aging creams. Often, they make false claims about celebrity endorsements — the BBB has received complaints about free trials attached to Leonardo DiCaprio, Angelina Jolie, Matthew McConaughey, Sarah Palin, Oprah Winfrey, Chrissy Teigen, Melania Trump, and Gwen Stefani, all without their knowledge or consent. The famous names involved change with popular culture — the BBB says scams have started to show up using Dr. Anthony Fauci.

Some celebrities have taken notice of the con. Tom Hanks, for example, called out a hoax claiming he was backing a CBD company. Ellen DeGeneres and Sandra Bullock sued pop-up websites over using their names in ads, many of which were for free trials.

Part of the problem with combating these types of rackets is that it’s hard to keep track of who the perpetrators are. It’s difficult to untangle the network of marketers, payment processors, and fulfillment centers involved. “It’s all in layers, there’s no accountability, and they routinely deny that they are tied to one another,” said BBB national spokesperson Katherine Hutt.

Scammers have a lot of tactics to avoid detection. Sometimes, by the time a consumer complains, the website they were buying from is already gone. “The names of the products change constantly, the websites change constantly, so it’s like playing a game of whack-a-mole,” Hutt said. But the charges often keep coming.

The products, too, can be questionable. Generally, the diet pills and herbal supplements and male enhancement pills being marketed aren’t FDA-approved. “For a lot of these products, there’s no real backing to their claims of what they say the products are going to do,” Hutt said. “Consumers really don’t know what they’re buying.”

Free trials can be great — as long as you are careful

Free trials are effective tactics for respectful companies that want to sell their products to interested customers, but they’re also effective tactics for scammers. So how can you tell which is which?

The FTC has a series of recommendations for how to approach free trials. Before signing on, consumers should look up whether the company they’re dealing with has reviews or complaints about it, or people online are complaining it’s a scam. If there’s a catch, someone else has probably already been caught. The method isn’t foolproof, since a lot of fraudsters constantly change names, but it helps.

It’s also important to read the fine print and the terms and conditions — which, while a little time-consuming, is often where the metaphorical bodies are buried — and to watch for pre-checked boxes that give the company the green light to keep charging once the trial ends. Before signing up, it might be a good idea to figure out ahead of time how to cancel.

People should keep an eye on their credit and debit card statements and take a gander at what’s being charged. Sometimes, consumers can go for months or even years on a subscription after unwittingly getting signed up during a free trial. Lorena Cupcake, a freelance writer based in Chicago and something of a free trial connoisseur, recently signed up for and immediately canceled a trial for an online food delivery service. Soon after, they noticed a $9.99 charge on their PayPal account, which they successfully got refunded. “They might have warned me about the charge somewhere in fine print, but reeling people in with two ‘free’ weeks that are actually paid, or charging them for canceling, is not normal business practice,” they told me.

If you do intend to quit, or if you think it’s at least a possibility, put the date your calendar — research shows consumers overestimate their ability to remember to cancel free trials. “The moment of zeal, when you buy, is also the time to remember the corresponding responsibility to mark your calendar,” Winter said.

Probably the most important piece of advice is to keep in mind that companies aren’t offering you something free to be nice. “A free trial is not ultimately free — somebody has to pay for it,” Winter said. “And the question is, who’s paying for it and why?”





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