Have you ever seen a business offer a free trial or introductory offer followed by a monthly subscription if you don’t cancel before the trial is over? This is what Visa refers to as negative option billing. In other words, negative option is a billing practice in which merchants offer a free trial, require a credit card to claim the trial, and then bill the customer for a monthly subscription if they didn’t proactively cancel before the trial ended. Visa has had rules regarding these types of sales since 2011, but they are now enhancing the rules based on trends.
With these enhancements, Visa is trying to address pain points around cardholder complaints and confusion. These often revolve around tracking and monitoring difficulties as well as lack of clarity on dispute rights.
The enhancements will apply equally to merchants if a free or introductory offer is followed by an ongoing subscription or recurring agreement, regardless on whether they are selling either physical or digital goods and services.
Here are some of the high-level requirements of the enhanced program for negative option billing:
These new rules for negative option billing will go into effect on April 18, 2020, and Visa will be conducting proactive monitoring and mystery shopping for enforcement activities. If you have any questions about how this may affect you or your business, please contact us.