Visa Will Make Introductory Trial Terms More Transparent

Visa is making it easier to cancel free or discounted trials before your debit or credit card gets hit with a recurring charge — useful if you frequently forget to set your own reminders about expiring promotions.

The payment network's new policy, which starts April 18, 2020, applies to offers on both physical and digital goods and services. Among other requirements, merchants offering free trials or introductory discounts that roll into a recurring agreement will have to provide you with a link to cancel your trial subscription at least a week before your Visa card is scheduled to be charged.

“During these unprecedented times, when a majority of people are sheltering in place and buying or trying more goods online, we believe this new policy will benefit consumers, as well as sellers and financial institutions,” said Mary Kay Bowman, head of global buyer and seller solutions for Visa.

» MORE: Used a credit card for free trials? These tools make canceling easier

What's changing

Under Visa's new policy, companies offering free trials that turn into recurring subscriptions will be required to follow new rules in their communications with cardholders. Among those requirements:

• At the time you sign up for a free trial, the merchant must send you a copy of the terms and conditions via email or text, regardless of whether any amount was due at the time of enrollment. The terms and conditions will include subscription details, the ongoing regular costs and schedule of payments, and a link to an online cancellation method.

• Merchants must provide a seamless way to cancel a subscription online, regardless of how you initially enrolled in the offer.

• Merchants must alert you by email or text — and provide a link to end your subscription — at least seven days before initiating a recurring transaction at the end of a trial period or introductory offer.

So when you’re prompted at the beginning of a transaction to select an option to receive notifications such as email or text messaging, consider the option that will best get your attention.

Visa says examples of qualifying digital goods and services under the new policy include music and video streaming, audiobooks, online learning or fitness classes. As for physical goods, the payment network offered examples like meal kits and beauty or clothing subscription boxes.

How the updated policy compares

Visa's new policy is part of an effort to reduce transaction disputes between merchants and customers. Mastercard made a similar move in early 2019, but its policy requires merchants to get your approval before they can proceed with charges after a free trial ends. Mastercard's rule also covers only physical goods and does not apply to streaming services or website subscriptions.

Visa’s policy applies to both physical and digital subscriptions, but merchants don’t need your specific approval to proceed with charges after a free trial ends.