Automatic Charges After Free Trials: An Immoral Policy?

Last year in August, I signed up for a Student Prime membership with Amazon. There was a free trial for 6 months, after which I would be charged a yearly fee of $60.00.

I unfortunately cannot remember whether I was aware of the payment scheme (the $60 charge part) at the time. I was certainly aware of the free trial (that’s why I signed up for it!) but I don’t think I knew that after 6 months, I would be automatically charged. It’s possible Amazon made the deal clear as day, and it’s possible that it was in small font or not easily noticeable. But the point I will be making here is that, regardless of which was the case, the company policy is an immoral one.

What I think it boils down to is that a company (by the way, although I used Amazon as an example here, I think they handled my situation extremely well, giving me a refund without any issues. This is not a hate piece directed toward them, but a discussion of the policy), in having such a policy, takes advantage of its customers. There is going to be a group of people that either are unaware of the payment scheme at the time, or are aware at the time but forget to cancel the program after 6 months.While I (being in the first camp) was fortunate enough to have found out about the $60.00 charge, and motivated enough to act on it and ask for a refund, that is not the case for everyone. Some people will not notice the charge because they are not careful enough with their finances. Others who notice the charge may not ask for a refund, instead thinking they’ve made a mistake that’s too late to fix. As such, companies with this policy are taking advantage of customers who don’t really want to pay for the product.

One might argue that it’s these people’s own fault that they are being taken advantage of. I would certainly agree, but that doesn’t make the company’s choice to enact this policy a morally acceptable one. If someone leaves their door unlocked, it is not acceptable to go into their house and take their possessions. If a woman is out at night dressed meagerly in a known dangerous part of town, it does not make it okay to rape her. Likewise, just because someone does not pay enough attention to their finances, it does not make it fine for a company to take advantage of that and surreptitiously take money from them.

Another argument might run: as long as a person agreed or signed a contract with the company, such a policy is okay. But even this isn’t true. For one, there can be issues with the fine print: few customers have the time or energy to read entire terms of agreements. Secondly (since the first may not be applicable to this policy), taking advantage of a person just because they have agreed to something is not necessarily right either. If someone agrees to purchase an addictive substance from you for their consumption use, it is not necessarily moral to give it to them and then profit from their situation.

What I think companies with free trials should do instead is send an e-mail near the end of the trial period to allow the customer to decide whether he or she wants to continue the service and start paying for it. An explicit approval or disapproval at that time takes care of the problem, and it does so in an easy way: a simple click of a button.

What do you think about this? Am I missing some clear advantages of the current system that benefit customers considerably? Or is this a net-bad policy that companies need to get rid of?


Posted on April 19, 2015, in Business, Ethics and tagged , , . Bookmark the permalink. 4 Comments.

  1. How can I take this seriously? You don’t even remember if you were duped. The argument that contracts like this are immoral because people are too lazy to find out what they are agreeing to is perverse. It would be one thing to hide such an arrangement within purposely confounding and esoteric text but I am confident based on other experiences I’ve had with Amazon that no such foolery took place.

    Lets not forget that the company is trying to entice customers to use their new service. When you say that they are taking advantage of people who don’t really want to pay for the product you are correct but ignoring the inverse; people who want the product and take advantage of the company by not paying. This is not to say that both agents are immoral. There are goods and bads here and they can be looked at differently by different people. Ultimately, it boils down to any other mutual exchange unless you can show deception.

    I realize now that I have no clue where you are getting your morality from. So, when you make a statement where I can infer that you regard selling cigarettes as immoral I doubt I have made any sense to you.

    • “How can I take this seriously? You don’t even remember if you were duped.” I said that was irrelevant to my argument. I only mentioned it since it was part of my personal story that made me think about it in the first place.

      “There are goods and bads here and they can be looked at differently by different people. Ultimately, it boils down to any other mutual exchange unless you can show deception.” I’m confused about your argument here (as you expected! congratulations!). Do you think the only way a voluntary exchange can have any immorality attached to it is if there is fraud involved (in other words, no truly voluntary exchange can be immoral)? I do think that if you sell someone an addictive substance knowingly, you are committing an immoral act, and profiting from their harm. (There are some subtleties to my view on this, but I don’t think it’s necessary to go into them at the moment)

  2. No congratulations are in order. I got to the end of my comment and realized I wasn’t on the same page with you, sorry. I have a difficult time with morality beyond an individual valuation. Not to say there are not or can not be absolutes but I don’t understand where these are calculated from. If you are willing to have the discussion I would like to know how it would be immoral for you to sell me heroin if I think heroin is good?

    • I’ll admit my reading on philosophy in the area of ethics is very weak and I don’t know what the foundation for my ethics is. Because of that, I have to rely on intuition somewhat. However, the way I think it could be immoral to sell someone heroin, even in the case where the buyer likes it and knows it’s addictive, is because you are helping the person hurt himself. From an objective point of view, it could be said to be bad for the consumer whether or not he subjectively likes it.

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