At some point at the start of each year, right around tax time, my wife and I will begrudgingly put together our annual budget.
As adults in our 30s, this shouldn’t be a problem. But each year’s budget inevitably reveals some sort of headache.
This year, that headache came in the form of call-to-cancel subscriptions.
At-home gym cancellations are still gym cancellations
Back in 2020, as the pandemic began to spread and the world was shutting down, my wife and I realized that we'd become quite sedentary. As two young professionals who worked in the city and commuted via public transportation, we did quite a bit of walking each day.
With covid shutting everything down, however, the only walking we got in each day was with our dog Murphy.
The holidays were approaching, and with the stress of the pandemic and all the adjustments that came along with suddenly becoming a remote worker, neither of us was really in the mood to figure out Christmas shopping.
Instead, we thought it would make sense to “invest” in a bit of self-improvement in the form of a Tempo Studio.
Tempo is a cool little company. Located in San Francisco, Tempo’s mission is “to give everyone the power to realize their strength and lead an active, full life.”
The product we bought was the Tempo Studio, an at-home gym system with an easel-looking vertically-mounted screen, a built-in infrared camera and storage for weights and dumbbells.
With the Tempo Studio (which typically retails at nearly $3,000) and a monthly subscription ($41.44/month) you can take a wide range of live and on-demand fitness classes. Not only do you get the benefit of guided workouts, but the infrared camera actively watches your posture and provides the same types of corrections a personal trainer would. It can also tell exactly how much weight you have on your dumbbell without needing to manually adjust settings through the Studio’s touch screen.
If this sounds like the future of at-home fitness, it’s because in a lot of ways it truly is. But go to cancel your subscription and you’ll quickly realize it’s just like any other gym.
While it took near minutes for my wife and I to click around the their website, spend thousands of dollars on a Tempo Studio, and register for a monthly subscription, canceling wasn’t nearly as easy.
To start, I couldn’t easily find a cancellation option within the Tempo app or within my account settings online. (I've been told these options exist, but I'm dubious.) When I finally found an option to pause my membership, I was forced into an instant message with a sales rep.
Given how much I liked Tempo — despite being sold faulty equipment that I later had to fix with the help of a Tempo IT specialist via Zoom — I was willing to pause. But upon learning I could only pause my membership for 3 months, at which point the billing would automatically resume, I decided to just go ahead and cancel.
Unfortunately, the sales rep informed me, this meant that I would have to be transferred to a senior sales rep, all of who, apparently, were busy at that moment. If I left my number, I was told, it would be at least 24 hours before they could call me back.
At this point, I did what I had been dreading from the start. I decided to call them myself. After all, there’s no way every senior associate was busy for the rest of the day. After going through an automated system and another junior (I’m guessing?) sales rep, I reached the final boss.
Holding times included, it took me well over an hour out of my Sunday just to cancel a subscription that took me a minute to sign up for.
I was pissed off and exhausted. The sales reps were all perfectly nice and I did my best to stay calm throughout the whole process. But I was left feeling dirty. Like I had been abused by a system designed to trap me into a membership indefinitely, and I had just barely gotten out of it.
It left me feeling like the companies I had chosen to do business with weren’t happy to do business with me. In fact, it felt like they were down right hostile towards me.
Everything is horrible
When it comes to shopping in America, two things are dramatically different today from what they were even 10 or 20 years ago. Those two things are 1) the quality of the goods we purchase and 2) businesses’ attitude toward consumers.
The downward trend in the quality of the goods we consume is longstanding, but feels like it’s rapidly accelerated in recent years.
This trend goes back to an old idea of consumer engineering. Vox’s Kimberly Mas has a great explainer video on this in her post on “Why everything you buy is worse right now.”
In it, Mas discusses the origins of consumer engineering, an idea invented by Earnest Elmo Calkins in the 1930s. The most basic way to think of consumer engineering is in today’s terms of planned obsolescence—or the idea that products are built with their eventual (planned) breakdown in mind.
Under consumer engineering, the greatest profits can only be achieved through the acceleration of replacement cycles. Mas highlights fast fashion as such an example. But these artificially fast replacement cycles aren’t unique to the fashion and clothing industry.
In technology, Moore’s law set the table for equally fast upgrade cycles.
While a bit more technical, Moore’s law is the observation that the number of transistors in an integrated circuit doubles about every two years. In laymen’s terms, it's an observation about just how much more powerful computers get with each new processor generation.
In the early days of smartphones and mass-market laptops, Moore’s law was easily observed. Consumers could feel the difference between the computer they bought two years prior, and the one they coveted at the computer store today.
But as smartphones went from telephones with a few cool features, to literal super computers that fit in our pockets, the gap between each generation became smaller and smaller. However, despite these decreased leaps in power and efficiency, the acceleration of replacement cycles hasn't ceased.
Even though computers aren’t improving as fast as they once did, and clothes seem to fall apart quicker than ever before, companies continue to pour marketing dollars into manufacturing increasingly shorter trend cycles.
At the same time, their tolerance for consumers has seemingly shrunk to the point of disappearance. Technology has allowed businesses to distance themselves from the consumers they rely on. And consistent consumer demand in the face of an ever-shrinking standard of quality has left these executives feeling as if they can sell you garbage and get away with it.
Subscribe to hostility
The internet has transformed our economy in ways our parents could have never fathomed and in ways that still seem impossible to many.
But as we’ve abandoned main streets for IP addresses, we’ve also eliminated the contact businesses once had with their customers.
Some of that dislocation is good. It’s allowed for incredible services, like online streaming and the ability to seamlessly download digital content, to exist. But it’s also, to some extent, taken away the accountability that was implicit in a face-to-face transaction.
In an article for the William & Mary Business Law Review titled “Canceling Difficult Cancellation: An Analysis of Recent Regulatory Efforts to Make Canceling Subscriptions Easier,” Carter McCants argues that the rise of subscription services has led many of such businesses down a path that’s resulted in the shattering of the core economic principle of voluntary exchange.
Voluntary exchange is a simple idea in economics that says, in any transaction, both parties have the chance to agree or deny said transaction. For example, if you go to a grocery store and buy a banana, McCants said, that’s an example of voluntary exchange. But if you subscribe to a banana subscription service, and then can’t cancel in time to deny your next delivery, that’s a much different story.
This type of exchange, where only one part is still voluntary to the transaction, has flourished in the age of the modern subscription service.
As McCants points out, “the subscription-based economy is projected to grow to $1.5 trillion by 2025, which is more than double its 2021 valuation.”
While many subscriptions are voluntarily purchased, subscription companies deploy a number of dark patterns to lock consumers into services long after they’ve agreed or, often, even know they’re still subscribed.
As per McCants research:
According to a 2017 survey, more than one-third of Americans have enrolled in a subscription service, like a gym membership, without even knowing it. From 2017 to 2019, consumers filed more than 50,000 complaints about free trials to the Better Business Bureau in the United States and Canada. In total, consumers have lost well over $1.4 billion on free trials, with a median loss of $140 per victim.
First and foremost, as outlined above, paying for a service you didn’t know you were paying for is, in itself, a violation of voluntary exchange. But beyond that, the fact that so many Americans (as many as 33 percent) are victims of this "involuntary" exchange is alarming.
The reason these consumers get unknowingly trapped into subscriptions is due to what are called dark patterns.
Dark patterns are manipulative user interfaces that are intentionally designed to trick users into actions they might not take otherwise. According to McCants, the favorite dark patterns of subscription services include:
Click-to-subscribe, call-to-cancel
Complicated navigation interfaces
Deceptive wording
Confusing options
Free trials
While everyone encounters dark patterns, they’re especially effective when deployed on children and elderly users.
Click-to-cancel dark patterns
As I sat there waiting to speak with a human after Tempo’s automated system put me on hold, I began to wonder, “how is this legal?”
To my surprise, however naive that may be, I learned that there’s no rules stopping this type of behavior from subscription-based (or really any kind of) company.
However, in the last year, the Federal Trade Commission has proposed a new rule that would put these sorts of click-to-subscribe, call-to-cancel schemes to rest, as well as many of their dark pattern counterparts.
The “Click-to-Cancel” rule would force companies to make it at least as easy to cancel a subscription or membership as it was to subscribe in the first place.
After the FTC proposed the rule in 2023, it was widely praised by consumers, who took to the FTC comments section to share their stories of encounters with dark patterns.
Equally as predictable as consumer support for the proposed rule, was the swarm of trade associations that came out to oppose it; and to do so by trying to claim only they have the best interest of consumers at heart.
Notably, the Entertainment Software Association, Association of National Advertisers, and The News/Media Alliance, each submitted statements that all amounted to some version of “consumers aren’t smart enough to handle a click-to-cancel system” or “it’s too expensive to build such a system, and we’d have to charge consumers more as a result.”
One of my “favorite” trade arguments, via the Wall Street Journal:
“If sellers are required to enable cancellation through a single click or action by the consumer, accidental cancellations will become much more common, as consumers will not reasonably expect to remove their recurring goods or services with just one click,” the advertisers’ group said in its comments on the proposal.
Inadvertent cancellations could cause consumers to miss out on essential deliveries of food, water or medical products, and could create the inconvenience of requiring the consumer to register again for a service they didn’t intend to cancel in the first place, the ANA said.
This, of course, is offensive. Why must all the burden be placed on consumers? Surely, the same systems that warn about accidentally deleting something from a content management system can be applied here.
It’s further proof that these companies care more about profits than doing right by their customer. It’s a tacit admission that if, for example, a consumer relies on you for food or medicine, you’d take no special care to ensure they meant to cancel their subscription when you saw said cancellation come through. In this regard, the customer is never right.
Equally ridiculous was this tidbit from a similar report in Wired:
[NCTA CEO Michael] Powell also said the cost of complying [with the FTC’s proposed click-to-cancel rule]—including retraining employees and maintaining records for longer than current practice—could force cable companies to raise prices.
In the age of greedflation, it’s laughable to think that “burdensome” rules (aka, rules crafted to protect consumers) are the reason corporations have been raising their prices. Further, the charge coming from an individual who represents cable companies—an industry that’s been disrupted by streaming services which all provide click-to-cancel functions—is painfully ironic.
At the end of the day, a rule that would force companies to make canceling services as easy as subscribing to services, is a rule that is against dark patterns. And for companies that rely on those dark patterns, like gyms (at home or otherwise), this pro-consumer rule is unacceptable.
In that regard, the FTC's proposal and the backlash to it from Big Business, especially in the face of consumers who cheered the rule proposal, is a microcosm of the current state of our economy where companies rely on consumers for survival, but resent them all the same in the process.
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