The Christmas rush is over and experts are warning subscription businesses to prepare for the month of the eagle-eyed consumer in January.
On Monday, the Ashy Bines fitness business was hit with a slew of criticism from customers, who complained to news.com.au that they had not received the deals they expected from the company. Some claimed they had been hit with unauthorised debits for services or shut out from the body transformation courses even though they’d paid for them.
The company has said it is confident transactions have been processed correctly and pointed out that there would always be a “small percentage of customers” that had not properly read the terms and conditions for a service.
However, this is not the first time customers have raised worries about how funds get deducted, particularly in the fitness space. This time last year customers expressed confusion about debits for Kayla Itsines’ fitness app.
Elsewhere in the fitness sector, customers have previously been warned not to interact with some gyms over concerns they were continuing to pay for services even after they had cancelled memberships.
As subscription services and direct debit options continue to gain popularity, legal and branding experts warn businesses they must work hard to communicate with their customers about what they are buying — especially in the early months of the year when new punters come on board and clients start checking their bank statements.
“In January, consumers all take the time to review their finances as a whole. They’re probably a bit more switched on regarding where their finances are going,” says director of Social Concepts, Jessica Humphreys.
Attention to detail is key
Humphreys says that while enthusiastic consumers might be reading the fine print when jumping aboard a gym membership or subscription service in the new year, businesses should not assume they will understand complicated payment terms.
“Reading and understanding are two different things,” she says.
She observes that some businesses use third parties to facilitate payments like direct debits, and these can include different payment and cancellation terms for products like subscription services.
With that in mind, businesses in this space should ensure they explain the terms clearly to the customer at the start to secure a relationship based on trust.
Consumers are expecting straightforward information about what they should pay, with Humphreys saying its important to show this up-front to maintain a good long term subscriber.
“I think a lot of this can be answered in an “FAQ” format,” she says of the payment terms.
The overall goal when pitching a subscription or ongoing service to customers is to “be authentic, transaparent and provide the best customer service,” she says.
Make sure you adhere to the terms
Principal at Enco Legal, Narissa Corrigan, says businesses should also be following best practice when processing payments to ensure no conflicts come up along the line.
It’s important to remember that even though a customer has given their bank or credit card details to a business, it doesn’t give them the right to take “any money they like”.
Letting customers know the exact terms of the payments and not varying these without notice is key, Corrigan says.
“It needs to be clear and say exactly what it being debited, how much and how often,” she says.
The Australian Payments Clearing House, which facilitates “direct credit and debit” payments, also outlines rules and regulations businesses must follow if they are using a direct debit scheme.
This includes keeping records of all direct debit requests from customers for seven years, and providing customers with 14 days’ notice if their payment terms are changing because of a price increase or similar.
Build a relationship
If a customer raises concerns about a monthly payment but it turns out they have misunderstood the terms and conditions for the service, director of Inside Out PR Nicole Reaney says it’s important a company gives them some room to move.
“Customer service teams should be empathetic to consumers who may have misread or misunderstood terms, while offering a ‘get-out’ option will prevent that feeling of being ‘ripped off’,” she suggests.
Humphreys agrees, saying that building a relationship should be the most important thing if a customer raises concerns about their payments, as they will be unlikely to subscribe again if they have reservations about the process.
“As we’re moving more towards this [monthly subscriptions] as a more common payment option, you’re building a relationship, and you have a responsibility to treat customers as individuals. People will switch off if they think you’re treating them as a transaction.”
SmartCompany contacted the Ashy Bines company for further comment but did not receive a response prior to publication.