September 07, 2023
You aren’t going to turn down an easy way to save hundreds of dollars, right? Well my friends, my September challenge is to do just that by reviewing your auto-renewal subscriptions and canceling what you no longer need.
We live in a subscription economy now, from streaming services, to pet food, to computer programs and apps. Businesses push us to sign up for a monthly or annual subscription that keeps automatically renewing. New research points out what we all know deep down in our bones: We forget about auto-renewal charges and thus just have our account automatically renewed even if we no longer need the good or service, or might be able to downgrade to a less expensive option.
Researchers recently scoured a major credit card’s data and estimated that consumers not paying attention boosts retailer revenue by up to 200%. Put another way: Certain businesses pocket up to 200% more in sales through auto-renewals that consumers simply don’t pay attention to, and only cancel when forced to reconfirm if they still want to stay signed up.
And chances are you don’t even remember many of the auto-renewals you are signed up for. A survey last year found that people underestimated the total monthly cost of their automated subscriptions by more than $130. That works out to a staggering underestimate of $1,500 a year. And that doesn’t even include the subscriptions people are aware of but don’t really need or want.
I am being conservative when I say you could likely save $1,000 a year if you cut out or scaled back on unneeded subscription services.
Here’s your challenge:
Step 1: Create a master list of all your subscriptions.
This is tricky because if a business auto-renews you once a year and you didn’t notice the email or check your credit card statement that month, you might have missed it.
Log in to your credit card accounts and see if in your statements there was a 2022 annual review. Many cards provide this automatically. A review of that annual statement will show renewals tied to that card. If you use PayPal, you can log in and see your current roster of auto-renewals.
Next, I would do a search of your emails using keywords such as “renewal” or “auto-renewal” or “subscription.” This could give you more leads on subscription services you are enrolled in.
And be sure to check with any streaming services you use. It’s common to sign up for a monthly subscription to a service offered through your main streaming account so you can watch a certain series. But then you forget about the subscription and continue to pay a monthly fee long after you’ve finished your binge-watching.
Step 2: Sort your subscriptions into Must-Haves and No-Longer-Needs.
Cancel the No-Longer-Needs and stay strong. You will likely be offered a less expensive deal if you agree to remain a customer. Please be smart here. If you don’t need it, you don’t need it. Just because a $30 monthly charge is now miraculously $10 does not make it a good deal. That’s still $120 a year for something you told yourself you don’t need.
On the Must-Haves: I still want you to log in to your account and see if there is a more economical offer. Or better yet, turn off the auto-renew and when your subscription is about to expire, you will get plenty of notifications to renew. That’s when you start negotiating for a better deal.
It’s super important to understand that businesses are betting on your inertia. That’s the technical term thrown around to explain when we don’t pay attention. Many businesses rely on your inertia. They make money off of the fact that you’re not paying attention to auto-renewal charges.
Some vendors have no give in their rates, but plenty of businesses will offer you a better deal if you contact them to cancel a subscription. Just be careful, because they may offer you a great deal for three months, and then the fee reverts to a much higher renewal rate. They are once again betting on your inertia. This is easy to work around: Send yourself an e-calendar alert a week before the end of your subscription date to cancel. Contact customer service and negotiate again. Just be sure to make a note of when that new deal expires, so you aren’t converted to a higher rate.
In a more sane world consumers wouldn’t need to jump through these hoops. But at least for now, with businesses preying on your inattention, there’s plenty to be saved each year by constantly reviewing your auto-renewals.