Many digital subscription service providers, such as streaming platforms (Netflix, Disney+ or TOU.TV, for example), music listening platforms (Spotify, Apple Music, YouTube Music) and some home delivery services (Goodfood, for example) operate on negative-option contracts. Once you subscribe, you stay subscribed... unless you opt out!
"Consumers benefit from a free or discounted trial period, after which they are automatically subscribed to the service at the current price. To unsubscribe, they must take steps to unsubscribe before the next renewal or delivery," explains Sébastien Boulerice, lawyer and budget advisor for Option consommateurs.Tips and tricks to counter digital over-subscription
The same principle is also used by application developers. You try one out for free for 7 or 14 days, and then you're billed the agreed rate, monthly or annually, as the case may be. The question arises: are we facing a phenomenon of "digital over-subscription"?
Option consommateurs ' s Industry Confidence Barometer seems to confirm this. More than half of respondents (51%) subscribe to a negative-option contract. Of these, 66% say they subscribed to this type of service with the intention of opting out at the end of the trial period...
But you still have to get organized! "All these subscriptions add up, their unit cost adds up and sometimes goes unnoticed in your budget," notes Sébastien Boulerice. The expert therefore suggests making a periodic inventory of active subscriptions and... making choices." Mark the renewal dates for each platform on your calendar, and add an alert a few days before each one. That way, you'll have time to finish that current TV series you've been enjoying so much, just before you cancel your subscription if you want to be able to forage on other platforms afterwards." - Sébastien Boulerice
Another popular trend is also highlighted in theOption consommateurs Trust Barometer: split payments. This allows consumers to pay for a purchase from a participating merchant in instalments, spread over time - interest-free and without a credit check - for a good they want now. Payment providers such as Afterpay, Sezzle and Paybright are at the forefront of this practice in the country.
Many consumers now adhere to the "buy now, pay later... consume more" principle. So it may be tempting to increase the value of our shopping basket, knowing that a $100 expenditure will be divided into four $25 instalments, the first due immediately and the others at two-week intervals.
The same survey also points out that 68% and 44% of participants buy clothing and footwear respectively online. In the former case, already 9% of buyers turn to this method of financing, while 7% make this choice for a new pair of boots or sneakers.
Users of such a service who multiply their purchases through fractional payments, without properly managing their budget, could quickly find themselves in a spiral of debt. "It's better to plan ahead, save a periodic amount at regular intervals and then make the purchase you want," recommends Sébastien Boulerice.
And as with any purchasing process, it's a good idea to read the terms and conditions of the contract in question carefully. "A consumer who misses a repayment under a deferred payment agreement may be obliged to repay the full amount immediately. This would mean losing the benefit of term financing, while putting additional immediate financial pressure on the consumer," he warns.
The multiplication of digital subscriptions under negative-option contracts and the use of split payments are two of the new purchasing habits that are gaining in popularity. They're slowly eating away at your savings, perhaps without you even realizing it...
But there's a third major issue that's on Option consommateurs 's radar every year, and it's likely to add to your purchase bill: the purchase of an extended warranty. In the last two years, 17% of respondents have purchased one. Among the reasons given, 71% wanted peace of mind, while 29% did so following representations from the vendor.
In Quebec, consumers already benefit from the legal warranty. Be careful in these circumstances, as the legal warranty covers, more often than not, more aspects and for longer than the extended warranty. So the next time you're offered an extended warranty, think twice. Because, when it comes to expenses and cost increases in 2022, there's unfortunately already no shortage of choice!
