Negative Option Billing: Current Practice and Future Concerns

Authors

  • Paul R. Messinger University of Alberta
  • Yuanfang Lin University of Alberta
  • Yujing (Sabrina) Yan University of Alberta

Keywords:

negative option billing, free-to-pay subscription conversion, automatic account renewal, consumer information, e-commerce, Asia Pacific

Abstract

Negative option billing is a business practice in which goods or services are provided automatically while the customer must either pay for the service or specifically decline it in advance of billing. With the growing popularity of e-commerce, there has also been a growth of instances where this practice has started with a limited-time free trial, followed by an automatic conversion to being subscribed for a service, with fees deducted automatically from customers’ pre-arranged payment account until the customer specifically contacts the vendor to opt out. This study reviews the growth in negative option billing and related marketing practices in the last decade and describes government reactions to curb undesirable or deceptive versions of such practices in the North America and Asia Pacific areas in general. Recognizing their rapid diffusion on the Internet, questionable forms of such practices should be fully understood by marketing professionals, consumers, and government regulatory bodies.

Keywords: negative option billing; free-to-pay subscription conversion; automatic account renewal; consumer information; e-commerce; Asia Pacific

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Published

2011-11-30

How to Cite

Messinger, P. R., Lin, Y., & Yan, Y. (Sabrina). (2011). Negative Option Billing: Current Practice and Future Concerns. Asia Pacific and Globalization Review, 1(1), 55–69. Retrieved from https://journals.macewan.ca/apgr/article/view/35

Issue

Section

Case Studies