Subscription cancellation compliance: The €50,000 reason to update your European subscription flows
A Berlin vitamin startup once got hit with a massive €50,000 fine for hiding their cancel button. Yes, you read that right - €50,000 just for making it hard for customers to cancel their subscriptions.
At Firmhouse, we've seen these new rules reshape the subscription landscape. The message from the EU is clear: make cancellation easy or risk paying the price. If you sell subscriptions to European customers, these rules affect you, even if your incorporation is elsewhere.
Europe isn't just suggesting better practices, they're demanded with serious penalties. Here's what you need to know:
EU-wide rules you can't ignore
The EU is finalizing the Digital Fairness Act with one crystal-clear principle: canceling must be as easy as signing up. It will become the law across all EU states, and it's important to be aware of the implications for your subscription program.
Germany's €50,000 warning
Germany's "Kündigungs-Button" law has been catching businesses off-guard since July 2022. It's a strict law that demands:
A prominent "Jetzt kündigen" (Cancel now) button for all your subscribers
Placement where customers naturally look for it when managing their subscription
A simple, one-step confirmation process to cancel their subscription
No redirects to phone support or chat to run their cancellation
With fines up to €50,000 per violation, Germany isn't playing around.
France's three-click maximum
France took a slightly different approach in 2023 with their three-click rule:
Cancellation must be completed within three clicks minimum
The button must say "Résilier votre contrat" (Cancel your contract)
No sneaky obstacles or hidden steps to make it harder
Face fines up to €75,000. We've seen French authorities actively investigating subscription sites, making compliance an urgent priority.
UK's game-changing penalties
The UK just raised the stakes dramatically with penalties up to 10% of global revenue for subscription traps. For larger companies, that could mean millions in fines for poor cancellation experiences. With margins at an all-time low, something to consider seriously.
Three ways to make your cancellation flow compliant
It's important to be compliant to these rules. There are luckily simple ways in doing so.
1. Always-visible cancel link
The HelloFresh approach: a persistent cancellation link in the footer of every logged-in page. This foolproof method ensures customers can always find the exit, no matter where they are in your experience.
2. Simple my account subscription management
Our favorite approach: create a clean "Manage subscription" section that houses all account actions together:
Pause delivery
Skip next order
Change products
Pause subscription
Cancel subscription
This method satisfies all European requirements while giving you opportunities to offer alternatives before customers fully cancel. It's the key to building a strong relationship, and offering a way out if your customer really wants it.
3. Email cancellation made easy: avoid sending notifications from a no-reply@ address
Include an easy e-mail for customers to contact you in all communication. Don't communicate from a ''no-reply@yourbusiness.com" but always allow customers to hit reply and have support on the other end of the line.
Most importantly: Your cancel button should match your buy button in size and visibility.
But there is an upside: Why easy cancellation boosts your business
Making cancellation easy sounds counterintuitive, but there are clear upsides for your business and customers that you wouldn't expect.
Conversion rates jump when trust increases
When potential customers see "Cancel anytime" during signup, conversion rates typically increase 20-30%. Which makes sense, if you know you can easily leave, you're more likely to try something new. Offering easy cancellation and subscription management options is the most powerful conversion tool.
Customer support teams win by having less questions and tickets
Offering easy ways to manage and cancel subscriptions result in less support requests, a win for all customer support team, even if you already have great AI flows implemented. Less tickets, is less cost in your business. Both you and you customers win with having less friction in the process.
The win-back advantage offered via smooth cancellation
Here's the marketing secret the subscription giants know: customers who leave smoothly are more likely to return later.
Data shows subscribers who had a positive cancellation experience are 3x more likely to reactivate when their circumstances change. By making cancellation painless, you're actually setting up future sales opportunities.
Transform cancellations into learnings
Smart businesses learn from cancellations. It's the best source for information on where your product or experience should be improved. A well-designed cancellation flow collects valuable feedback that informs you with clear improvements to be made.
Five quick steps to bulletproof compliance
Ready to get compliant? Here's our battle-tested process:
Add a standout cancel button to all account pages Make it impossible to miss, properly labeled in local languages, and fully mobile-responsive. No exceptions!
Eliminate friction in the cancellation journey Remove password re-entry requirements and unnecessary steps. If they're logged in, let them cancel in one go.
Automate confirmation communications Send immediate, clear confirmation email with all the details required: cancellation date, subscription end date, and final billing information.
Localize everything for each market Use the exact wording regulators expect:
Germany: "Jetzt kündigen"
France: "Résilier votre contrat"
UK: "Cancel now"
With Firmhouse you easily configure this to your needs.
Dangerous mistakes we see every day
We help merchants set up subscription flows, and these compliance failures appear constantly:
Hidden cancellation links that require multiple clicks to find
Forcing customers to call during limited business hours
Tiny gray text for cancellation vs. big colorful buttons for purchasing
Multiple "Are you sure?" screens designed to frustrate users
Different processes for different countries without proper localization
Each of these mistakes can trigger investigations and penalties. We've designed Firmhouse to eliminate these risks automatically.
Why Firmhouse is your compliance partner
Most subscription platforms were built for the US market, where regulations are only now catching up to Europe. Luckily we have European compliance in our DNA:
One platform, multiple compliance standards means you don't need separate stores or setups for different countries
Regulatory updates as laws continue to evolve over time
Comprehensive audit records protect you during investigations
Our merchants sleep better knowing their operations are compliant across all European markets.
The future is customer-friendly cancellation
The subscription businesses winning in Europe embrace these regulations to be successful and win the market.
We believe the best subscriptions retain customers through value, not through friction. When customers stay because they want to, not because they can't figure out how to leave, you build a more sustainable business.
Want to see how simple European compliance can be? Book a demo today and we'll show you how Firmhouse can help.
