Compliance with California Automatic Renewal Law (ARL)
Loop Subscriptions always respects and recognizes the merchant's priorities of being legally compliant with any new law introductions or amendments to the existing ones.
We have covered the following topics in this article
- Understanding the law
- How is Loop helping the merchants stay compliant?
- Need help?
Understanding the law
The Automatic Renewal Law's (ARL) main goal is to encourage honesty and openness in business dealings involving subscription-based purchasing. In the US, a number of states have already passed or are presently drafting ARL regulations.
In simple terms, the ARL update is designed to protect California consumers, and if your business sells to customers in California, the ARL applies to you.
Effective July 1, 2022, companies must start sending a reminder notice before renewing a subscription for (1) subscriptions with a term of one year or longer and (2) subscriptions that contain an expiring free trial, gift, or initial discount period that is longer than 31 days.
Disclaimer: The information in this manual is not intended to be legal advice and is not intended to be taken as such; rather, it is presented for general informative purposes only. Readers of this manual should speak with their attorney for guidance on any specific legal issue.
How is Loop helping the merchants stay compliant?
Minimum charge cancellation
In the Loop customer portal, you can configure the text that needs to be shown to the customer in case there is a minimum order condition added to the subscription.
- As per California ARL laws, customers should be allowed to cancel without any restriction of minimum orders added. To facilitate this, we have allowed two options for cancellation flows
- Allow customers to cancel even if minimum order criteria are not fulfilled (Recommended)
- Show a message to customers about why they cannot cancel their subscription
Note: If you want to choose the second option, then you would be required to "Accept legal responsibility” before changing from the recommended option.
As per updated ARL laws, customers should always be allowed to cancel their subscriptions via the customer portal. Currently, we provide two options on the Loop admin portal.
- Allow customers to cancel subscriptions (Recommended)
- Show cancellation instructions to the customer
By default, the first option is enabled, but you must accept the legal responsibility disclaimer if you want to choose the second option.
We've included a new setting that enables customers to terminate subscriptions without giving cancellation reasons in accordance with the regulations. By default, this setting would be turned on. If a merchant chooses to disable it, they must agree to the legal responsibility disclaimer in order to do so.
Customer portal experience for skipping the cancellation survey-
On the customer end, we would need to create one more translation key for the reason help text.
Case A: Reason mandatory
- Default text: Select a reason for canceling your subscription.
- No reason would come as selected, and the proceed button will be disabled unless the customer chooses a reason.
Case B: Reason optional help default text
- Default text: Select a reason for canceling your subscription (optional).
- No reason would be selected, and the proceed button will be enabled.
Update to upcoming payment notifications
- New payment reminder setting for subscriptions to be charged yearly.
- Default value: 30 days from the charge date
- Merchants can choose any value between 15 and 45
No need to fret; we’re here to jump in and help you out. Reach out to us at firstname.lastname@example.org or feel free to ping us on chat by clicking the support beacon on the bottom right.
Loop Subscription Team 🙂