Subscription businesses in the US must follow state and federal automatic renewal rules (sometimes called ARLs or "negative option" laws) designed to protect consumers. Key obligations include clear disclosures, express informed consent, advance renewal notices, and easy online cancellation. The guidelines below summarize what businesses need to do and how Loop's platform helps meet these requirements. Key laws include:
FTC Click-to-Cancel Rule – A federal rule mandating one-click cancellation nationwide, effective July 14, 2025 (note: it was recently vacated in court, but similar standards are likely to be enforced).
California ARL (Cal. Civ. Code §§17600–17606) – Updated by Assembly Bill 2863 (effective July 1, 2025) to add click-to-cancel requirements.
New York ARL (N.Y. Gen. Bus. Law §527) – Requires clear disclosure and renewal notices for promotional or trial offers, requires consent for price hikes. (Final amendments took effect November 5, 2025.)
New York City Click-to-Cancel Rule – Prohibits requiring a subscriber to complete a reason survey before they can cancel. Effective October 1, 2026. Loop applies this requirement at the New York state level rather than city level, since region is determined by the subscriber's address.
Colorado Online Cancellation Act (SB25-145) – Requires a one-click cancellation link for subscriptions sold online. Effective August 6, 2025 (for consumer subscriptions).
Disclaimer: This contents of this article are general guidelines, not intended to be legal advice and not intended to be taken as such. Brands should consult qualified legal counsel for specific compliance requirements in each jurisdiction.
Pre-purchase disclosures (before checkout)
All laws place a strong emphasis on what customers see before they place an order. The goal is to ensure customers clearly understand they are enrolling in a subscription and are not surprised by future charges.
Before checkout, subscription terms must be presented in a clear and conspicuous manner. This means the information should be easy to notice, easy to understand, and shown before the customer completes their purchase.
Subscription nature: Indicate the product is a subscription that auto-renews.
Billing frequency & price: State how often and how much the customer will be charged.
Trial or promo details: If there’s a trial/introductory offer, specify when it ends and what the regular price will be after.
Cancellation method: Tell customers how to cancel (e.g. via their account page).
Example: On a product page or checkout, you might show: “$20 every 30 days, auto-renews until cancelled. Cancel anytime at any time in your account.” Shopify’s subscription checkout surfaces these terms by default.
These disclosures are typically presented on the product page, cart, or checkout, and should be positioned close to the final purchase action.
Platform responsibility
Pre-purchase disclosures and consent capture occur at checkout and are therefore handled by Shopify. When using Shopify’s subscription checkout, Shopify ensures that subscription items surface the required subscription agreement language and renewal acknowledgment as part of the checkout flow.
Merchants should avoid removing, hiding, or misleading subscription disclosure language at checkout, as this may impact compliance with ARL expectations.
Express informed consent
In addition to disclosures, ARL requires businesses to obtain the customer’s express informed consent before charging for a recurring subscription.
Express informed consent means that the customer:
Actively agrees to the subscription terms
Understands that charges will recur automatically
Is not enrolled through pre-checked boxes or passive acceptance
In practice, this means:
Subscription consent must be affirmative, not implied.
Customers must knowingly opt into a subscription if both one-time and subscription options are offered.
Subscription agreement language must be presented before the order is placed, not after.
Shopify’s checkout enforces this by displaying subscription acknowledgment language when a subscription item is present in the cart. This ensures customers explicitly agree to recurring charges as part of the checkout process.
Loop operates after checkout and does not control pre-purchase disclosures or consent capture. Once a subscription is created through Shopify, Loop ensures that customers can:
Clearly see their subscription details
Manage and cancel subscriptions easily
Receive required renewal and upcoming charge notifications
One-Step Online Cancellation (Click-to-Cancel)
Laws require customers to be able to cancel online as easily as they signed up, not forcing them to call or jump through additional hurdles. Two distinct requirements fall under this umbrella, and Loop addresses them with two separate settings grouped under Cancellation compliance in Loop admin > Retain > Cancellation flows > Preferences.
States with full ARL click-to-cancel requirements, such as California and Colorado, require that eligible customers reach an offer or a direct cancellation without being forced through a survey at all.
New York City's Click-to-Cancel rule is narrower: it only prohibits forcing a subscriber to select a reason before they can cancel. It does not require skipping benefits pages, offers, or remarks.
ARL compliant cancellation flow
Loop's Enable ARL compliant cancellation flow for U.S. customers preference covers the first requirement. By default, California and Colorado are enabled, since they already enforce ARL rules, and you can enable additional states as needed, but you cannot deselect California or Colorado.
When this preference is active, Loop's cancellation flow follows this order for subscribers in the selected states:
Show offers: The subscriber sees any active cancellation offers marked for ARL states first.
Fallback to benefits: If no offers are set up or applicable, Loop shows the benefits page, if configured.
Cancellation reasons: If there is no benefits page either, the customer sees the cancellation reasons page.
Direct cancellation: If no retention steps are enabled, the subscriber goes directly to the final confirmation screen to cancel instantly.
To target ARL-state customers with an retention offer, edit the retention offer and check "Available for U.S. customers under Automatic Renewal Law (ARL)", then customize the offer text as needed.
Only offers marked this way are shown to ARL-covered states. This flow applies only to subscribers located in the selected states, determined by the subscriber's shipping address.
Learn more: Retention flows
New York City's Click-to-Cancel rule
New York City's rule takes effect October 1, 2026. Loop applies it at the New York state level rather than the city level, since region is determined by the subscriber's shipping address, with billing address as a fallback.
Loop's Make cancellation reasons optional preference, in the same Cancellation compliance section, covers this requirement. New York is selected by default and cannot be removed, and you can add other regions where a similar reason-survey restriction applies.
Note: Enabling this setting does not skip, remove, or reorder any other step in the flow. Benefits pages, offers, remarks, and win-back offers still run exactly as configured for subscribers in the selected regions; only the reason survey becomes skippable.
Minimum-charge cancellation
Do not require customers to complete a set number of charges before cancelling. Both California's ARL and Colorado's law forbid imposing minimum charge requirements as a barrier to cancellation. Loop's default is "no restrictions," meaning customers can cancel even after the first payment.
To facilitate this, Loop offers two options for cancellation flows: allow customers to cancel even if minimum order criteria are not fulfilled (recommended), or show a message to customers about why they cannot cancel their subscription. If you choose the second option, you are required to accept legal responsibility before changing from the recommended option. Make sure you inform your customers about this cancellation policy beforehand to avoid disputes.
Renewal notices
For subscriptions with free trials, promotional pricing, or long terms, send reminder emails before the renewal. State laws often require these notices for added transparency. For example:
California: If a subscription auto-renews after a trial or promotional period (especially 31 days–6 months), send a notice 3–21 days before the end. For annual subscriptions (≥180 days), send a reminder 15–45 days in advance.
New York: Similarly requires notices for trial or promo renewals.
Notice content: Each reminder should include the upcoming renewal date, the amount to be charged, and simple instructions or a link for how to cancel
In Loop, we have Upcoming payment notifications
Located under Settings > Notifications > Preferences
For subscriptions that renew less than yearly, you can send the upcoming order notification from 1 to 25 days.
For subscriptions that renew yearly or greater, you can send the upcoming order notification from 15 to 45 days.
Common state requirements
While specific rules vary by state, many ARL laws share common elements:
Clear Terms & Consent: States like California and New York require that all material subscription terms (price, frequency, auto-renewal, and cancellation procedure) be clearly disclosed before purchase. Explicit agreement to recurring billing is required (no hidden defaults).
Advance Notice: States often mandate a reminder email for trials or long-term plans. For example, California requires annual sub reminders 15–45 days ahead. (New laws in other states may set similar windows.)
Click-to-Cancel: Most ARLs now require an easy online cancel option. For instance, Colorado’s new law (SB25-145) explicitly requires a simple online cancellation for auto-renewal contracts. As a best practice, make cancellation as straightforward as signup.
By enabling Loop’s U.S. ARL compliance and following these guidelines, you can meet the legal obligations in each state where you sell subscriptions.
Compliance checklist
Display Subscription Terms: Clearly label subscription products and show terms (price, interval, auto-renewal status) at checkout.
Require Active Opt-In: Use unchecked boxes or separate subscription option so customers knowingly consent.
Include Disclosures: At purchase, list billing frequency, total cost, trial period and end-date, and cancellation method.
Send Renewal Emails: Email reminders before renewal for trials/promos. For example, 15–45 days prior for annual renewals.
Make reasons skippable where required: Keep Make cancellation reasons optional enabled for New York, and add any other region with a similar reason-survey restriction.
Use Loop's Cancellation compliance settings: Turn on the relevant preferences under Retain > Cancellation flows > Preferences, and select the relevant states. Mark offers "Available for U.S. customers under Automatic Renewal Law (ARL)" where applicable.
Adhering to these steps and using Loop's built-in features will help keep your subscription service compliant with automatic renewal laws across the U.S. Always review the specific laws in each jurisdiction and consider consulting legal counsel for detailed guidance.
FAQs
How do I enable United States ARL compliance in my cancellation flow, and how does it work?
To ensure your cancellation flow is compliant with United States Automatic Renewal Laws across applicable states, enable the Enable ARL compliant cancellation flow for U.S. customers preference under Cancellation compliance. Once enabled, California and Colorado are selected by default, and you can enable additional U.S. states, but you cannot deselect California and Colorado.
To configure compliant retention offers, open the offer's availability section, select Available for U.S. customers under Automatic Renewal Law (ARL), then configure the offer content. When a customer from a selected ARL state tries to cancel, they are shown configured offers directly; if no offers are configured, they see the benefits page; if benefits are not configured, they see cancellation reasons; and if no retention steps are enabled, they are taken directly to the confirmation screen to cancel instantly.
What does New York City's Click-to-Cancel rule require, and how do I comply?
New York City's Click-to-Cancel rule prohibits requiring a subscriber to select a reason before they can cancel their subscription. It takes effect October 1, 2026, and Loop applies it at the New York state level, since region is determined by the subscriber's shipping address, with billing address as a fallback.
To comply, keep Make cancellation reasons optional enabled for New York under Cancellation compliance, in Retain > Cancellation flows > Preferences. New York is selected by default and cannot be removed.
Does enabling "Make cancellation reasons optional" skip the rest of my cancellation flow?
No, enabling this setting only makes the reason survey skippable for the regions you select. It does not remove, reorder, or skip any other step; benefits pages, offers, remarks, and win-back offers still run exactly as configured for subscribers in those regions.
How does the cancellation flow behave when US ARL compliance is disabled?
When US ARL compliance is disabled, the cancellation flow follows the configured path: benefits page, then cancellation reasons, then offers. In this mode, you can also configure additional restrictions, such as minimum order criteria before cancellation, making cancellation reasons mandatory, and custom cancellation button behavior.
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