A recent decision by a federal appeals court has temporarily halted the US Federal Trade Commission’s (FTC) ‘click-to-cancel’ rule. This was a measure designed to make it easier for consumers to cancel subscriptions and recurring payments. However, while this delay may be seen by some businesses as a stay of execution, it would be a mistake to view it as a license to continue outdated, friction-filled cancellation practices. Monica Eaton, Founder and CEO of Chargebacks911, tells us more.
While the procedural pause and pushback from merchants has left many wondering ‘if’ and ‘when’ the click-to-cancel rule will be implemented, the momentum behind consumer-friendly subscription policies is real, and merchants should see this moment not as a reprieve, but as a strategic opportunity to lead rather than be forced to follow.
The real issue is the consumer experience
The FTC’s proposed rule aimed to address a growing chorus of consumer complaints about how difficult it can be to cancel recurring subscriptions. In turn, this has led many cardholders into bypassing the merchant’s cancellation process altogether and recovering their money another way: through their issuing bank.
Half of consumers go directly to their bank without ever contacting the merchant when they have an issue with a purchase, and when it comes to subscriptions, this is even more common. In fact, according to the recently released 2025 Cardholder Dispute Index, nearly 85% of consumers want their bank to cancel subscriptions on their behalf, highlighting not only their unwavering trust in banks, but just how frustrating many merchant-side cancellation flows have become. Moreover, about 19% of chargebacks filed were directly linked to consumers trying to end or cancel a subscription, and over 17% cited a confusing return or cancellation process as the reason for initiating a dispute.
The majority of consumers aren’t filing chargebacks out of malice, but in many cases, they do so out of frustration. And that frustration is typically rooted in a lack of communication or distrust, issues that could often be prevented if subscription-based merchants had more transparent, user-friendly offboarding processes.
Regulatory or not, consumer expectations are shifting
Even without a federal mandate, the direction of consumer sentiment is unmistakable. Today’s customers expect cancellation to be as easy as sign-up. In the subscription economy, convenience and control is the baseline rather than a value add.
Consumers are now demanding parity between onboarding and offboarding, and consumers are quick to call on their bank if merchants aren’t willing to provide it. And this mindset isn’t just for subscriptions. In fact, more than 76% of consumers now prefer to resolve issues through their bank, bypassing merchants altogether. And perhaps more importantly, 88% say a successful dispute makes them more likely to file another one. This should be treated as a warning to merchants that if your customer service can’t keep up with the convenience and trust provided by a cardholder’s bank, you risk pushing that customer into a perpetual cycle of contacting their card issuer every time there is an issue with a product or transaction, resulting in unnecessary chargebacks.
Younger shoppers are leading the chargeback surge
The latest Cardholder Dispute Index also exposes a major generational divide. Consumers under 30 are more than twice as likely to prefer mobile wallets compared to those over 60. Additionally, nearly half of consumers aged 18–44 have used Buy Now, Pay Later (BNPL) services, which are particularly prone to billing confusion and subscription-related friction.
These younger, digital-first shoppers are also more likely to skip merchant contact altogether and initiate disputes directly through their banking app. For brands that still depend on multi-step cancellation processes or hard-to-find unsubscribe links, the implication is clear: younger customers will get their money back one way or the other.
And it may not just be one single transaction. When subscription customers dispute recurring payments with their bank, they sometimes dispute multiple payments, including periods where they used or were satisfied with a product or service. This means revenue going back months could be taken away, multiple chargeback penalties assessed, and damage to a company’s merchant account and reputation.
The costs of inaction are rising
Merchants that delay changes to their subscription or cancellation flows are not avoiding costs but merely shifting them. And often, those costs are far greater than they realise.
We estimate that friendly fraud and misuse now cost US merchants over US$170 billion annually. Globally, that figure is far higher. This impact on revenue includes lost sales, penalties, reputational damage and operational costs tied to refuting unnecessary disputes.
Also consider this: 40% of cardholders say they often don’t recognise transactions on their statement due to confusing or incomplete billing descriptors, a small oversight that frequently results in unwarranted chargebacks. That’s money lost not because of fraud, but because of poor communication and lack of knowledge of their customer experience. Merchants need to take proactive measures to understand not only what it’s like to shop with them, but what it’s like to raise an issue.
Self-regulation is a strategic advantage
Merchants have a choice: Respond to consumer expectations now or wait to be forced into compliance later.
The click-to-cancel rule may be delayed, but consumer demands are immediate, and we see the financial consequences of what happens when businesses don’t meet their customers halfway. By proactively offering clear cancellation options, merchants reduce chargeback risk, build long-term trust and align themselves with where the market is already headed.
Practical steps merchants can take now
- Audit your cancellation flows. If it takes more than two clicks or requires contacting automated support, it’s time for a change.
- Provide parity between sign-up and cancellation. Make leaving just as simple as joining. By making the path to cancelling subscriptions easy, merchants have a chance of learning why the customer is terminating services, or even give them incentives to stay.
- Use clear, honest language. Ditch the fine print and dark patterns as customers see right through them.
- Offer alternatives without coercion. Pausing or downgrading a subscription is fine but “cancel” must remain prominent so as not to drive the customer toward disputing transactions with their bank.
- Improve billing descriptors. Make sure customers know exactly who charged them and why.
In the court of public opinion, the rule already exists
Ultimately, whether or not the FTC’s rule takes effect, the real driver of change is consumer expectation. In the court of public opinion, the verdict is already in: customers want transparency, control, convenience and fairness.
Merchants who respond to that now will future-proof their operations, improve customer retention, and avoid the costly cycle of disputes. Those who wait may soon find themselves losing revenue, not just to chargebacks, but to competitors who made the smart move first.
In the subscription economy, trust is the product, and if consumers don’t trust you to let them leave easily, they’ll turn to the chargeback system to get what they want.
