Hypothetical question
My SaaS has annual subscriptions that auto-renew. Currently I send renewal reminder 7 days before. A customer is now disputing a charge saying they didn't get enough notice. What's the legal requirement here?
My SaaS has annual subscriptions that auto-renew. Currently I send renewal reminder 7 days before. A customer is now disputing a charge saying they didn't get enough notice. What's the legal requirement here?
This varies by state. California requires 15-45 days notice for auto-renewals over $50/year (under the Automatic Renewal Law). New York has similar requirements. Illinois requires clear disclosure at signup plus reminder.
Federal law (Restore Online Shoppers' Confidence Act) requires clear disclosure of auto-renewal terms before the transaction. But state laws often add notice requirements tbh.
Best practice regardless of law: send notices at 30 days, 14 days, and 3 days. Email + in-app notification. Makes chargebacks much easier to fight and keeps customers happy.
Also make cancellation easy. California requires cancellation to be as easy as signup — if they signed up online, they must be able to cancel online.
For the current dispute: check if your terms were clearly disclosed at signup. If yes, and customer didn't opt out, you're likely fine legally. But might be worth refunding to avoid chargeback fees and bad reviews.
Going forward, update your renewal flow. The $50 for a potential chargeback isn't worth the hassle.
Following this - dealing with a similar breach of contract issue.