[HN Gopher] I analyzed SaaS billing dark patterns ___________________________________________________________________ I analyzed SaaS billing dark patterns Author : indus Score : 81 points Date : 2021-11-17 16:48 UTC (1 days ago) (HTM) web link (quolum.com) (TXT) w3m dump (quolum.com) | jedberg wrote: | This is a very cynical take. Not all of these things are designed | to trick you. | | For example, requiring a credit card for a free trial is to | prevent free trial abuse. A normal person can only get so many | valid credit card numbers, assuming you can detect burner cards | (which for the most part the CC companies will happily help you | do). | | Yes, a good company will notify you that a trial is going paid, | and a great company will require an affirmative action on your | part, but the main goal isn't to trick you and hope you forget. | | Also, the part about not prorating costs if you use less | resources. Usually you get a discount for paying up front. The | reason you get a discount is because it allows the company to do | more efficient resource planning, a savings they pass on to you. | If they allowed you to cut back, you haven't upheld your part of | the deal. A big company can absorb the loss, but a small one | can't. | | Yes, some companies do these are dark patterns to increase their | profits. But most have some pretty good non-nefarious reasons to | act like they do. | moneywoes wrote: | Does Stripe detect something like privacy.com? | hdjjhhvvhga wrote: | > Free trials should not require a credit card. Collecting your | payment information is an obvious red flag that you will be | billed as soon as the free trial period ends. | | I remember many people on HN defending this pattern saying that | they are not interested in people who don't want to provide their | CC details, that they are bad customers, they just want a free | ride, and they are not sorry for setting it up like this. Oh | well. I guess with time more people get burned and will finally | learn the hard way this is just one of many grey patterns. | rapind wrote: | How is this a dark or "grey" pattern. Are they being sneaky | about it? | | At most it could be a signal that a business intends to be a | douche, but that's only because douchey companies ruined it. | Just like duchey free customers ruined that for everyone. | | My employer probably thinks payroll is a "grey" pattern by this | logic. | CPLX wrote: | This one doesn't bother me. In this scenario they're providing | a real actual product that presumably they've worked hard on | and has value. The free trial is their way of demonstrating | that they have faith it's a good product and I'll want it. My | credit card is a way of demonstrating that I'm a real customer | that will pay if I do turn out to value it. | | That seems like a reasonably balanced transaction on both | sides, not sure it fits into this framework. There are so many | far far worse practices out there. | rhizome wrote: | This is exactly right. For years it was conventional business | wisdom and best practice to focus on getting the CC. We could | probably find some pretty embarrassing (for the web industry) | threads if we wanted to look. | human wrote: | Requiring a credit card for a trial is fine, as long as you | don't convert automatically to a paying membership. And if you | do, please send me a reminder a week before at least. | dhimes wrote: | I'll add: A reminder with an opt-out link. | dqv wrote: | It's about what pisses off fewer customers. If I was stubborn | and believed everything I read on HN about customers, I would | continue to piss off a lot of people by designing under the | assumption that I should only get CC details at the end of the | trial. | | For certain types of customers, it is surprising and annoying | to have to fill out CC info at the end of a trial. The customer | gets the notice the trial is ending soon, but ignores the part | about adding CC info to keep using after the trial. Then the | day comes, we get them on the phone to ask if they will stay | with us, they say yes but the person who has control of the CC | is gone for the day. _You're not really going to turn it off | are you?_ Sorry, but we have to. | | So the easy solution is to make the credit card form | recommended but skippable. Skippers just need to know that the | trial won't be extended if they can't pay. In either case, they | still need to give the OK to charge at the end of the trial. | digitalengineer wrote: | Hubspot. The yearly plan is way cheaper. But you need to cancel | it 3 months in advance or you're on the hook for 'the same | period', thus another year. No reminder email of course. | rsstack wrote: | FullStory sent us a reminder email last week that we need to | cancel 2 months before the annual contract ends. I started a | Slack thread, we all agreed we love FullStory, done. I think | SaaS that try to trick their customers by not reminding them | about their cancellation policy (which isn't consistently 1 | month, 2 months, or anything, and is hard to track when you're | a small startup) are just afraid their product isn't good | enough or valuable enough for people to renew. Instead of | improving their product, some exec can say "let's not remind | them", and get about the same rate of retention. | indus wrote: | applicable to a majority of annual contracts of top SaaS | vendors. | encoderer wrote: | Of all the nasty things somebody can do with billing, I'm | surprised the author leads with card-upfront trials. | | "Free trials should not require a credit card." | | This is opinion presented as fact. This is not a dark pattern. | Totally unrestricted free trials are wonderful, you've invested a | ton in your product and you want a prospective customer to | experience everything. But there are legions of abusers and bad | actors of all kinds. Having an opt-in to use/abuse your platform | for 2 weeks is not always viable. Card up front is not a perfect | filter, but it's helpful in turning this noise way down and | letting you focus on helping actual prospective customers become | successful with your product. | indus wrote: | Dont you think users with malintent abuse the platform | irrespective of whether a card is on file or not? | kevincox wrote: | Credit cards act as a "cost" of sorts. Credit cards are a | limited resource, it is not free to acquire more credit | cards. By requiring a valid credit card you are basically | relying upon the verification that credit card issuers do to | prevent unlimited abuse. | atgarone wrote: | I'm sure that when you're analyzing SaaS transactions for a | year (full time), you see a lot more data than we more-select- | few-who-can-discern do. | dinobones wrote: | You forget this is HN, where software engineers will go off | on tangent talking about how "they could have designed the | airplane rotor to not crash" or something equally ridiculous. | Everyone here is an expert at everything, because they wrote | a blog once, or since Paul Graham is perceived to be an | expert on everything, they can be too. | indus wrote: | > since Paul Graham is perceived to be an expert on | everything, they can be too. | | ROFL. | flerovium wrote: | It's about effort. The seller is asking you to put in the | effort to enter your payment info in order to use the "free" | version of the product. It's an exchange. The seller benefits | because there is less friction to paying later. | | The dark pattern is billing the card _without_ consent from the | user, or some weird implicit consent. | saahilsaini wrote: | as a new entrepreneur trying to understand saas expenditures this | was an insightful read into the industry | schnebbau wrote: | > Your company needs a CRM, so you sign a year-long contract for, | say, 50 seats on your chosen SaaS CRM. Then -- yikes! After six | months, half your team is laid off. Will the CRM let you adjust | and pay for 25 seats for the remainder of their contract? | | > That's a big NO. Unused seats? Still gotta pay for 'em. (It's | called "SaaS waste" for a reason.) | | You committed to paying for 50 seats for a year. The CRM may have | made decisions based on that commitment, such as hiring people, | or themselves committing to bigger plans with their providers. | | Why should they get screwed because you choked? Don't commit to | long fixed periods if there is any doubt you won't make it. | hermes8329 wrote: | Saas has obscene markups | ZephyrBlu wrote: | It has "obscene markups" based on costs, but that is not how | SaaS is priced. It's priced on value. | lordnacho wrote: | Is anything being done about this kind of thing? It's one of | those steal-a-dollar from 1M people tricks. If you stole 1M from | one person they'd do something about it. Pick 1M pockets and | nobody can do anything. | indus wrote: | there are a few ideas, to let technology help. | | Others are around legislation, such as the one that came | yesterday from FTC on _call to cancel being illegal_. | tie_ wrote: | Here in Germany, physical businesses have even more egregious | subscription policies than most "dark" SaaS-es. Think, you do not | cancel 3 months before expiration date - congrats, you're now | signed up for another year. As a result, ended up writing a small | PWA to keep track of my contracts and subscriptions. | indus wrote: | Whaat! This one is new. You mean subscriptions from your | neighborhood store such as milk, bread, newspapers, etc? | tie_ wrote: | More like gym, "clubs" (Verein-s), mobile phone, internet, | electricity, etc. It's an established contractual practice, | and e.g. Telekom are not in any way obligated to notify you | when your cancellation date approaches. They can very well | sue you, however, should you refuse to pay your | automatically-renewed-in-advance contract. | | Even in the cases where you're allowed to cancel on the last | day of the subscription, we as humans are very prone to | forget to do that, particularly for longer-term contracts. | Tracking contracts and subscription deadlines is a damn | profitable habit that I wish I had acquired much earlier. | indus wrote: | Curious: if they sue, then the only damage is money they | owe or there is more to it such as credit history, etc? | tie_ wrote: | I haven't really tested it in court, though I did get the | official correspondence that leads up to it. Friendly law | practitioner had suggested that I really don't stand a | chance. | | Not sure about credit damage, but in case of a loss in | such a suit, I'd also have to cover the expenses for the | other side, so it's a risky proposition. | | With my wife we did consider it for a while, but then | decided it's better to do focus on solving that problem | with software and thus started working on contrax.app | (shameless plug!). | niklasd wrote: | Newspapers, fitness studios, mobile providers, railway | discount ticket (Bahncard). Can't say for neighborhood | stores, I haven't really used a subscription at such a shop. | dqv wrote: | Ah yes they call those evergreen contracts in the US. Month-to- | month works for me. It gives us both an out if one of us ends | up not liking the other. | | > As a result, ended up writing a small PWA to keep track of my | contracts and subscriptions. | | You can provide this as a yearly service where if by the ninth | month they don't cancel, they must use it for another year ;) | | Edit: oh you already do sans the contract terms | human wrote: | I'm not sure it qualifies as a dark pattern, but I was really | frustrated by the Logmein pricing. I was paying a relatively | expensive amount for my 100 computers package. Once I went over | that threshold I had to convert to the 500 computers package | which cost 4x was I was paying. That was true even if I had 101 | computers and not 499. I ended up upgrading with a negotiated | price but still don't understand why it's not a price per | computer. | rhizome wrote: | Easier bookkeeping on their part. | elliekelly wrote: | That might be the reason for the different tiers but there is | definitely a dark pattern in the auto-upgrade GP describes. | LogMeIn could just as easily put a hard stop at 100 computers | with a notification the user needs to upgrade to a higher | tier package. Instead they auto-upgrade the user without | asking. (I'm assuming there's no way to avoid the auto- | upgrade. It's one thing if a user opts in to the tier scaling | for their own convenience I think that's different.) | human wrote: | In their defense, I wasn't auto-upgraded. I just couldn't | add computers anymore. I hovered around 99 for a while, | removing old computers, but one day I had to open up my | wallet. | indus wrote: | Easier bookkeeping is the main ingredient of debate between | consumption-based billing (AWS, Twilio, etc) vs user-based | billing. | indus wrote: | Not having consumption-based billing is definitely a callout | issue and many exploit the simplicity of bundled t-shirt | (Small, Medium, Large) SaaS pricing. | cosmolev wrote: | Subscription-based software is already a dark pattern. | wbobeirne wrote: | What would you recommend products that host the service and | have ongoing upkeep costs to do? | newfonewhodis wrote: | I would recommend the creators ask themselves if their | software _really_ needs to be hosted or can it be sold as a | one-off (self-host or desktop/mobile). | Veuxdo wrote: | Seems orthogonal. You can have subscription-based | desktop/self-hosted, and one-time-payment hosted software. | mdasen wrote: | I don't think you should be downvoted for this, but I do | think there are some reasonable responses to it. | | First, supporting desktop/mobile software can be hard. | Customers have all sorts of weird things on their machines. | iOS cuts down on that, but you still lack access for a lot | of debugging and that can cost a lot of money. Support is | expensive. | | Second, I think there's this idea that desktop/mobile | software is a one-off. What happens when Apple removes an | API that your program used? Do you tell uses "sorry, your | $X doesn't entitle you to a working program anymore?" For | better or worse, software requires ongoing investment. If | software requires ongoing investment, it kinda requires | ongoing payment - or operating on the idea that new users | will pay for the improvements required by older users. | However, that's a dangerous assumption. At some point, | there are a lot more older users than there are new users. | Many companies tried to operate pension schemes assuming | that new workers would pay for older workers retirement | benefits. At some point, there are fewer new workers than | there are old workers and it collapses. | | Software maintenance is important, but it can be hard to | price. Do you tell users "you have a license for 2.0, but | you'll need to pay $X to upgrade to 3.0...oh, and 2.0 won't | be updated to support iOS 14 so you're basically forced to | upgrade"? Do we tell creators "if you don't keep this | software maintained in pristine condition for the next 20 | years, you're being predatory"? That kinda just demands | that they do uncompensated work. | | Even if software isn't hosted, there are ongoing costs. | Some of that can be priced into the initial purchase of the | software. Some of it can't be. It's hard to guarantee that | software will continue working for 2, 5, 10, 20 years when | you have no idea what that might entail in terms of work. | 20 years ago, Apple was shipping Mac OS 9. Since then, I | may have needed to upgrade my app from Classic to Carbon, | from Carbon to Cocoa, from 32-bit to 64-bit, from PowerPC | to Intel, and now from Intel to ARM - not to mention the | huge number of APIs that have been broken along the way. | | Is the right model something like what JetBrains does where | you get a perpetual license to the version you bought, but | that version might just stop working given changes around | it (like OS upgrades or new machines it isn't compatible | with)? That doesn't force you to subscribe, but it does | mean that you're likely going to need to upgrade. | Programming languages move on and you're stuck with an IDE | highlighting things as bugs or that won't launch your | program because it isn't compatible. | | Subscription-based pricing gives creators an incentive to | keep investing in their program and it gives customers | predictable costs. No one wants to hear "sorry, this won't | run on M1 and we're not going to upgrade it for free for | you so here's a $X charge that you have no way around given | that Apple is abandoning Intel". | magicalhippo wrote: | Our software is subscription-based, and our customers love it. | They get a predictable cost over time, rather than large costs | every now and then. We can afford to include features that | otherwise might not be justifiable in terms of new sales. | | On the flip side, one of our competitors who hasn't switched | has been struggling for years and a recent new version almost | killed them off as many customers didn't feel they could | justify the $10-20k or so to buy the license to the new | version. | | A key part of our success is that the subscription price scales | linearly with customer activity. There's a fixed base price per | active user, and in addition there's a cost associated with | certain actions. This means that the subscription price scales | with the customers activity and hence income. If they have a | slow month they have less income but pay less, if they have an | active month they have higher income but they also pay more. | | FWIW our software is primarily installed on premise, but we do | offer hosted service as well (base cost is different for the | two cases). | hdjjhhvvhga wrote: | No, I don't think so. If the seller actually incurs monthly | costs like hosting, this is absolutely fair. What I would call | a dark pattern is when you buy an app, a piece of software that | executes code on your device, and are forced to pay monthly | fees. This gets more and more common. I understand the reasons, | but I personally prefer one-off payments and buy software in | this way. If it's good, I will pay for upgrades anyway. | | Another dark pattern is switching off your customer's apps | remotely as Adobe did to their customers in Venezuela two years | ago. | teddyh wrote: | Why does hosting need to be bundled with software upgrade and | support? Hint: It doesn't. | wly_cdgr wrote: | Without reading too much into the fact, it's still pretty funny | that this is marketing for a SaaS product | notyourday wrote: | > Free trials should not require a credit card. | | I'm not in business to provide services to people who want stuff | for free permanently. They complain on forums, raise stink and | spend nearly no money. They are not my customers. I always ask | for a credit card for a free trial. The fewer non-customers | signup, the better it is for me. | lgl wrote: | While I kind of understand your point of view and not all | businesses are equal, a free trial is not stuff for free | permanently. You should be confident that your product will be | able to make the customer willingly add their credit card after | their trial is over if you are indeed providing them with a | useful service. | not1ofU wrote: | I agree, and was going to posit the same argument, however, a | credit card is a useful way to get unique info. If someone | signs up to free trail without something like a CC, instead | using an email address, then they just have to register a new | email address to get further free service. Although I am sure | there are alternatives that I havent considered. | brooklinnash wrote: | What's your thought on alternatives, like Ahrefs' $7 for 7 days | trial? | notyourday wrote: | Unrestricted service at the highest plan level, 1 to 2 weeks, | credit card not only required but is authorized for the plan | price - do not settle transaction as it is still a free | trial. This ensures: | | 1. Whoever tries the service at least theoretically met | minimum qualification to be a customer - they have a credit | card and can authorize several hundred dollars on it. | | 2. We get the real lead. | | 3. We limit the number of people who recycle free trials -- | this happens _a lot_. | bazhova wrote: | AWS costs are somehow always higher than your estimate. Even when | using their little calculator. That's the dark pattern right | there. | atgarone wrote: | I got locked into a reseller agreement with JustHost for my | wife's GSuite account, which she uses for her full-time work. Now | I'm paying them $90 a year just so I can retain my GSuite | services without her having any downtime or losing her data. | | Only recently did I discover GSuite has an FAQ for getting out of | reseller agreements. Going to have to act on that. | elias94 wrote: | I forgot the AWS password once for an account with only one S3 | bucket. I did the recovery procedure but they wanted to verify my | identity using my document. I send them my ID, which was with a | different address from my account information. | | They didn't accept my ID and I wasn't able to stop the service | and the recurring payment. Fortunately I registered my payment | with a prepaid credit card, so was easy to empty the card and let | them billing into the void. | | Since then, I always use a prepaid card for recurring payment. It | saved my ass in a way. | | One of the largest dark pattern is also having a poor customer | service. | r00fus wrote: | Is failure to pay (ie, card authorization) good enough for | inability to cancel? Couldn't they just invoice you and hold | you liable for fees regardless? | dmitrygr wrote: | Only until they try to collect and you produce proof that you | tried _A LOT_ to cancel | indus wrote: | A failed card auth does not remove the obligation to pay. | Most vendors write if off, and don't follow-up after a few | emails. Plus, they don't want users to get pissed off and | post a negative review. | | Many vendors have now optimized their billing flow to reduce | write-offs. They start charging on the first of the month for | the upcoming use, and then cancel the account if the auth | continues to fail. | imilk wrote: | Some banks make this much easier by allowing you to spin up | virtual cards w/ daily spend limits on them. | jmsuth wrote: | This is one of my biggest qualms with building SaaS apps on the | App Store. You can't do a free trial without requiring an Apple | Pay confirmation which will auto-convert. We get lots of negative | reviews because of it, but there's no way around it without | offering some free version. | indus wrote: | Though apple pay does a decent job on the cancelation UI, the | free-to-paid notifications (in email) are always a miss. I have | seen this in trial subscriptions at home with buyer's remorse | later. | brooklinnash wrote: | "Our research shows that companies underutilize their SaaS | products by an average of 30% across the board" | | Big yikes. | | I'm curious which of these approaches would have the biggest | impact on bringing that SaaS waste down. | indus wrote: | Though not easy to implement, but consumption driven billing | rather than seat/user-driven would reduce the grief quite a | bit. | | In the early days AWS EC2 became popular for their per compute | per hour pricing compared to hosting providers fixed monthly | cost. | CPLX wrote: | These are far from the worst patterns. I've seen so much | awfulness out there. | | My favorite recent one was a renewal if you don't cancel by a | deadline that's months ahead of the actual end of the contract | period _and_ it also had a substantial rate increase _and_ all | the language that we supposedly agreed to wasn 't actually | present in the contract we signed. | | Those terms were in one of those "incorporate by reference" | clauses where it says this contract incorporates terms and | conditions that are at the following URL and it's 45 pages into | the fine print of that URL. I mean supposedly, since it's their | URL and could just change the terms whenever they want and lie | about it. | | Which by the way wasn't clickable in the Docusign. Basically it | was in an unlit basement behind a sign that said beware of the | leopard. | | It's not ethical. It's just exhausting to deal with some of these | companies. I think we all know who they are, they tend to be | concentrated in the field of SaaS companies that cater to the | sales and marketing functions. | | Lately I've had what I've found to be a fairly clever solution | however. We wrote up a standard document that contains _our_ | terms and conditions for SaaS providers. | | The key clauses basically say "We hereby give formal notice that | we do not consent to any automatic term renewals, any automatic | price increases, any charges to credit cards made 'on account' | without our specific consent as to the date and amount charged. | To the extent our agreement requires advance written notice of | any of the above this letter serves as that notice." and so on. | | Then we send it certified mail to the company's corporate HQ | address and keep the tracking number. We do this on the same day | we sign any software contract, it's basically an automated | process at this point. | | So whenever it comes around, and it has, we just say sorry we've | already given formal written notice we don't consent to that. | Here's a scan of the document and the USPS receipt maybe work on | your internal communications. | | The fact that we have to do this is _apalling_ but hey it 's | better than the alternative. | Plasmoid wrote: | Does it actually work? Have you tested in in court? | CPLX wrote: | Haven't made it to court but it would certainly be legally | sound. Courts love certified mail and formal notices it's not | even clear what counterargument they could have. | | But in real life what it really does it get them to back off | and go back to having a normal negotiation about what we _do_ | want to do for renewal instead of the bullshit attempt to | mislead and trap us. | | Needless to say if there's any viable alternatives to | companies that do this we take them but in some categories | all the options suck. | indus wrote: | Interesting idea. | | But isn't there a risk that if the company that gets your | certified mail, reads it, and then cancels your account? | CPLX wrote: | Sure I suppose that's a risk. But then they'd be in breach of | the contract since the letter definitely doesn't say to | cancel the account, it says that this is notice given to all | extant notice clauses that could result in additional | billing, renewal, and so on. It's worded well I'm | paraphrasing. | | As a practical matter though I don't think there's much to | worry about. These guys don't have a process to field letters | like this. | | The joy comes from the elegance of it all. If they want to | play a game of exploiting the fact that people don't read the | fine print then they should be prepared for a fair contest. ___________________________________________________________________ (page generated 2021-11-18 23:00 UTC)