Breaking Stories

80% of Consumers Now Have at Least One Subscription but Declined Payments Are Predominant Threat

By most accounts, the consumer love affair with retail subscription services has never been stronger, and yet a simple erroneous payment decline can seriously test their loyalty. PYMNTS’ new Optimizing Subscription Payments polled 2,200 shoppers to see what makes them buy — and what makes them say bye-bye.

Download the report: Optimizing Subscription Payments

While many industries took a major hit from the pandemic, retail subscription services were one of the exceptions, as lockdown lifestyle led to a surge in demand from consumers who still needed a retail fix — and something new to look forward to.

Today, 80% of consumers in the U.S. have at least one subscription, up from 72% in February 2020. But one factor stands tall on the friction list that could send them shopping elsewhere: hiccups in the payments process.

In the PYMNTS report Optimizing Subscription Payments, a collaboration with FlexPay, consumers were surveyed about their subscription use and payments preferences, as well as their reactions when a recurring payment was declined.

On average, more than 25% of consumers had experienced a declined payment in the past 12 months, but those results varied widely based upon the types of subscriptions at stake.

For example, the consumer services category saw 45% of subscribers reporting a declined payment over the past 12 months, followed closely by education and training subscribers at 43%.

As far as consumer reaction was concerned to this often-avoidable event, declined payments caused 27% of subscribers to cancel the service altogether, with 17% moving on to do business with competitors. Of those subscribers that were hit with a payment decline, 35% indicated that the experience negatively affected their satisfaction with their services.

Among the segment of subscribers who let their services end, 53% said their satisfaction diminished after the declined payment. Of subscribers who switched to rival services, 43% said their satisfaction decreased after a payment was declined.

What is your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *