The Dang FTC and Merchant Companies

OR how about:

For $1 you will get Access to product x as well as a 14 day test drive of our membership site which rebills at $14.95/m after the trial period?

On a side note,

This particular FTC law really ticks me off.

I had developed a huge sales funnel around this $1 free trial thing.

Its funny because the free trial rule must have been sneaked in with their review disclaimer thing.

So as long as you don't specifically write the words 'free' or 'free trial', you are OK, even if it still implies free for the first x amount of days?

Honestly I would run it by my merchant provider before using it. My guess is that they will not like it and you really want to find that out before your launch instead of in the middle when they shut your processing down.

While the focus has been on the word FREE that is just because that is the word everyone is using. What they want everyone to get away from is the idea that there is no cost and then the customers get billed later on. Saying it will cost nothing means the same as saying it is free. Same exact idea different words and my guess visa and mc will see it as such and there is no way I would take a chance on losing my merchant account on such hair splitting myself.

Best bet charge $1 and offer a refund if you want. Are you seriously going to get a much lower response with $1 then free?

Absolutely. Run it past your merchant bank before using it, though. That's not the sort of thing you want to assume I'll get right. There could be things in the mix that I didn't know and couldn't account for.

If they approve it, send me a bottle of scotch.


Paul

Charging small amounts of money is better than a free trial anyway. If your prospects aren't willing to spend $1, $5, $7 for 30 days access to your program then they either aren't real prospects anyway or you haven't convinced them of the value of your offer.

Ron

Note: I am still not a lawyer. I have never worked for the Federal Trade Commission. The following is the opinion of an informed, but not professionally trained or certified, ex-copywriter. Use this information at your own risk. Do not take this advice with alcohol, if pregnant, or if you are under the age of 21.
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Daniel, It's not that simple. Consider the following examples:

"You get complete access for 14 days before your first billing. Look it over. See the value for yourself. Cancel any time in those first two weeks, and it costs you nothing."

"You get complete access for 14 days before your first billing. Look it over. See the value for yourself. Cancel any time in those first two weeks, and you won't be billed."

Semantically, those are identical statements. They are, however, perceptually somewhat different. The second example is much closer to "If you don't cancel in 14 days or less, you're going to be billed."

Taken in isolation, the Commission would probably prefer that wording, since it will be clearer to the standard of the "typical customer."

For banks, it's a toss-up. Which one a given bank would prefer, assuming either, will depend on their risk exposure at the moment and what lawyers they have on staff. Banks are, perhaps surprisingly, much more likely to be legalistic and hair-splitting than the Commission. They have more latitude for it, and they're private entities, among other things.

When looking at an ad for deceptiveness, the Commission doesn't look at anything in isolation. They are charged to consider the aggregate effect of the advertisement on a typical consumer. The "reasonable man" standard, as it was previously called.

The Commission, for example, knows and takes into account that almost no-one reads every word of any sales letter. They look at the overall meaning that will tend to be conveyed, weighting each element by its impact on the potential for clarity and accuracy of the final impression.

Note the word: Impression. Not "literality of phrasing." That's where a lot of people, especially in this industry, screw up. They think that some minor point, made once in an obscure part of the copy, is their "Get out of jail free" pass.

Don't work that way, goys and birls.

It is much easier to avoid problems with the Commission than with a bank. Banks can be, and often are, arbitrary and self-interested. The Commission is complaint-driven, and hasn't the time or resources to waste on someone who is clearly communicating the truth to their customers in an open fashion.

The Commission scares people more for a very good reason: They can take all your stuff and toss your butt in jail.

Try to be too clever, and you're asking to have them do just that.


Paul

Just my opinion but I swear I hate when people complain about something that's "free" but they have to opt in.

Opting in doesn't cost anything I don't care what anyone can say about that.

Since most people don't think in terms of "lifestyle cost" but actual "Monetary" cost then this is true. Plus if they really don't want to get emails from someone they can just opt out once they sign up. So there really isn't a cost to them.

It just gets back to people bitching about having too much email even though they signed up to a giveaway event and then got 20 free ebooks, graphics, or other resale rights product...

What do they expect to happen??????

Uggh....sorry if this sounds like I'm being a dick (which I'm not trying to be) but at the same time I believe in personal responsibility and this relates as well to the OP about FTC/CC rules.

Unfortunately, lazy people who don't do anything with anything they buy online have convinced the government that all these "scammers" are out to get them.

Yet another point to the "welfare" crowd.

As someone who has signed up for 1$ trials and stuck and also cancelled, I can say it has been super simple...and even if it wasn't you can always go to the credit card companies to get your money back. So really there isn't any "scamming" going on b/c no one actually loses their money (all processors protect buyers WAAAAYYYY more than the people who actually pay the processors their revenue).

So basically, what I wish the government, credit card companies, and everyone else would do is encourage smarter consumers who don't fall for stupid tactics that are there to remove risk (that's the point of a trial) and follow the golden rule.

Also...people BE SMART WITH YOUR MONEY!!!

Cheers,

Brad

The FTC is not the issue for 99+% of us. The Visa/MC guidelines are and they specifically say that you cannot use risk free trial, risk free, or free if there is going to be a charge down the road. The only time you can use the word free or imply that there is no charge is when there is not going to be one EVER. If you plan on charging them next month for a membership then you just cannot use the word free.

So you charge a $4.95 for a 14 day trial period as a very easy solution. Is this really going to lower your conversions so much that you would risk losing your merchant account? The big thought to keep in mind as well is these rules are not coming from your bank but Visa and MC themselves so you lose your merchant account for trying to skate past the rules you well might not be able to get another one.