I want to switch my product from $40 to <$5 with a hidden high subscription price. Similar to what those Acia Berry, Teeth Whitening, Diet Pill companies are doing. Has anyone had any experience doing this. Who did you use for payment processing, what was the risk like, chargebacks, etc.
What would the subscription price be? If you do anything "hidden" you WILL have chargebacks. Trust me! You need to be VERY up-front with your customers. The banks/processors are VERY quick to jump on the customer's bandwagon, even if they "agreed" to the terms.
The best thing is for you to set things up on a "trial" basis with an automatic rebill. That basically means, Bob signs up for $5 and if he doesn't cancel on day 7, you'll bill him an additional $40 (just as an example) for full and complete access. You need to be clear in that you will bill your customers if they don't cancel the trial. Have it pointed out boldly on your site, otherwise, you may be setting yourself up for disaster.
Before you adopt that as a business model, you might consider that the FTC has been cracking down on companies that use such deceptive practices: http://www.ftc.gov/opa/2009/07/shortchange.shtm [in particular see the action against "Grants For You Now" and "Google Money Tree" for "failure to adequately disclose" that customers would be enrolled in a program that charges a monthly fee] The continuity programs of acai berry and the like have been similarly criticized: http://www.thenewstribune.com/business/story/806321.html http://www.ctv.ca/servlet/ArticleNe...090323/20090323/?hub=Health&subhub=PrintStory And don't forget the 2006 case against Enzyte, which resulted in fines and prison time: http://en.wikipedia.org/wiki/Enzyte#Federal_indictment_and_trial
Quality SEO is describing it well, my demographic is upper middle class and I want to do a low fee that will be easily over looked on a CC statement. (think $9.47 listed as qwikstop) Combined with ease of canceling membership and willingness to do previous months refund, I would try and stick to the "Light Grey Area". I think these companies use a full blown Merchant Account though I couldn't tell from looking at their code. Good references Nonny I'm a first class "googler" but had a good bit of difficulty doing research on this. I think this basically falls in the category of Predatory Contracts, the government doesn't really seem to want to tackle that issue as to what can and cannot be in a contract, it's vague and deeply affects business.
Yes, it is somewhat unethical, and being a buyer myself, I despise of merchants that have those practices. But, as long as you make your cancellation process fairly simple and don't hide the facts, you should be fine. People don't mind spending their money but they don't like being tricked out of it. At least that is the way that I feel about it.