Sneaky subscription tactics hit the Apple App Store

Sneaky subscription tactics hit the Apple App Store
Recent news reports suggest that the iOS App Store is plagued with apps which use sneaky subscription tactics. Shashank Venkat digs deeper to find out why such tactics are a bad idea. 

Subscriptions are a big focus for Apple. The company recently hit $1 trillion in valuation, and Apple’s services business (which includes subscriptions) is an integral part of their growth story. In fact, Apple has even held secret meetings with developers to promote subscriptions within apps. The company is also diversifying its offerings through an upcoming subscription service which will bundle TV, music and news together.
While Apple clearly sees the merit of the subscription business model, many app developers have resorted to sneaky subscription tactics to trick users into subscribing for expensive recurring billing plans. For example, some of these ‘scammy’ iOS apps lure users into signing up for a free trial and then convert automatically into paid plans without it being clear to the consumer. Others confuse users through the use of deceptive UI elements and hard-to-cancel subscription offerings, among other misleading tactics.
Surprisingly though, some of these sneaky apps are among the top grossing apps on the iOS App Store. If you look beyond market leaders such as Netflix, Pandora and Tinder, you will see a lot of hitherto unknown utility apps in the top grossing charts. While the rankings may suggest otherwise, the critical user reviews reveal the true tactics being used by such apps.
TechCrunch has estimated that one of these apps, called the Scanner App, has been making as much as $14.3 million per year in subscription revenue. The app, which is ranked at no.69 in the top grossing charts, offers a free trial which converts into a paid subscription within just 3 days. The TechCrunch report has highlighted many complaints where users missed the fine print and got duped into paying for this document scanning app.
Another app which has been called out for such tactics is TinyLab’s QR Code Reader which tricked users into signing up for a $156 annual subscription plan. The app is ranked 220 on the App Store, and rakes in subscription revenues worth $5.3 million. All the more surprising is why such apps exist and flourish on the App Store at all, considering that the iPhone has its own native QR code scanning utility.
Many of these apps have relied on people not reading the fine print and opting for free trials without fully realising what they are getting into. These free trials are really just agreements for signing up to full blown subscription programs, unless users go to iTunes and cancel them manually. Since many of these free trials convert to paid subscription plans in such a short time frame, people often don’t have the time to rethink their decision after downloading such apps. It is only after the first bill shock that people realise they have been misled.
Let’s face it - subscriptions have become a big business for app developers as consumers spent around $10.6 billion on subscription apps on the App Store last year. The number is projected to grow to $75.7 billion by 2022. With such growth potential, it is not surprising that scammers have found gateways to trick consumers into spending. Dark tactics like these are nothing new in the software world, and it is likely that the scammers will always find other ways to make money. Clearly, reputable app developers, consumers, as well as Apple themselves, will need to stay vigilant to ensure that such apps are not allowed to flourish in the future.
What is Apple doing?
Following a slew of such reports, Apple has sprung into action and removed QR Code Reader and Weather Alarms from the US App Store. The company has also cracked down on 11 more apps which were mentioned in a Forbes report.
Since Apple’s Developer Guidelines are very stringent, it is surprising that app developers were not more transparent in laying down the subscription terms. However, many reports also suggest that perhaps Apple is partially to blame for allowing such apps to flourish on the App Store. While this may not be a failure of the app review process itself (since tactics like these could have been employed post approval), the failure to police its App Store effectively is definitely drawing criticism towards the tech giant.
Moreover, Apple has also buried its subscription management settings within iOS, making it hard for users to opt out of subscriptions. It takes quite a few taps on the iPhone to get to these settings, which is not intuitive or obvious. The TechCrunch report draws a comparison with the Google Play Store where subscription management settings are easily accessible in the top-level navigation itself. The incident highlights that Apple may need to make its subscription management settings more prominent as these plans get more attention from businesses and consumers.
The Takeaways
These reports have highlighted that the nascent subscription industry must now evolve and mature to deliver a much better subscription experience. Customers and businesses will do well to keep the following in mind:
For Customers
While reading the fine print is not something subscribers are used to bothering with, it is important to stay cautious while signing up for free trials with unknown or new app developers. As a subscriber within the Apple ecosystem, it will also help to learn how to find the subscription management settings within iOS so that you can keep a track of your subscription dollars. You may want to perform a quick audit to see whether you are indeed subscribing to apps which you may not need. Apple also sends monthly invoices to your email which detail your App Store subscriptions, and it is worthwhile to keep a tab on these too. Don’t be a passive consumer, become an active subscriber instead!
For Businesses
Subscription businesses should know that such sneaky subscription tactics will eventually be called out. When customers find out the deceptive tricks being used, they will eventually shun the app and leave negative reviews behind. It is also likely that Apple may delist your app from the App Store, harming your reputation as a business. Worse still, you may even be exposing yourself to legal action, so it is much better to stick to genuine subscription growth tactics. If you have a compelling product or service, your subscribers will indeed find you.
Moreover, it is also important to employ a good subscription management platform. A robust system will help you to manage your subscribers more easily, and provide a good user experience for your customers. As a subscription business, if you can get the user experience right, you have won half the battle!