Nearly everyone has a subscription to at least one product or service, the majority of us have so many subscriptions that we can barely keep track of them all. In fact, some of us are paying for subscriptions that we have long forgotten about. For some, the amount being spent on unused or forgotten subscriptions is more than you would think. From access on demand, to magazine subscriptions that have been sent to an address you haven’t lived at in 2 years, there are a host of companies making cash off services that you aren’t even using.
The psychology of subscriptions
Subscriptions always seem great at the time because the idea behind them is that ironically, you will save money by paying a flat- rate monthly fee. However, this cost-saving logic only applies if you are actually using the products or services that you are subscribing to. Subscriptions, for the most part, are really just a form of impulse buying in the sense that you are anticipating that you will need or want a specific product for months and years to come.
The reality, however, is that most subscriptions lose their lustre after just a few months, and whilst some people choose not cancel them because they believe that they will be depriving themselves of future cost saving, others simply forget that they signed up for the subscription entirely.
£338 million pounds spent monthly on unused subscriptions
Yes, you read that right. Research shows that £338-million pounds are estimated to be spent every month on unused subscriptions in the UK – that’s a lot of unread magazines! The figure produced by Topcashback went on to reveal that more than 40% of UK residents are contributing to this number to at least some extent, with magazine and gym memberships being the main contributors.
So how are these subscriptions going unnoticed by so many? The theory is pretty simple really – we have just too many subscriptions to keep track of! The Topcashback survey discovered that as many as 30% of people paying for unused subscriptions didn’t even take notice of the wasted pounds for four months or more, whilst more than 15% didn’t notice for a year or more.
Signing up for a gym membership is great in theory, but the reality is that many of us don’t really get our money’s worth in the long run. Some studies even suggest that as many as 4 out of 5 gym memberships go basically unused after the first month or so into subscriptions. Unfortunately, most gym subscriptions come with long-term contracts ranging from 6 months to a year, forcing you to continue to pay the monthly fee regardless of whether or not you are using it.
One of the easiest ways to get sucked into a subscription that you don’t necessarily need is by signing up for the always-tempting “free trial”. Netflix is famous for this, they having been offering 30-day free trial subscriptions for years now. You simply enter your name and credit card details and in return you get a month of Netflix absolutely free. The problem with this is that it is the customer’s responsibility to cancel the subscription themselves if they no longer wish to continue the subscription. Netflix won’t notify you that your free month is nearly up; they will simply continue the service subscription and bill your credit card accordingly until you tell them otherwise. Most of us both forget to cancel or become accustomed to it (which is exactly what Netflix is hoping for) and decide to keep the service permanently. Either way, Netflix us a big winner, as are all the other companies out there who use free trials to attract customers.
Next time you go through your bank account, it may be well worth looking at where your money is really going as you could be contributing to large companies’ profits without really seeing any benefit. If you’re not using your subscriptions, then simply cancel them – you could be using the money for something you really will get the use out of!