Subscription fatigue is real. Control should be, too

Spending a Saturday exercising, then loafing around in a comfy outfit watching television and snacking on pretzels is hardly new. But these days, it’s highly likely that every one of those activities is subscription-based. Everything from food to clothes to exercise classes, not to mention streaming services, is available for a monthly charge.

American consumers on average spend around $118 a month and have more than eight subscriptions on average. The trouble is, sometimes they forget they’ve signed up for a subscription — or want an easy way to cancel one — so consumers dispute the charge with their bank.

That’s a form of “friendly fraud,” when a cardholder disputes a legitimate transaction out of confusion, buyer’s remorse or, in some cases, out of frustration because there's no clear way to cancel the subscription. Whatever the reason, when a customer disputes a transaction, the bank will put a payment block on the merchant for that customer’s account. This results in additional fees for the merchant when re-trying the payment and prevents the customer from re-subscribing easily if they want to restart the subscription. Today, a quarter of Mastercard chargebacks are driven by recurring transactions when customers are trying to cancel a subscription or don’t remember a purchase.

This costly and time-consuming chargeback process exacts a toll on all parties, from the frustrated consumer to the merchant who loses revenue and incurs chargeback fees, with consequences beyond the transaction itself. When a consumer disputes a subscription with their bank, merchants lose the ability to influence the relationship with their customer.

While the payments ecosystem has been focused on streamlining the dispute resolution process for consumers, merchants need help too, says Navpreet Randhawa, senior vice president for Ethoca, a Mastercard company. That’s where a new partnership between Mastercard and Fraud Deflect, a leading chargeback mitigation platform, comes in.

Fraud Deflect will be fully integrated with Mastercard’s Ethoca Consumer Clarity Smart Subscriptions, a subscription management service embedded in banking apps,

to bridge the communication gap between merchants and card issuers. The service will allow subscription-based businesses to proactively resolve recurring payment disputes before they turn into costly chargebacks.

It also might help them retain the customer. “The subscription economy has transformed consumer expectations for control and visibility,” Randhawa says. “If it’s easy to sign up, it should be just as easy to stop or adjust their subscription.” More than two-thirds of consumers who canceled their subscription say they likely would have continued it if they’d been offered lower pricing as an incentive, according to a 2025 survey by Mastercard and FT Strategies, and nearly half said they would have downgraded to a more basic or lower-cost option.

“Consumers don’t want to deal with friction. So, when deciding whether to argue with a business to have a subscription canceled or simply dispute the charge with their credit card company, the chargeback wins every time,” says Scott E. Adams, Fraud Deflect’s CEO.

Along with making subscriptions easier to cancel, Fraud Deflect gives consumers greater visibility into the subscription itself. For example, if a consumer sees a subscription charge on their statement that they don’t recognize, they can select it to get more information. When they do, maybe they’ll realize that the charge wasn’t fraudulent, because it’s tied to an online game their child plays.

“If the charge still doesn’t look right, the consumer can ask to cancel the subscription. The platform routes the request to the merchant automatically,” Adams says, avoiding the need for a dispute or chargeback. “This allows us to protect customer experiences and save sales that would otherwise be lost to the friction of the traditional dispute process."

Randhawa says Fraud Deflect also helps merchants manage the current consumer trend of “snacking subscriptions,” where people don’t feel like they need to subscribe to something all the time. For example, a viewer may have signed up for HBO when the “The Pitt” debuted but plans to cancel once the season wraps. If given the option, many might prefer to pause their subscription for a few months, then return once the next season comes out.

More options for consumers to adjust their subscription plans are coming soon. Future features will allow merchants to offer alternatives like discounts, options to switch to lower priced plans and the ability to put subscriptions on pause for a period of time, Adams said.

Ethoca’s Smart Subscription solution is arriving just as governments around the world are starting to enforce “click-to-cancel” legislation, which would require merchants to make canceling a subscription as easy as signing up for one. “It’s no longer a choice for us as a network to provide a solution,” Randhawa says, “and it is absolutely needed, but we are being very thoughtful about how we want to do it.”