Automatic Renewal Laws by State in 2026: What Subscription Merchants Have to Do

The short answer we give subscription merchants: the FTC's click-to-cancel rule is gone. The catch is that the obligations didn't go away with it. ROSCA, Visa and Mastercard rules, and a growing list of state and city laws still govern how you sell automatic renewals, free trials and memberships. Bill cards on a recurring basis? Here's what applies now, and what to fix before a regulator or your bank makes you.

What you have to do now

Automatic renewal laws by state don't match word for word, but they overlap enough that one careful setup covers almost all of them. The same setup covers Visa, Mastercard and federal law. The laws call these "automatic renewal or continuous service" offers. They cover free trials, subscription boxes, supplement autoship, coaching memberships and other negative option programs that keep billing until the customer cancels.

The short version:

• Show the renewal terms (price, how often you bill, when a trial ends, how to cancel) next to the buy button, before you collect card details.
• Use a separate, unchecked consent box for the recurring charge, and keep a record of it for at least three years.
• Send a confirmation email right away with the terms, price, billing schedule and how to cancel.
• Send a reminder 7 days before any free trial turns into a paid subscription. That timing meets both Visa and Mastercard.
• For terms of a year or more, send a reminder 15 to 30 days before renewal, and send everyone an annual reminder.
• Give 7 to 30 days' notice before a price change.
• Make cancelling at least as easy as signing up, in the same place, with a one-click online option. Handle requests within one business day.
• Put "trial" in the card statement descriptor on the first charge after a free trial.

We see the same chain with subscription merchants: a hard-to-cancel plan turns into disputes, disputes into chargebacks, and chargebacks into monitoring programs, reserves or a closed merchant account. The rest of this article goes through each rule so you can fix your flow before that happens.

Federal rules after the click-to-cancel rule was struck down

On July 8, 2025, the Eighth Circuit vacated the Federal Trade Commission's amended Negative Option Rule, better known as click-to-cancel, in Custom Communications, Inc. v. FTC. That was six days before the July 14, 2025 compliance date. The court ruled on procedure: the FTC had skipped a required preliminary regulatory analysis.

There is no federal click-to-cancel rule in force today. The FTC restarted rulemaking with an advance notice published March 13, 2026, and comments closed April 13, 2026. No proposed rule has been issued.

Federal law still applies:

• ROSCA requires clear disclosure of all material terms before you collect the consumer's billing information, the customer's express informed consent, and a simple way to stop recurring charges.
• Section 5 of the FTC Act prohibits unfair or deceptive practices, including hiding the cancel path or the renewal terms.

On September 25, 2025, the FTC settled with Amazon over Prime sign-up and cancellation for $2.5 billion: a $1 billion civil penalty and $1.5 billion in refunds. The rule is gone, but FTC enforcement is not.

State and city automatic renewal laws that changed in 2025 and 2026

With no federal rule, most of the new requirements come from states and cities. These are the ones that took effect in 2025 and 2026, or will by early 2027.

Every law comes down to four things: terms before purchase, separate consent, reminders, and cancellation as easy as sign-up. The states differ mostly on reminder timing and on whether save offers are allowed. States also define phrases like "clear and conspicuous" in slightly different ways, so check the details with counsel. This isn't legal advice.

New York City's rule applies even if you're not in New York

New York City's rule starts October 1, 2026. It covers automatic-renewal and continuous-service subscriptions sold to NYC consumers, wherever your business is. If you sell online, you very likely have customers in New York City.

What it requires:

• Key terms right next to a separate affirmative consent, such as an unchecked box that says the plan renews and bills until cancelled.
• Cancellation at least as easy as sign-up through every channel customers used to enroll, plus online if they signed up in person.
• No obstructing cancellation: no hidden links or dead-end menus.
• Advance notice before renewals, price changes and free-trial conversions.

Penalties are $525 for a first violation, $1,050 for a second, and $3,500 for each one after that, plus restitution. Across a subscriber base, those add up. We tell merchants to start with NYC's rule and California's, because a flow that meets both is in good shape almost everywhere else.

Visa and Mastercard rules for free trials and subscriptions

The card networks have their own rules, and they apply no matter where your customer lives. Break them, and you lose the dispute.

Visa (since April 18, 2020), for free trials and intro offers that turn into subscriptions:

• Express consent at enrollment.
• An electronic copy of the terms: price, billing frequency, how to cancel.
• A reminder with an online cancellation link at least 7 days before the first paid charge.
• Receipts that show the trial length, amounts, dates and a cancellation link.
• "Trial" in the card statement descriptor on the first charge after the trial.
• Online cancellation.

Mastercard (since March 22 and September 22, 2022):

• Price and billing frequency shown at the point of payment.
• The customer actively accepts the subscription.
• An immediate confirmation that includes how to cancel.
• A reminder 3 to 7 days before a trial converts.
• For plans billed 6 months or more apart, a reminder 3 to 7 days before each charge.
• Online cancellation.
• Merchants offering physical-goods trials must use MCC 5968 and be registered.

Visa handles "Cancelled Recurring Transaction" disputes under reason code 13.2. If you skipped the reminder or buried the cancel link, you'll have a hard time winning them. More on Visa chargeback rules for high-risk merchants.

How cancellation flows turn into chargebacks

If a customer can't find the cancel button, they call their bank. That's a chargeback, and it counts against you whether or not the charge was technically allowed.

Enough "cancelled recurring" disputes can:

• push you past card network thresholds, including Visa's VAMP program
• get your account flagged by your bank for monitoring
• lead your processor to raise your rates, hold a reserve, or close the account

When we look at subscription chargebacks, we can usually trace them to one of the rules above. Most could have been avoided with better communication with the customer. No reminder, and customers forget they signed up. No easy cancel, and they go to their bank instead. A missing consent record means you have nothing to send back when you fight the dispute.

What cuts disputes:

• Plain renewal terms next to the buy button and the consent box.
• A cancellation process that takes one or two clicks from the customer account page or a link in your emails.
• Reminders before trial conversions and annual renewals.
• An immediate cancellation confirmation, with billing stopped the same or next business day.

Adaptiv's chargeback prevention tools help you catch disputes early and see why customers are filing them.

One checklist for federal, state and card network rules

Each item is the strictest version of the rule. Check your specific situation with counsel.

• Disclose before checkout. Price, billing frequency, when a trial ends, the cancellation deadline and how to cancel, next to the buy button and before you collect card details.
• Get separate consent. An unchecked box that refers to the recurring charge. Keep the consent record for at least 3 years (California's standard).
• Confirm right away. An email with the terms, billing schedule, price and step-by-step cancellation instructions.
• Remind before trials convert. Seven days before the first paid charge, with an online cancel link. Visa wants at least 7 days and Mastercard 3 to 7, so 7 meets both.
• Remind before renewals. 15 to 30 days before renewal for terms of a year or more, plus an annual reminder for every auto-renewing plan.
• Give notice of price changes. 7 to 30 days ahead. In New York State, get consent to the increase or let the customer cancel within 14 days of the first higher charge with a prorated refund.
• Make cancelling easy. One-click online cancellation in the same medium as sign-up, a free phone line during business hours, and every request (including voicemail and email) handled within one business day, which is Connecticut's rule for voicemail and a safe standard everywhere.
• Keep save offers simple. One offer at most, with the cancel button visible the whole time.
• Label the first post-trial charge. Put "trial" in the descriptor.

How Adaptiv works with subscription merchants

Subscription businesses in higher-risk categories, like supplements, nutraceuticals, coaching and memberships, get extra scrutiny from banks and card networks. A clean cancellation flow keeps disputes down, but you also need a processor that approves subscription businesses, and that's what we do.

• Merchant accounts for subscription businesses, with recurring billing
• Chargeback and fraud tools
• Apply in about 60 seconds, with no setup fees
• Next-day funding

FAQ

Next steps

Review your checkout page, confirmation emails, reminders and cancel flow against the checklist above, and ask counsel about the states you sell into. Then apply for a subscription merchant account with Adaptiv Payments. It takes about 60 seconds, there are no setup fees, and approved merchants get next-day funding.

This article is for general information and isn't legal advice.