Subscription-based commerce is booming. It’s already worth an estimated $3 billion, and more and more companies, large and small, are developing or adopting subscription-based revenue models in an effort to offer convenience to consumers – and to create a continuous revenue stream for themselves and their investors. Recent success stories in this area include Dollar Shave Club (men’s shaving products), HelloFlo (feminine hygiene products), Lumosity (brain training), Office365 (Microsoft software), BarkBox (dog toys and treats), and Bulu Box (vitamins). When programs such as these involve elements of “automatic renewal,” they are required to comply with relevant state and federal statutes and regulations that companies may not be aware of.
Both federal and state rules can apply to subscription-based businesses.