Subscription businesses in the US must follow state and federal automatic renewal rules (sometimes called ARLs or “negative option” laws) designed to protect consumers. Key obligations include clear disclosures, express informed consent, advance renewal notices, and easy online cancellation. The guidelines below summarize what businesses need to do and how Loop’s platform helps meet these requirements. Key laws include:
FTC Click-to-Cancel Rule – A federal rule mandating one-click cancellation nationwide, effective July 14, 2025 (note: it was recently vacated in court, but similar standards are likely to be enforced).
California ARL (Cal. Civ. Code §§17600–17606) – Updated by Assembly Bill 2863 (effective July 1, 2025) to add click-to-cancel requirements.
New York ARL (N.Y. Gen. Bus. Law §527) – Requires clear disclosure and renewal notices for promotional or trial offers, requires consent for price hikes. (Final amendments took effect November 5, 2025.)
Colorado Online Cancellation Act (SB25-145) – Requires a one-click cancellation link for subscriptions sold online. Effective August 6, 2025 (for consumer subscriptions).
Disclaimer: This contents of this article are general guidelines, not intended to be legal advice and not intended to be taken as such. Brands should consult qualified legal counsel for specific compliance requirements in each jurisdiction.
Pre-purchase disclosures (before checkout)
All laws place a strong emphasis on what customers see before they place an order. The goal is to ensure customers clearly understand they are enrolling in a subscription and are not surprised by future charges.
Before checkout, subscription terms must be presented in a clear and conspicuous manner. This means the information should be easy to notice, easy to understand, and shown before the customer completes their purchase.
Subscription nature: Indicate the product is a subscription that auto-renews.
Billing frequency & price: State how often and how much the customer will be charged.
Trial or promo details: If there’s a trial/introductory offer, specify when it ends and what the regular price will be after.
Cancellation method: Tell customers how to cancel (e.g. via their account page).
Example: On a product page or checkout, you might show: “$20 every 30 days, auto-renews until cancelled. Cancel anytime at any time in your account.” Shopify’s subscription checkout surfaces these terms by default.
These disclosures are typically presented on the product page, cart, or checkout, and should be positioned close to the final purchase action.
Platform responsibility
Pre-purchase disclosures and consent capture occur at checkout and are therefore handled by Shopify. When using Shopify’s subscription checkout, Shopify ensures that subscription items surface the required subscription agreement language and renewal acknowledgment as part of the checkout flow.
Merchants should avoid removing, hiding, or misleading subscription disclosure language at checkout, as this may impact compliance with ARL expectations.
Express informed consent
In addition to disclosures, ARL requires businesses to obtain the customer’s express informed consent before charging for a recurring subscription.
Express informed consent means that the customer:
Actively agrees to the subscription terms
Understands that charges will recur automatically
Is not enrolled through pre-checked boxes or passive acceptance
In practice, this means:
Subscription consent must be affirmative, not implied.
Customers must knowingly opt into a subscription if both one-time and subscription options are offered.
Subscription agreement language must be presented before the order is placed, not after.
Shopify’s checkout enforces this by displaying subscription acknowledgment language when a subscription item is present in the cart. This ensures customers explicitly agree to recurring charges as part of the checkout process.
Loop operates after checkout and does not control pre-purchase disclosures or consent capture. Once a subscription is created through Shopify, Loop ensures that customers can:
Clearly see their subscription details
Manage and cancel subscriptions easily
Receive required renewal and upcoming charge notifications
One-Step Online Cancellation (Click-to-Cancel)
Laws require customers to be able to cancel online as easily as they signed up, not forcing them to call or jump through additional hurdles. Brands must provide a “Cancel Subscription” button or link in the customer portal (same medium they used to subscribe). In practice:
Make the cancel option prominent in the portal (not hidden in menus).
Do not require customers to complete mandatory surveys before cancelling.
Ensure cancellation is immediate (no undisclosed minimum commitments).
Given the evolving landscape, Loop has updated its ARL settings to cover all U.S. states with auto-renewal laws. In Settings > Retain > Cancellation flows, the “United States ARL compliance” preference now replaces the old California-only ARL setting. By default, California and Colorado are enabled (since they already enforce ARL rules); you can enable additional states as needed (but you cannot deselect CA or CO).
Enabling this preference ensures your cancellation flow meets each state’s requirements for easy online cancellation.
When the U.S. ARL preference is active, Loop’s cancellation flow ensures the experience is compliant in the following way:
Show Offers: The subscriber sees any active cancellation offers (retention incentives) first.
Fallback to Benefits: If no offers are set up or applicable, Loop shows the Benefits page (if configured).
Cancellation Reasons: If there’s no Benefits page also, the customer sees the cancellation reasons page.
Direct Cancellation: If no retention steps are enabled, the subscriber goes directly to the final confirmation screen to cancel instantly.
Marking ARL Offers: To target ARL-state customers, edit each cancellation offer and check “Available for U.S. customers under Automatic Renewal Law (ARL)”. Also customize the offer text as needed. Only offers marked this way will be shown to ARL-covered states.
Configure US ARL specific cancellation offers
Choose which offers are shown to users by going into offer details and selecting offer applicability "Available for U.S. customers under Automatic Renewal Law (ARL)".
Make sure you have configured the ARL specific offer body text as well so customers are able to understand the offer benefits.
Learn more: Cancellation flows
This flow applies only to subscribers located in US selected provinces, determined by their shipping address.
Minimum-Charge Cancellation
Do not require customers to complete a set number of charges before cancelling. Both California’s ARL and Colorado’s new law forbid imposing minimum charge requirements as a barrier to cancellation. Loop’s default is “no restrictions,” meaning customers can cancel even after the first payment. (If your store had a minimum-charge rule, you should disable it or ensure customers can still cancel immediately.)
To facilitate this, we have allowed two options for cancellation flows.
Allow customers to cancel even if minimum order criteria are not fulfilled (Recommended).
Show a message to customers about why they cannot cancel their subscription.
In the Loop customer portal, you can configure the text that needs to be shown to the customer in case there is a minimum order condition added to the subscription.
If you want to choose the second option, then you would be required to "Accept legal responsibility” before changing from the recommended option.
Make sure you inform your customers about this cancellation policy beforehand to avoid disputes.
Renewal Notices
For subscriptions with free trials, promotional pricing, or long terms, send reminder emails before the renewal. State laws often require these notices for added transparency. For example:
California: If a subscription auto-renews after a trial or promotional period (especially 31 days–6 months), send a notice 3–21 days before the end. For annual subscriptions (≥180 days), send a reminder 15–45 days in advance.
New York: Similarly requires notices for trial or promo renewals.
Notice content: Each reminder should include the upcoming renewal date, the amount to be charged, and simple instructions or a link for how to cancel
In Loop, we have Upcoming payment notifications
Located under Settings > Notifications > Preferences
For subscriptions that renew less than yearly, you can send the upcoming order notification from 1 to 25 days.
For subscriptions that renew yearly or greater, you can send the upcoming order notification from 15 to 45 days.
Common State Requirements
While specific rules vary by state, many ARL laws share common elements:
Clear Terms & Consent: States like California and New York require that all material subscription terms (price, frequency, auto-renewal, and cancellation procedure) be clearly disclosed before purchase. Explicit agreement to recurring billing is required (no hidden defaults).
Advance Notice: States often mandate a reminder email for trials or long-term plans. For example, California requires annual sub reminders 15–45 days ahead. (New laws in other states may set similar windows.)
Click-to-Cancel: Most ARLs now require an easy online cancel option. For instance, Colorado’s new law (SB25-145) explicitly requires a simple online cancellation for auto-renewal contracts. As a best practice, make cancellation as straightforward as signup.
By enabling Loop’s U.S. ARL compliance and following these guidelines, you can meet the legal obligations in each state where you sell subscriptions.
Compliance Checklist
Display Subscription Terms: Clearly label subscription products and show terms (price, interval, auto-renewal status) at checkout.
Require Active Opt-In: Use unchecked boxes or separate subscription option so customers knowingly consent.
Include Disclosures: At purchase, list billing frequency, total cost, trial period and end-date, and cancellation method.
Send Renewal Emails: Email reminders before renewal for trials/promos. For example, 15–45 days prior for annual renewals.
Enable Easy Cancellation: Ensure the customer portal has a visible “Cancel” button with no required surveys.
Use Loop’s US ARL Setting: Turn on the United States ARL compliance preference and select relevant states. Mark offers “Available for U.S. ARL customers”.
Adhering to these steps and using Loop’s built-in features will help keep your subscription service compliant with automatic renewal laws across the U.S. Always review the specific laws in each jurisdiction and consider consulting legal counsel for detailed guidance.
FAQs
How do I enable United States ARL compliance in my cancellation flow, and how does it work?
How do I enable United States ARL compliance in my cancellation flow, and how does it work?
To ensure your cancellation flow is compliant with United States Automatic Renewal Laws across applicable states, you must enable the United States ARL compliance preference.
To configure this:
Go to Cancellation Flow Preferences
Enable United States ARL compliance
Save the changes
Once enabled:
California and Colorado are selected by default
You can enable additional U.S. states if required
You cannot deselect California and Colorado
To configure compliant retention offers:
Go to Cancellation Offers
In the offer availability section, select Available for U.S. customers under Automatic Renewal Law (ARL)
Configure the offer content
Save the changes
When a customer from a selected ARL state tries to cancel:
They are shown configured offers directly
If no offers are configured, they see the Benefits page
If Benefits are not configured, they see cancellation reasons
If no retention steps are enabled, they are taken directly to the confirmation screen to cancel instantly
This setup ensures customers are not forced through multi-step cancellation surveys and keeps the flow compliant with ARL requirements.
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Loop Subscriptions Team 🙂