Content Warning / Educational Disclaimer: This article post contains sensitive topics and reflects Open College UK Limited’s opinions for informational purposes only.

With Sarcasm  – No well-known multimillion pound corporate companies were mentioned or hurt in the making of this article!

In a nutshell:

Let’s take for example one of the most well-known antivirus companies similar to many other antivirus firms use what’s called auto renewal traps. These deliberately and purposefully hook users with a low first year price of say £24.99 or £29.99 then discreetly and quietly hike the renewal to a much higher fee of £79.00 per year.

If during this period you decide to cancel for any reason they magically offer you the original low price again of £24.99 or £29.99 proving again and again the higher price was just a money grab aimed at unaware customers.

This practise is common and rife in the UK!

And even though it is not illegal it is definitely ethically shady!

Why they do it and why they get away with it?

Most users will forget to cancel the auto renewal.

Many users don’t check their billing amount.

It’s legally and technically disclosed in their fine print.

Most people never read terms and conditions on the basis that they know that they do have legal rights if push comes to shove.

The United Kingdom’s competition and markets authority has frequently warned corporate companies about this but regulation is slow, very slow but it is coming.

The bottom line is you’re not imagining things, its manipulative pricing psychology at its best and most of these companies know this.

Your rights include your freedom to cancel these renewal subscriptions and rebuy it at the original or lower discounted rate. They are banking on you not doing exactly that.

And as you get closer to the renewal date they often send out reminders one or two a week.

This tactic is especially common in sectors such as antivirus software, smartphone contracts, broadband, media streaming, and other subscription-based services.

There are many corporate companies from antivirus software to media streaming including cloud storage and fitness apps to name a few that operate on a subscription model and it is a play on your psychology because the chances are you’ll shrug your shoulders and just let it happen or you’ll overlook it or you’re distracted. It works for the companies and runs into the millions of profits for them.

Convenance!

On the surface it appears to be a convenient arrangement making life easier for you and if you ask in so many words that’s exactly what you’ll be presented with, the subscription model is to make life easier for you.

A small monthly or yearly fee in exchange for uninterrupted continuous access to a product or service that always works in your favour so it appears, not!

Lurking beneath this ease of yearly is a turning wheel of psychological manipulation, designed to extract more money from you through supple email prompts, supple pressure, loyalty penalties and clever confusion and deliberate misdirection.

Welcome to the world of ongoing manipulative pricing psychology where the price you pay often has much less to do with the product value and more to do with how well your being trained!

The hook

The introductory pricing and the first-year trap are one of the commonest tricks in introductory first year offers where companies will reel you in with their fishing reel with a deeply discounted first year subscription fee that you absolutely can’t ignore because you’ve already seen the higher rates elsewhere and now, you’re magnetically attracted to this purchase or they may use some other psychologically pleasing numbers to catch your attention!

They will advertise the product or the service with glowing phrases like limited time offer only, when it’s gone it’s gone.

Or save 70% today, sign up now, deliberately evoking urgency and scarcity to push for your immediate action. And you know it works because you have fallen for it.

There’s that sense that if you don’t buy this now especially that you’ve seen these prices much higher elsewhere, you’ll lose it and the truth is you probably will if you don’t act upon it.

The catch?

Discounts almost always applies only for the first year and it will be in the fine print or buried in the terms of conditions and be quietly stated that the renewal rate will jump or leap up often to double or triple the original price if you don’t cancel it. Therefore, the onus is on you to not be ignorant and take this for granted.

There is a term called psychological inertia which means that once you’ve subscribed to this company you and others won’t notice or act on the renewal notifications as life is extremely busy, you’re stressed and your inbox is always full and these businesses knows this.

These companies depend on, to some extent and rely on your inattention or in other words your forgetfulness. If many thousands of users forget to cancel or notice the jump from £29.99 to £79.99 then this has to be on you for not paying attention and to learn!

Auto renewal convenience

Perhaps this should read Auto Renewal and the Illusion of convenience.

These things are called taglines and they reinforce a false sense of security and convenience. But the real reason for auto renewal it’s simply retention to keep you as their paying customer or repaying customer.

With auto renewal active, companies don’t need to earn your business every year you simply get charged again and again and again often without clear notification or sufficient advance warning.

Sometimes even when they do email you the timing and tone are calculated to reduce the likelihood of your cancellation decision and what’s the result of this, you may end up paying a higher renewal fee for the products you no longer use which you could have gotten for much less by cancelling and resubscribing.

Before your renewal, just pay attention to what you may be able to save if you cancel before the actual cancellation or expiry date and then you may see the same service for much less with the same company.

Milking the faithful

Ironically, you being a committed and or loyal customer will often cost you more money in the end. This is known as the loyalty penalty a practise that is so widespread that even UK regulatory bodies have started to take notice.

Here’s a glimpse at how it works:

New customers are offered rock bottom prices.

Existing customers are quietly rolled into higher priced renewals.

If an existing customer threatens to cancel, they are suddenly offered the lower price again.

This raises an obvious eyebrow, if they can and do offer the lower price to returning customers, why charge more at all?

The answer is simple!

They are testing how passive or informed you are. The more silent and trusting you are the more you’ll pay. It’s not a reward system; it’s an extraction algorithm. And it’s legal because it operates right in your face and just off the radar at the same time.

The psychology behind pricing games

So how do these tactics effectively work?

Loss aversion: The fear of losing a service like an antivirus or mobile protection or smart phone services which you got cheaper than the others remember. This sense or feeling makes people less likely to cancel, even when the price goes up people tend to avoid losses more strongly because there is always a sense of upheaval or inconvenience and faffing about to go with someone else just to save a few pounds.

Anchoring: As stated, showing a high original price for example £79.99 and then slashing it down to £29.99 to create the illusion of a massive reduction value, even when the base value was and is inflated to begin with.

Inertia and forgetfulness: People are naturally forgetful, who isn’t? Companies know that a large percentage of people won’t cancel in time especially with the auto renewal buried in the fine print.

The endowments effect: Once you’ve been using a service for a period of time such as one year you now feel like it’s part of your digital life that’s one less thing for you to be suspicious or distrusting about and to be honest we often do distrust the way companies operate and we usually stick with the companies that don’t mess us about or have looked after us.

Cancelling often means giving up something you’ve owned even if it’s intangible because they’ve been good to you especially compared to other services and companies you have used which have been a pain.

The countdown trap: Only two days left to renew at £29.99 after that it goes right up to £79.99.

These countdowns reappear again and again triggering – especially in some people anxiety, panic and a sense of urgency. It’s often a fake deadline, but the psychological effect is real for many.

What happens when you cancel?

This is where it gets really cheeky and you’re the one being played! Once you cancel, you’ll often receive a flow of increasingly desperate sounding emails with warnings pointing out that your subscription is ending in such and such a period of time and we hate to see you go. Here’s your final chance to renew at 64% off or similar. Once it’s gone it’s gone

The company now offers you the original low price you had all along.

This pricing yoyo is manipulative and it’s not about fair value exchange It’s about pushing, nudging and probing how much they can get away with on the higher price rate for, if not they will settle for less because at the end of the day it’s still all profit it’s just less profit and they still don’t want to lose you, something is still better than nothing.

Are these practises legal?

Yes, for now, they are in the UK at the time of writing in 2025. Protection laws are allowing these tactics only as long as the company’s terms are technically disclosed. But many people argue this is unethical, especially when pricing feels deliberately unclear or hard to challenge.

In 2021 the United Kingdom’s Competition and Markets Authority put their foot down on loyalty penalties in sectors related to broadband, insurance and mobile phone contracts. Subscription software and digital services could be next Especially as public awareness develops.

What can you do?

Take note of what you’re doing or set up reminders to remind you on what you’re doing and always switch off your auto renewal and this will be your safety net, then just watch and see what happens you’ll be reminded to renew and it is then you may receive the lower offer.

Don’t forget to set your calendar reminders a few weeks before your subscription ends so you can recall the decisions you made.

Compare other services and deals out there.

Author’s Note:

Awareness is Your Weapon!

To some extent manipulative pricing psychology around yearly subscriptions isn’t about value it’s about control over you so that you glue to their service by whatever means.

Once you understand the tactics used you gain back your power and control and when you cancel and resubscribe on your terms or walk away entirely you send a message – That smart consumers aren’t PREY!

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