What Are SaaS Billing Dark Patterns and How to Avoid Them in Your Product Design
SaaS billing dark patterns are like the proverbial quick fix: instant results that don’t last and don’t solve the underlying problems.
Some companies intentionally use them for quick gains. But the worst part is many SaaS providers use these design patterns without knowing the negative long-term impact on their business.
Whichever side of the spectrum you fall, this article will show you common SaaS billing dark patterns and how to avoid them through proper communication.
- A dark pattern is a deceptive UI/UX design carefully crafted to mislead users into decisions they might otherwise not make.
- SaaS companies use dark patterns to increase revenue and drive growth faster. Companies that engage in these practices often do it without considering the customer’s needs.
- Most SaaS billing dark patterns aren’t illegal, but they’re unethical and won’t drive sustainable growth.
Types of SaaS billing dark patterns:
- Trick questions that appear to say one thing but mean another. This UX pattern is often used on forms.
- Roach motel: This design makes it easy to take specific actions (e.g premium subscription) but makes it hard to pull out–you often won’t find the option in your account settings.
- Hidden costs: They don’t tell you everything until you reach the checkout page.
- Bait and switch: This happens when you set out to perform specific actions but get entirely different and unwanted outcomes.
- Confirmshaming: Clever copywriting to shame users into making decisions.
- Forced continuity: This common dark pattern involves charging users without prior notice. It’s to make them continue using your service and mostly employed after free trials.
Popular SaaS billing dark patterns:
- Not notifying users when the free trial ends and automatically charging the user’s car with no notification.
- Auto-renewing monthly subscriptions without telling users.
- Shady credit authorization.
- Charging customers for features and services they don’t use.
How to avoid these dark patterns:
- Preventing customers from wasting money starts with paying attention to them. Reach out to your customers when you realize they are underutilizing your tool.
- Provide assistance to help them if it’s because they’re finding some features hard to use. But suggest a downgrade when they truly don’t need those features or require fewer user seats than they initially signed up for.
- New SaaS billing dark patterns will keep popping up as technology grows. When unsure whether a practice is appropriate, put yourself in the customer’s shoes, and always make the design decisions that favor your customers.
What is a dark pattern?
Dark patterns are deceptive UI/UX designs carefully crafted to mislead users into decisions they might otherwise not make.
Every internet user has experienced dark patterns at different levels.
Common examples include misdirection when you click links, hidden costs, difficulty canceling subscriptions, etc. Dark patterns have a variety of applications, but our focus is SaaS billing dark practices.
Why and how do SaaS companies use dark patterns?
SaaS companies use dark patterns to increase revenue and drive growth faster.
Companies that engage in these practices often do it without considering the customer’s needs.
How do they do it?
The most important part is keeping their acts as surreptitious as possible so the customer doesn’t notice it.
Should you use SaaS billing dark patterns?
Companies that use dark billing patterns are smart; they won’t do anything that can make you drag them to court and win.
But of course, legal doesn’t always mean ethical.
All dark patterns are unethical and selfishly shift focus from the customer. The company involved may gain temporarily but risk being on the customer’s bad side.
And you know what that means in our user-centric age. A bitter tweet or negative review from an angry user is all that’s needed to tarnish your reputation and discourage prospects.
The trade-off isn’t worth it in the long run.
So it’s always best to be honest with your customers and use ethical practices. Focus on creating transparency with users instead of manipulating them.
Types of dark patterns
We’ve touched a bit on some dark pattern examples, but this section categorizes them so you can easily spot one when you see it.
Trick questions and fine print
These are often used on forms designed to trick you into giving an answer you didn’t intend.
Upon quick glance, the question appears to ask one thing, but when read carefully, it asks another thing entirely. Companies use this method because they know many readers will only scan through the text and not read it properly.
The misleading text is made in the header and bolded (as in the image below) and the rest is usually in the fine print.
This approach gets users into a situation very easily and makes it hard to get out. A common example is when SaaS companies make it extremely easy to upgrade but difficult to downgrade or cancel a plan.
They’ll ask you to send an email or make a call just to cancel.
And that’s where the friction begins. Either your emails don’t get to the “right person” in time, or you call in and a salesperson does all they can to retain you.
You get on a website, review their product, and decide it’s what your team needs. The pricing appears affordable too.
Only for you to reach the checkout page and realize there are additional charges that weren’t publicly displayed. But now you’ve gotten so invested in the software that you consider paying the extra costs. Mission accomplished.
Bait and switch
Bait and switch happen when you set out to perform specific actions but get entirely different and unwanted outcomes.
Have you been to a website and a free offer suddenly pops up, then the cancel button says something like:
“No, I don’t want customers,” or
“No, I don’t care about people dying”?
That’s a dark pattern. The company wants to shame you into taking actions that will benefit them.
This dark pattern happens when companies charge your credit card after your trial period without notifying you. It’s even worse when they make it difficult to opt-out.
Part of making this tactic work is doing everything to ensure customers take your free trial.
Coursera has a free version that allows users to learn without getting certificates.
But the company hides this feature deep in the website, making it almost impossible to figure out unless someone tells you or you spend time navigating. Most new users don’t know this option exists, so they input their card details and take the 7-day free trial instead.
The free version is buried in the “audit” section. How many users will think about that?
What are the most common SaaS billing dark patterns and how to avoid them?
Every good-intentioned SaaS company must make conscious efforts to avoid dark patterns.
There are always better ways to drive sustainable growth, which we’ll discuss in this section. We’ll first outline a dark pattern, then show you how to avoid it.
Not notifying users when the free trial converts to paid
We’ve over-flogged this point, so let’s jump to how to avoid it in your product design.
If possible, don’t ask for a credit card in the first place like Sleeknote does:
And even if you do, always be proactive and transparent in your communications. Let users know when their free trial period ends so they can make an informed choice.
But also send emails so users will still see it even if they were inactive on the app.
Your messaging should be detailed. Tell users when their trial is ending and what they stand to lose if they don’t upgrade. Also, make payment easy for users that may be interested in upgrading.
Here’s a good example from Loom:
Auto-renewing monthly subscriptions without telling users
This is most common among customers that choose the monthly payment plan. Some of these customers only signed up to use the tool for a month or two, then forgot to cancel their subscriptions.
SaaS companies take advantage of this to consistently bill such users.
Of course, there are SaaS merchants that don’t do this intentionally. Their billing system is automated, so they don’t exactly know which customer accounts are active or not. It, however, doesn’t make it less offensive to customers.
How to avoid it?
Send reminders to all customers before the next billing cycle and make it easy to cancel the renewal.
Zoom gives a checkbox with an option not to auto-renew.
Surfer gives a heads-up that subscriptions will not be renewed without the user’s request.
Shady Credit Authorization Practices
The practices considered so far aren’t illegal. They’re just unethical, but some SaaS companies go over and beyond to indulge in illegal card authorization.
To illustrate how this works, let’s consider the three steps the average credit card transaction follows:
Step 1: Credit Card Approval
This initial step begins when a customer inputs their card details. The receiving bank gets an authorization request which they immediately submit to the customer’s bank to approve the transaction.
A standard $1 charge is typically implemented and instantly reversed just to confirm the card’s validity.
Step 2: Credit Card Capture and Clearing
Capture and clearing happen after card approval.
This second stage is where the transaction amount is deducted from a customer’s card. The transaction is considered successful after an exchange of funds between the issuing and acquiring banks.
Step 3: Credit Card Payment
This is the final step. The receiving company successfully has the customer’s money deposited in their accounts. Their bank usually charges them—either daily or monthly.
Now, how do SaaS companies get shady?
They do it during the card approval stage. Rather than debit $1 and return it immediately to confirm the card’s status, these companies find a way to charge customers for the paid plans or an upgrade without the customer’s permission.
Imagine you signed up for a free trial with such a SaaS provider and were asked to input your card details. The paid plan goes for $300 a month, and you should only be debited if you’re interested.
What this company will do is deduct the $300 from your account immediately after the standard $1 chargeback during the card approval stage, forcing the paid plan on you.
The ideal situation is to send another authorization request for the $300 and allow you to decide on it.
Charging customers for features and services they don’t use
SaaS waste is so rampant that people make a business out of helping companies reduce it.
This waste happens when you pay for multiple tools that do the same thing, for features you don’t need or continue paying for user seats even after half your team has left.
Preventing customers from wasting money starts with paying attention to them.
Reach out to customers when you realize they are underutilizing your tool. Provide assistance to help them if it’s because they’re finding some features hard to use. But suggest a downgrade when they truly don’t need those features or require fewer user seats than they initially signed up for.
Of course, this will feel like losing opportunities to make money, but consider it from the customer’s angle. Being that generous will get customers excited that you care. Simple acts like this can turn ordinary customers into loyal brand ambassadors.
Dark patterns aren’t always intentional. Some SaaS providers accidentally do stuff that misleads users, but hopefully, this article has shed light on how these practices affect users.
We touched on some sales tactics that are completely natural when you don’t have ulterior motives. For instance, companies collect credit card information before a free trial to get more qualified leads. Continue if your business profits more from that strategy. Just ensure customers aren’t upgraded without their permission.
Another point is having exit friction like requiring phone calls or emails before subscriptions can be canceled. That’s a generally outdated retention method that will infuriate already frustrated customers. You can opt for exit surveys instead.
Lastly, new SaaS billing dark patterns will keep popping up as technology grows. When unsure whether a practice is appropriate, put yourself in the customer’s shoes, and always make the design decisions that favor your customers.
Userpilot can help you prevent or regulate dark patterns by sending personalized in-app messages. Book a demo to learn more.