California Automatic Renewal Law Compliance

Legal Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult with qualified legal counsel to ensure your subscription practices comply with all applicable laws.

Overview

If your store sells subscriptions to customers in California, you must comply with the California Automatic Renewal Law (ARL) (Business & Professions Code §§ 17600-17606). This law applies to any contract with a California resident, regardless of where your business is located.

The law was significantly updated in 2024 (Assembly Bill 2863), with key provisions effective July 1, 2025.

What California Law Requires

1. Clear and Conspicuous Pre-Purchase Disclosures

California Business & Professions Code Section 17602(a)(1) requires that before a subscription is fulfilled, you must present the automatic renewal terms in a clear and conspicuous manner and in visual proximity to the request for consent.

What This Means:

Display all subscription terms before the customer completes their purchase
Place terms near the checkout button or subscription request
Make terms impossible to miss (not buried in fine print)

The Law Requires You to Disclose:

Required Information	What to Tell the Customer
Auto-renewal statement	"This subscription will continue until you cancel"
Cancellation policy	How they can cancel the subscription
Recurring charges	The amount and frequency (e.g., "$29.99 monthly")
Price changes	If amount may change, disclose that and the new amount if known
Subscription length	Length of term OR that it's continuous
Minimum purchase obligation	Any required minimum commitment
Free trial terms	If applicable, the price after trial ends

"Clear and Conspicuous" Formatting (Section 17601(a)(3)): The disclosure must be:

In larger type than surrounding text, OR
In contrasting type, font, or color, OR
Set off by symbols or marks that call attention to the language

2. Affirmative Consent to Automatic Renewal Terms

Section 17602(a)(2), (4), and (5) require:

You cannot charge the customer's card without first obtaining their affirmative consent to the agreement containing the auto-renewal terms
The consent must be the customer's "express affirmative consent"
The consent must be separate from any other portion of the contract
You cannot include any information that interferes with or undermines the customer's ability to provide consent

Note: While the statute does not explicitly mandate a checkbox, an unchecked checkbox requiring customer action is the industry standard and safest method to demonstrate "express affirmative consent" that is "separate from the contract."

3. Post-Transaction Acknowledgment

Section 17602(a)(3) requires that after the customer enrolls, you provide an acknowledgment that includes:

The automatic renewal offer terms
The cancellation policy
Information regarding how to cancel (in a manner capable of being retained by the consumer)
If the offer includes a free gift or trial: how to cancel before being charged

What to Send: Send written acknowledgment immediately after purchase (email is standard). This must be information the customer can save for their records.

4. Notice Before Confirming Billing Information

Section 17602(a)(8) requires a notice before confirming billing information that states:

That the subscription will automatically renew unless cancelled
The length and any additional terms of the renewal period
The amount or range of costs the consumer will be charged
One or more methods by which the consumer can cancel
If electronic, include a link to cancellation process or other electronic method
Contact information for the business

When This Applies (Section 17602(b)):

Subscription Type	Notice Timing
Free gift/trial lasting more than 31 days	3–21 days before expiration
Promotional/discounted price lasting more than 31 days	3–21 days before expiration
Initial term of one year or longer	15–45 days before renewal

Exemption: If the consumer did not enter into the contract electronically AND you have not collected a valid email address or phone number, the 3-21 day notice requirement does not apply.

5. Easy Cancellation Mechanisms

Section 17602(c), (d), and (f) establish cancellation requirements:

Required Cancellation Methods (Section 17602(c)): Provide at least one of the following:

Toll-free telephone number
Email address
Postal address (if you directly bill the consumer)
Another cost-effective, timely, and easy-to-use mechanism

Online Cancellation (Section 17602(d)): If the customer signed up online, you must allow them to cancel online:

Provide a prominently located direct link or button in their account/profile/settings
OR provide an immediately accessible termination email they can send
Cancellation must be available "at will" without steps that obstruct or delay
You may require login/authentication if they have an account

Same Medium Requirement (Section 17602(f)): Cancellation must be available in the same medium used for signup:

Online signup → Online cancellation
Phone signup → Phone cancellation (display number on your website)
Mail/email signup → Mail/email cancellation

6. Retention Offers Must Not Obstruct Cancellation

Section 17602(e) allows you to present discount offers or retention benefits, BUT:

For Online Cancellation:

You may display a discounted offer
BUT you must simultaneously display a prominently located "click to cancel" button
If the consumer clicks "click to cancel," you must promptly process the cancellation
No obstruction or delay allowed

For Phone Cancellation:

You may present a discounted offer
BUT first you must clearly inform them they can complete cancellation by saying "cancel"
If they state intent to cancel, you must promptly process it
No further obstruction allowed

7. Material Changes and Fee Change Notices

Section 17602(g) requires notice before changes:

Material Changes (Section 17602(g)(1)): Provide clear and conspicuous notice of material changes, plus information on how to cancel (in a retainable format).

Fee Changes (Section 17602(g)(2)): Provide notice 7-30 days before the fee change takes effect, including:

Clear notice of the fee change
Information on how to cancel (in a retainable format)

8. Annual Reminders

Section 17602(h) requires annual reminders for annual subscriptions:

Send once per year in the same medium used for signup (or medium customer is accustomed to):

Originally online → Email or online reminder
Originally by phone/mail → Phone, mail, or internet-based communication

Reminder Must Include:

The product or service to which the subscription applies
The frequency and amount of charges
The means to cancel

9. Recordkeeping Requirements

Section 17602(a)(6) requires you to:

Maintain verification of the consumer's affirmative consent for at least:

Three years, OR
One year after the contract is terminated
Whichever period is longer

What to Retain:

Proof of consent (timestamp, checkbox selection, etc.)
Copy of terms consumer agreed to
Any other verification of affirmative consent

10. Unconditional Gift Provision

Section 17603 states:

If you send goods or provide services under an automatic renewal without first obtaining the consumer's affirmative consent as described in Section 17602, those goods/services "shall for all purposes be deemed an unconditional gift to the consumer."

What This Means:

The customer keeps the products/services without obligation
You cannot charge for them
You may be required to refund all amounts paid
Customer has no responsibility to return items or pay shipping

Important Considerations

Who Must Comply: The California ARL applies to any business selling subscriptions to California residents, regardless of where the business is located. Your business could be in Florida, New York, or overseas—if you have California customers, these rules apply.

Other Jurisdictions: Several other states have similar automatic renewal laws, including New York, Vermont, North Dakota, Oregon, and Illinois. The practices that make you compliant in California will likely help you comply with other state laws.

Federal Regulations: The FTC enforces subscription practices under the Restore Online Shoppers' Confidence Act (ROSCA) and the FTC Act. The FTC can pursue enforcement for deceptive subscription practices, including hidden terms, lack of consent, and difficult cancellation processes.

Additional Resources

Reminder: This guide provides general information and is not legal advice. Please consult your legal team to ensure compliance.