NYC click-to-cancel rule starts: fines of $525 to $3,500, and in-person signups must offer online cancellation
The city rule took effect October 1. The detail most small operators will miss: a gym, salon or car wash that signs members up at the counter must also let them quit by website or email.
New York City's "click to cancel" rule took effect on Thursday, making it a deceptive trade practice for any business to sell an automatically renewing subscription or membership without an easy way out. The city's Department of Consumer and Worker Protection (DCWP) enforces it and has opened an online complaint portal, CNBC reported. City officials say it is the first rule of its kind adopted by a municipality.
Most coverage framed this as a fight with streaming services and gyms. The adopted rule text reaches much further down Main Street than that. It applies to any "plan or arrangement" that renews automatically or continues until the customer cancels, for any goods or services. That covers a salon's monthly blowout club, a car wash's unlimited plan, a coffee shop's subscription, a dog walker on a standing monthly charge and a meal-prep kitchen's weekly box.
The part counter-signup businesses need to read
New York State law already required that cancelling be as easy as signing up. The city rule adds one requirement that changes the front desk at a lot of small businesses: where a customer signed up in person, the business must offer in-person cancellation where practical and "an online mechanism, such as a website or email." A boutique gym that only lets members quit by filling out a form at the desk, or by certified letter, is out of compliance from today.
The rule also requires, among other things:
- Price, billing frequency, the cancellation deadline and how to cancel must be shown clearly before the customer gives consent or card details.
- For free trials longer than a month, a reminder 3 to 21 days before the first charge.
- For plans with an initial term of a year or more that renew for six months or longer, a reminder 15 to 45 days before the cancellation deadline, by text, email or app, as the customer chooses.
- Notice of any price increase 5 business days to 30 days ahead.
- Retention offers are allowed, but only if they do not obstruct or delay the cancellation.
What a violation costs
The penalty schedule DCWP added to its rules sets fines per violation, and on top of that a business found in violation owes back everything it charged after the customer's first attempt to cancel:
| Violation | Civil penalty |
|---|---|
| First | $525 |
| Second | $1,050 |
| Third and later | $3,500 |
Put a number on it for a small gym: a member on a $150 monthly plan who tried to cancel in June and was still being billed in October has been charged $600 since the attempt. If DCWP finds a violation, the gym refunds the $600 and pays a $525 first-offence penalty, $1,125 for one customer. A second case doubles the fine. For a studio with a few hundred members, the cost of an email cancellation inbox is small next to that.
How many businesses this touches
Among addresses listed as New York, NY alone, CheckThisBiz counts 120,033 independent businesses, including 1,879 beauty salons, 1,788 hair salons, 1,212 nail salons and 1,169 barbers, all kinds of shops where memberships and standing appointments are common. Statewide, its counts include 6,326 independent gyms, 20,932 independent salons and 6,538 independent spas. Not all of them sell recurring plans, but those that do and serve city customers now operate under two sets of rules, the state's and the city's. Our salon playbook covers memberships as a revenue line.
Some businesses are exempt: banks, credit unions and other licensed financial institutions, entities regulated by the state Department of Financial Services, licensed alarm operators, service-contract sellers and businesses operating under a municipal franchise, such as cable providers.
What to do this week
If you sell anything that renews, check three things: that your signup page or form states the price, frequency and how to cancel before you take a card; that a customer who joined at the counter can cancel by email or on your website; and that someone actually processes those requests promptly. The federal click-to-cancel rule was struck down by an appeals court in July 2025, and the FTC asked for comment in March on whether to try again, according to CNBC, so the city and state rules are the ones that apply now.
Sources: NYC Department of Consumer and Worker Protection (Notice of Adoption, Click to Cancel rule; nyc.gov Click to Cancel page); CNBC; CheckThisBiz business counts. The gym example is illustrative arithmetic. This is general information, not legal advice.
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