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Compliance with California Automatic Renewal Law (ARL)

The Automatic Renewal Law (ARL) in California is designed to ensure transparency and fairness in subscription-based services. First enacted in 2010 and updated over the years, the ARL requires businesses to clearly disclose subscription terms, obtain affirmative consent, send renewal notices, and make cancellation easy especially for online subscriptions.

With new amendments to the ARL taking effect on July 1, 2025, Loop has rolled out platform updates to help you stay compliant while offering your customers a frictionless subscription experience. Loop Subscriptions always respects and recognizes the merchant's priorities of being legally compliant with any new law introductions or amendments to the existing ones.

Understanding the law

The Automatic Renewal Law's (ARL) main goal is to encourage honesty and openness in business dealings involving subscription-based purchasing. In the US, a number of states have already passed or are presently drafting ARL regulations. In simple terms, the ARL update is designed to protect California consumers, and if your business sells to customers in California, the ARL applies to you.

The law requires businesses offering automatic renewal or continuous service to:

Present clear and conspicuous terms before checkout
Obtain the customer’s express affirmative consent before charging them
Send post-purchase confirmations with subscription terms
Provide easy cancellation options in the same medium used to sign up
Notify customers before price increases, end of free/discounted trials, or annual renewals

Disclaimer: The information in this manual is not intended to be legal advice and is not intended to be taken as such; rather, it is presented for general informative purposes only. Readers of this manual should speak with their attorney for guidance on any specific legal issue.

How is Loop helping the merchants stay compliant?

Loop is committed to keeping our platform up to date with ARL guidelines. Here's what we've implemented to help your brand meet the latest legal requirements.

Enable California ARL compliant Cancellation Flow

To help merchants comply with California’s updated ARL, including the new Click-to-Cancel amendment, Loop now offers a no-code, one-click compliance with California ARL. Located under Cancellation Flows > Preferences, this setting ensures that customers in California are not mandated to complete cancellation surveys before cancelling. A “Cancel subscription” button is shown prominently in the customer portal for California-based subscribers.

Configure California specific cancellation offers

You can still show retention offers or benefits but they are optional, as the law intends. Choose which offers are shown to users in California by going into offer details and selecting "Available for customers in California" in the Availability section.

If California-specific offers are enabled, users first see the Offer Page with a prominent “Cancel Subscription” button. If no offers are configured, they’re taken to the Benefits Page (if enabled). If that’s also not set up, they see the Cancellation Reason step (if active). If none of these are configured, users are taken straight to the final Confirmation screen where they can cancel immediately, with no friction.

Here's a detailed guide to understand how Loop cancellation flows work.

Note: This flow applies only to subscribers located in California, determined by their shipping address.

Cancellation permissions

As per updated ARL laws, customers should always be allowed to cancel their subscriptions via the customer portal. Currently, we provide two options on the Loop admin portal.

Allow customers to cancel subscriptions (Recommended)
Show cancellation instructions to the customer

Note: If you want to choose the second option, then you would be required to "Accept legal responsibility” before changing from the recommended option.

Minimum charge cancellation

As per California ARL laws, customers should be allowed to cancel without any restriction of minimum orders added. 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.

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.

Here are some related articles that may offer additional insight and context.

Need help?

No worries - we're here for you!

If you have any questions or need assistance, feel free to email us at support@loopwork.co or chat with us using the support beacon at the bottom right of your screen.

Regards,

Loop Subscriptions Team 🙂

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Updated on: 14/07/2025

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