There are many legal requirements that businesses in Germany that offer goods or services online need to comply with. § 312j.3 of the German Civil Code (BGB), for instance, stipulates that order-confirmation controls must be clearly legible and labeled with precise wording, such as “Order and pay.” The opposite of that is the cancel button, which is also subject to explicit rules.

This article will explain what a cancel button is and the statutory criteria it has to meet. We’ll also outline how to meet the country’s legal requirement to provide this option, as well as ways to minimize churn where termination is possible.

What’s in this article?

• What is a cancel button?
  
• What are the legal requirements for a cancel button?
  
• Ensuring compliance when integrating a cancel button
  
• Minimizing churn when cancellations are possible
  

What is a cancel button?

A cancel button is an element of a website or app that gives consumers a simple, digital way to directly end contracts concluded electronically for the performance of a long-term obligation. These agreements generally cover recurring payments—e.g., subscription, membership, or contract fees.

The button lets you terminate these arrangements quickly and easily. It reduces the effort required to end a contract, making termination just as straightforward as entering into one. Importantly, cancel options are not limited to online agreements. If a business presents a contract both on the web and offline, it must also allow people to end it online, regardless of where the commitment began.

If conducting business in Germany, you have to provide a cancel button if products or services that usually require repeat charges are offered. Typical examples include subscriptions for streaming platforms, newspapers and magazines, software, household goods, or similar subscription commerce models. It’s worth noting, however, that cancel buttons are only mandatory in the business-to-consumer (B2C) sector. This does not apply to agreements between businesses.

Cancel buttons are not mandatory when a contract requires a special written form, such as a consumer loan agreement. You also don’t need to include a cancellation button when the parties have agreed to the contractual service in advance. That category covers installment-shipment arrangements where the parties define the full scope of delivery at the outset.

What are the legal requirements for a cancel button?

The legal basis for the cancel button is § 312k of the BGB. This paragraph came into effect on July 1, 2022, to improve consumer protection in digital commerce and to make it easier to terminate contracts for the performance of ongoing obligations. In the past, lengthy and complicated cancellation processes often discouraged those from ending agreements they no longer wanted. This frequently resulted in undesired renewals and repeat charges. The introduction of the paragraph on “Terminating consumer contracts in electronic commerce” stops automatic renewals from being misused and makes these processes more user-friendly.

§ 312k of the BGB contains several specific rules on the cancel button, primarily regarding its design and placement, as well as the way people are able to end their agreements. Here is an overview of the most foundational statutory requirements:

Clear placement

The button must be highly visible on the webpage or in the app. The law requires it to be always available and simple to access. Ideally, the cancel button and the legal notice need to be accessible from every subpage of a website. It is also acceptable to place it in the user profile or another location that is equally clear to find. Businesses that fail to integrate one or “hide” it on their site could find themselves in hot water.

Clear labeling

It has to be obvious which control functions the “Cancel” button. The label needs to be legible and must indicate unambiguously that its function is to end the agreement. The law permits wording such as “Cancel now,” “Cancel contract,” or “End subscription.”

Redirect to the confirmation page

After a person clicks cancel, the site must redirect them to a confirmation screen where they enter the relevant contract details and confirm termination. Additional obstacles, for example resubmissions, phone confirmations, or callbacks, are not allowed to overcomplicate the cancellation process. Consumers have to be able to complete the termination directly and without unnecessary delays.

Proof of cancellation

Once individuals confirm the cancellation, they must be able to save proof on a permanent data carrier. For instance, a downloadable PDF is suitable. The company’s confirmation has to state the exact date and time the cancellation occurred, providing consumers with clear evidence that they pressed the cancel button and showing when the withdrawal took effect. If no specific end date for the agreement is provided, the termination then takes effect at the earliest possible time.

Consequences of noncompliance

If the cancel button or confirmation step fails to meet the legal requirements, individuals might end the contract at any time without giving a reason. This applies regardless of other revocation rights, such as the option of extraordinary termination. In addition, businesses that fail to comply with the rules of § 312k of the BGB can expect to receive formal warnings from consumer protection agencies or competitors about their anticompetitive conduct.

Ensuring compliance when integrating a cancel button

Companies in Germany looking to integrate a cancel button into their website or app have to follow the rules set out in § 312k of the BGB. In short, the button must:

• Remain available at all times and be convenient to access
  
• Be clearly legible and labeled with precise wording, such as “Cancel now”
  
• Send the individual directly to a confirmation step
  

Data protection

Handling a notice of cancellation involves processing personally identifiable information. Companies therefore have to ensure compliance with the General Data Protection Regulation (GDPR). One of the most important obligations is the duty to provide information to consumers. Businesses must explain how they handle personal data, what purpose it serves, and for how long it is stored. For this reason, a transparent privacy policy is necessary.

Companies also have to comply with the principles for processing personally identifiable information and certify that any transmitted data remain confidential. This relates, in particular, to securely transferring and storing cancellation records on servers. That creates an encryption key to protect data against unauthorized access.

Minimizing churn when cancellations are possible

The cancel button gives consumers a quick and straightforward way to end contracts. Businesses that are required to provide this element must in turn develop strategies to minimize churn. Here are a few ways you can do this:

Offers and discounts

When customers use the cancel button, you can present an automated retention offer on the confirmation step, whether a discount, a price adjustment, or added perks. A computerized system then delivers a tailored incentive designed to maintain the agreement in place. A price reduction for the next three months, for example, or the addition of expanded features encourages subscribers to keep their contract. These offers must be transparent and clear for people to understand.

Flexible pricing

Flexible pricing increases the chances of retaining customers over an extended period. This is where Stripe Billing can help, giving you complete control over how you invoice your clients—from simple recurring billing, to usage-based models as well as special, negotiated contracts. With flexible fee structures, you can respond to changes in customer needs more quickly and reduce the risk of agreements ending prematurely. Stripe Billing further makes it straightforward to integrate coupons, discounts, and add-ons.

Avoid accidental cancellations

A customer might end a subscription by mistake, such as by accidentally clicking the cancel button or confusing it with another element. Accidental cancellations are easier to prevent by adding a clear security question to the confirmation page. Ask your customer to confirm whether they really want to end their contract. This prompt helps avoid misunderstandings and allows individuals to review the decision before completing termination.