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Buyer Beware: Netflix Gift Cards and Subscriptions – The Good, the Bad, and the Ugly!
After one of our UCAN staff had a rather disappointing experience with purchasing a Netflix gift card or subscription for a loved one, we looked into the details of Netflix's Terms of Use to determine what restrictions are involved with purchasing gift subscriptions. After reviewing the Terms and contacting Netflix to clarify some details, we found a few things we thought buyers should be aware of. Listen to Carter discuss Netflix on the UCAN.ORG podcast here 
.
But before we get started, I realize some of you Clint Eastwood fans reading this might be thinking to yourselves, "wait a minute, why is ‘The Ugly' first when the title of Clint's greatest flick is ‘The Good, the Bad, and the Ugly," not ‘The Ugly, the Bad, and the [Decently] Good?'" Well, don't fret mon frère, here is your answer: unfortunately, we found more ugly and bad aspects of the Netflix gift card subscription service than good. So, without further ado, here is what we have found:
The Ugly
1. First off, Netflix gift card subscriptions are non-refundable. So, if the recipient of the gift card subscription either cannot or does not want to use the service, you're stuck with it. For options available in such a situation, see "The Bad," below.
2. The ugliest, and seemingly sinister, aspect of Netflix gift card subscriptions is the "opt-out-only" rollover billing. What is this, you ask? Well, when the gift subscription recipient enters a credit card number into the account to activate the gift subscription, the Terms of Use states the gift subscription recipient authorizes Netflix to automatically bill that person for monthly subscription fees and applicable taxes, once the gift subscription period ends, for the cost of the plan associated with the gift subscription, unless the gift recipient opts out prior to the expiration of the gift subscription.
Now, Netflix is obviously hoping users of gift subscriptions will enjoy the service so much they continue on as paid subscribers. But, for all those who are NOT interested in continuing on as paid subscribers, anyone who fails to cancel their service prior to the gift subscription's end will be rolled over into a paying subscription status. So, if recipients of gift subscriptions forget at the end of the gift periods to cancel their accounts, they will be automatically billed for the next month's service.
Depending on the details of when a person receives his credit card statements in the mail and when the paid subscription begins, it's possible for Netflix to get up to two months of billing out of an unknowing subscriber before he realizes (from looking at his first credit card statement received since Netflix started billing him) that he is now a paying subscriber. At this point, unwary subscribers are trapped into paying for either one or two months of service by the fact the Terms of Use clearly states refunds or credits are not available for partially used subscription periods.
How does this affect Netflix? It affects their bottom line, and very handsomely I might add. Just multiply the cost of monthly subscriptions by the number of people you think could end up falling into such a scenario each year (I don't want to speculate, but out of 8.8 million subscribers in 2006, that number could be significant). The result could easily be in the tens or even hundreds of thousands of dollars per year in what essentially amounts to what is in our opinion, unconscionable gains. And so I ask you, are Netflix's policies sinister? Perhaps; but that's up to you to decide. Are they ugly? We think so.
The Bad
3. A gift subscription recipient is required to enter a credit card number in order to activate a gift subscription. Although the credit card protects Netflix's property by enabling it to bill people for lost or damaged DVD's, the reality is that many people either don't have credit cards or aren't willing to give up their credit card info to a company whom they don't really want to use other than for use of the gift subscription.
The [Decently] Good
4. If the recipient wants to use the gift card subscription, but either does not have a credit card or refuses to enter one into the Netflix system, the good news is that gift subscription purchasers, if they choose to do so, may enter their own credit card numbers into gift subscription recipients' accounts. While I certainly do not recommend doing this, unless it's with someone whom you absolutely trust with no reservations (and even then it's not highly recommended), at least it's an available option.
5. But, what happens if you buy a gift subscription for someone whom either cannot or does not want to use the gift, and whom is not willing to enter your credit card info into their Netflix account? If the gift subscription code has not been activated after one year, Netflix will email the purchaser of the gift subscription to let him know the gift code has not yet been activated. And keep in mind that one year from the date of purchase, gift subscription periods begin to run even when gift codes have not been activated. While this specific point should fall within "The Bad," I couldn't separate it at this point from the somewhat surprisingly two fairly good options available to the original purchaser.
The first option is for the original purchaser to activate the gift code himself to apply it to his own account. So, even though it's not refundable, the purchaser can at least get the value out of the gift subscription which was originally purchased for someone else. But if the purchaser is not a Netflix subscriber, he needs to set up a new account to use the gift subscription. Of course, the ugly part of this is that the purchaser will now be subjecting himself to the "opt-out-only" rollover billing practice discussed above.
The second decent option available to the purchaser of the gift subscription is that he can transfer it to someone else. Even though the Terms of Use states gift subscriptions are only transferable one time, this is somewhat misleading. The gift code itself is transferable an unlimited number of times. Netflix does not track, and has no way of tracking, the number of times the un-activated code has been transferred. So if you give me a code, and I don't want it, I can give it to my brother, who can give it to one of his employees, who can give it to her boyfriend. No problem.
However, once a gift code has been activated, regardless of whether it's before or after one year from the date of purchase, the gift subscription itself can only be transferred once. To transfer the gift subscription, you basically have to transfer the entire account over to the new person by changing the name, address, and email account associated with the Netflix account. But the Netflix system will only let this happen once.
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This is a very good article
This is a very good article and very informative. Stop Dealing With Netflix! Here is a very good movie streaming service that only charges a one time payment of 34.95 for 5 whole years! Check it out! http://www.mylegalmoviedownloads.com/001
Netflix
I have used netflix for a year now started with a gift card. I have had no problems what so ever. The hold option with them is awesome. I can hold my account and not be billed when I dont have the money in the bank. They do want credit info but thats incase you keep the dvds they can be reembursed. If you dont want anyone to have access to your credit cards then get a prepaid credit card and register it for online use. That way if anyone gets your number they can only take what you put on there. Limits the crooks. Be smart about any payments made online and protect yourself just like netflix protects itself from theft by requiring the credit card in the first place.
descrepancies in this post
I was a netflix subscriber for 3 years with no problems, THEY DO NOT TAKE PREPAID CREDIT CARDS. After 3 years with no warning or explanation they closed my account when I did call to find you what happened I was informed that their policies had changed and prepaid cards would no longer be accepted as a form of payment. This is also true for Blockbuster KIOSKS, DVD NOW.
Netflix solution
Why bother with accounts, credit cards etc... You can overcome all these impediments by simply purchasing a US valid netflix account at www.cardsbee.us With a VPN installed, you'll have enough for your cash! That's how i've been enjoying Netflix for over a year now. Give it a try. If it worked for me, why not for you?
Vacation hold,no end date and NETFLIX contiuned to charge me
I knew I would not be able to use the service for several months. So a month before my vacation, I notified NETFLIX that I had a vacation hold. And did not enter any restart date. I then had someone play my monthly bills while I was recoverying from major surgery. I later looked over my paid bills and saw NETFLIX continued to bill me anyway for a few months. I notified them an they told me to call my bank since my credit card was not used by me. Hey, it was the card on file with NETFLIX. So Netflix kept charging. Not someone else.
Gift Card issue, lame response
I bought a gift subscription for my brother and he needed to add his credit card to be able to receive a DVD which he did.Of course he knew they would try to keep him as a subscriber so he called to cancel and was told he had but no...He was charged for 4 months as a subscriber and after calling to twice to complain Netflix only refunded him one month. I called to complain because I felt terrible that I bought him this because he didn't have extra cash for this kind of expense and customer service was lame. No apology, just repeated their policy and said he only called too late. I asked for a refund for him but they said their policy is to only refund one month even though they know they were wrong.
I am writing the BBB but would like to know if there are any class action lawsuits currently on file. I think even though they tell gift recipients their gift subscription is almost up it is a total scam to have gift recipients go to what they think is a gift subscription and stop it versus go and start up because they like it. This is bad business and is a ridiculous way to get people tp sign up and they didn't even care that a longtime member complained and will be canceling after this. No customer service, no apologies, just a real lack of integrity and lousy business model that ropes in people by default.
Dont be a nincompope
I think netflix rocks. Maybe they could send the people who use a gift card and email letting them know that they are close to running out of free service.
As far as your gripe that the gift is non refundable. Let the recipients know that its nonrefundable and very expensive. Make sure if they don't use it that they give it to someone who will and pass on the message.
I have gifted the service a few times to family at christmas and they loved it. 1 year 1 at a time is the best give you could ever give someone who loves movies and has the Internet.
credit cards
consumers should be more careful in giving out their credit card info to avoid unwanted transactions made using your credit card by which you are not liable at all. Some other sites that ask for subscription fee usually automatically charge on your credit card.
Movie
I want netflix.
Purchasing Netflix card cards as gifts
I googled Netflix in order to purchase gift cards. This site popped up. Reading about the struggles of others, i've decided to purchase a different gift. I think NetFlixs are a great gift idea but I'm not willing to put my gift list receipts into a situation of providing their credit cards nor being charged after the gift expires without their explicit agreement. Sad
Netflix gift card scam
I wish I'd read this before I gave a couple of Netflix annual subscriptions away last year. It turns out that Netflix duns the people I gave the gifts to for their credit card info, telling them that it's because of problems with my credit card. So, to the recipients of my largesse, it looks like 1) I didn't pay for the service but only signed them up, obligating them to pay. And, 2) I have such bad credit that I couldn't pay for the gifts if I wanted to. Finally, 3) I suspect that Netflix, like other online "memberships", (MSN, the Book-of-the-month clubs, the record-of-the-month clubs, etc.) will continue to charge the recipient's card for "membership" long after they've begged them to un-join. This is the worst sort of gift because it costs the giver money like a good gift but it engenders bad feelings from the recipient who's being dunned and thinks you gave them nothing but a financial liability.
troll
Don't be troll. If a subscriber wishes to cancel their membership, they just cancel it. There's no hoops to jump through at all. I know because I've cancelled a netflix membership before. I've recently started a new membership and have not had any problems with netflix at all.
Great, you can buy my
Great, you can buy my non-refundable gift card then :)
Did anyone actually look???
In regards to there being no opt-out option, I'm asking if anyone actually looked into it???
Cause if you used you're heads you'd see, in the upper right corner, a link called "Your Account & Help".
And if you were curious to click on it, you would be brought to a page listing your account information and recent activity on the site.
I know nobody complaining on here (or even the author) did this cause they would have seen that, at the top & right in the very center, is your billing history. This 'history' list a link to your complete billing history RIGHT UNDERNEATH the listing of your next billing date!!! IT LITERALLY SAYS 'Next billing date'!!!
And then, you simply shift your gaze about 2 inches to the right and you see a link called (prepare yourself for this) CANCEL MEMBERSHIP!!!
A person with even limited intelligence should be able to to do this simple math equation: Cancel membership BEFORE the next billing date = no billing when not desired!!!
Not an option
If you GIVE this the RECIPIENT gets the account, using their own password and setting up their own queue. You (the PURCHASER) no longer have ACCESS TO THAT ACCOUNT as you are GIVING IT AS A GIFT. So the purchaser cannot see the account as you mistakenly insist. Perhaps I am just not as smart as you but when I purchase a year's gift certificate, paying up front, I consider it theft by deception when Netflix begins charging my card a monthly fee a YEAR later because the recipient didn't cancel. The recipient of a YEAR'S gift shouldn't have to cancel a year beyond the date they started receiving the gift. There is no mistake that Netflix knows very well people are being scammed on this and it's wrong. Being rude and insulting (very brave of you) to strangers doesn't change that.
RE: not an option
This makes no sense. The person purchasing the gift subscription is NOT the person who then keeps getting billed. The RECIPIENT, who is asked to put in a credit card number to activate the gift subscription and is the one who would continued to be billed after the gift subscription ends, if they don't cancel before that time. I was gifted a subscription and I could see when I would start to be billed if I didn't cancel. I happened to want to keep the service so I didn't cancel at that time. As a matter of fact, I have had a subscription with Netflix on and off for years and never had any issues either with cancelling or rejoining. Each time they did ask me why I was cancelling and each time I stated that I couldn't afford it at the moment, etc...
netflix gift card
I just bought 2 netflix gift cards for myself because I didn't want them having my credit card number. I have been a victim of Identity theft before so giving them my credit card # is not going to happen. EVER! Once I found out that I still need to provide a credit card number to use my gift card I called Netflix and found out that there's nothing they can do about it. I mentioned that Netflix offers a 1 month free trial online so what's the difference between the free trial and a 1 month gift card if both require a person to provide a credit card? The operator was stumped. Apparently they gets this a lot. Think about it. If you can get a free trial online then why buy and give someone a $8.99 gift card? I might as well write www.netflix.com on a piece of paper and give that away as a gift. Just tell the recipient that they need to sign up with their credit card #. I wasn't rude and I politly said goodbye. Not only did they lose a potential customer but I will make sure to spread the word to all my friends that netflix will screw you over. I'll put it on my facebook, myspace and buzz account. In the meantime I'll stick with the Playstation network for all my video rentals. I rather pay more to an honest company than pay less to a bunch of crooks.
I agree and I am spreading to
I agree and I am spreading to word as fast as I can. I may not get my$26.97 back but by the time I am done they are gonna wish they had!!!
Sony? Honest?
I doubt the threat to spread your information via things like MySpace and Buzz will strike fear into the hearts of everyone at Netflix. lol I agreed with most of your post until you got to the part where you called Sony an "honest company" haha Really? Rootkits FTW.
IT WORKED FOR EGYPT!!! Never
IT WORKED FOR EGYPT!!! Never underestimate the power of the web!
Honestly, you and everyone
Honestly, you and everyone else bitching about a movie subscription service really need to get a life.
Put on your big girl panties and deal with it!!!
And you call yourself "Logical Thinker?" Please!
Clearly, since you referenced 'you and everyone else bitching about a movie subscription service' and took the time to reply, you don't have a life either!
It makes makes ense to be an informed consumer. Or is that too much logical thinking for you to grasp? You probably don't know how to put on your panties, big girl or otherwise--deal with it!
Oh yeah. You are a total
Oh yeah. You are a total loser with no life if you are an individual who fights back against being ripped off by a corporation who uses unfair business practices to scam the public. Yeah put your big girl panties on cause its only money and we all know money grows on trees. So stop all yer complaining and your fighting back. Roll over and take it all the way up the ladder to the IRS. Oh yeah and if your not with us your with the terrorist!!
Netflix POOR Customer service
I bought a 2 month gift subscription for my grandparents only to learn they will not enter their credit card number online due to recent identity theft (Netflix requires them to input their credit card number online to activate the gift subscription). I explained this all to Netflix and had to work my way up their corporate ladder only to be told "sorry, refunds on gift subscriptions are not given at Netflix". When I asked "why", they said it is just their policy and they know it upsets many people. Obviously Netflix cares more about their bottom line than they do about customer service, retaining customers, and/or gaining new customers. Pretty short-sighted thinking, especially in this day and age. I turned it over to my credit card company to dispute. I also plan to share my very poor experience with as many friends as I can. Netflix will eventually learn that negative customer feedback travels far and fast.
Netflix charged two extra
Netflix charged two extra months of service on my friends card, after he had given me a gift subscription. They require you to opt-out, or cancel the account to stop what is advertised as a LIMITED gift subscription. DONT BUY A NETFLIX GIFT SUBSCRIPTION! You will be screwed over.
Netflix
I've been with netflix for four years, never had a problem when my account was put on hold, never had a problem getting my gift card back from the one person that didn't want the card, just used it myself, by the way "I LOVE NETFLIX".
I buy all my friends and
I buy all my friends and family who don't have credit cards gift cards from Netflix cause i know they wont be able to use them and they will eventually end up just giving them back to me bwaahaaahaaaa so I win twice. Remember its not the gift but the thought that counts. Haaahaaaaaahhaaaaaahhaaaahaaaaa Thats why i love Netflix :)
Bad/Good
Bad: I bought a subscription for my brother, who used it for a while then didn't tell me he no longer wanted it. He doesn't have a credit card, so the subscription was on mine. Sure enough, Netflix automatically renewed, and renewed...even though no DVD had been ordered for 18 months. When I finally learned that the subscription wasn't being used, I called to cancel. Netflix agreed to cancel, then didn't. It took 4 requests for cancellation before Netflix finally stopped charging me--months later. Good: to their credit, when I pointed out that the account hadn't been used for nearly 2 years at that point, they eventually refunded all charges for the previous year. Annoying process, admirable ending.
Netflix workaround
I wanted to get my brother a year of Netflix, mainly for the instant viewing access. But after reading this article on how their gift cards work, I decided on a different way to go about it. I purchased a 12 month gift plan on Netflix, then set it up for him myself and when it asked for a credit card I just entered a gift Visa card I had bought from my local bank (I only put $20 on it). So when the Netflix year sub is up, it'll just charge the gift Visa until it runs out. And then they'll offer him the option to cancel or enter a new card, with no risk or damage done to anyone's real credit. Of course you could also simply bypass the gift sub and just use the gift credit card to open a regular Netflix account and either refill it as needed or let it slide when its depleted. Anyway, all I had to do was send him an email with the login and password and he was watching movies with no hassles in minutes.
OMG!!!
I can't believe it...someone who put their energy into solving a problem instead of just complaining about the huge conspiracy every company is involved in to make a profit!?!?!? If only other folks on here used their heads instead of thinking the world is out to screw them, imagine what we could accomplish...
I love the VISA gift card idea...much better than directly from netflix (unless the person you're buying for already has an account...then it's a no brainer)...
I never even thought about using a third party gift card, but now it seems like a really great idea (I'm now considering doing that myself and just rechargeing it every few months).
Kudos to you, Grace!!! There is hope for humanity :-)
Well they no longer allow you
Well they no longer allow you to use Visa gift cards to pay for services.
True, They no longer do Gift Cards.
We do not accept prepaid cards. Please enter a valid credit card or debit card.
This has popped up to my pay card from Walmart. Anyone using a paycard from any place will have to find a real credit card or debit card to use. I think they're on to us! This really did sound like a great idea since I don't believe in Credit Cards and don't use a bank account. Funny, everywhere else I spend money gladly accepts my Paycard except for here. Their loss.
Gift Cards
Most VISA gift cards can be registered for online use. Read the back of the card; there should be a url to follow. Registration simply applies ownership to the gift card/credit card number. After you've registered the card number Netflix can't tell it's a gift card. I've been doing this for years and it's really the best way to avoid unwanted charges.
"Logical Thinker" If only....
If you READ Grace's message you would see that the idea of a gift credit card with a $$ limit came about ONLY AFTER READING THE COMPLAINTS on this site. So this solution (that provides you with such hope for humanity) came about because people complained.
Maybe you would have realized that if you weren't so busy complaining, criticizing and insulting everyone else. Or isn't that logical enough for you?
hey i need help
hey what card did u use im going to do that was it a prepaid visa??
Netflix New Terms prove what they were sued for...
Here's the revealing and disturbing part of the Netflix new terms, which basically admit to what they were sued for:
"In determining priority for shipping and inventory allocation, we may utilize many different factors, including the number and type of DVDs you rent through our service, the membership plan you select, as well as other uses of our service by you. For example, if all other factors are the same, we give priority to those members who receive the fewest DVDs through our service. The type, number, mix and weighting of the various factors impacting shipping and inventory allocation will change from time to time and will be made in our sole and absolute discretion." In other words, if they find you renting and returning quickly, and it ups the amount of monthly dvds you rent, they can intentionally slow down your shipments so you don't rent too many. They also mention in this section that "most people check out 1-11 dvds in a month". I guess this is their target # for what they want to allow.
It gets even uglier!
NetFlix claims to have no way to cancel in advance. I was appauld to find out my daughter could not use my gift to her without a credit card (she had none, I had to use mine). I was concerned about my card being on file and called in advance to make sure my card was not charged at the expiration of the prepaid gift. They told me "their system will not allow accounts to be canceled in advance". I have the burden to call again or my card will be charged and my gift card will turn into a monthly contract.
Netflix: The gift that keeps on giving (or taking)
So I go to install Netflix for an elderly parent that received it as a 12 month gift. Since thay won't trust the company with their card I have to decide if I should enter mine. While I trust my parents integrity, I'm concerned they won't remember to cancel it in a year, especially if they aren't using it. I hate the idea of nagging them to find out if they truely are appreciating somone-elses gift enough for me to continue the membership next year...
nice site
I guess the dealership financing dept. saw me coming. This was my first time financing a car. Didn't know some of the tricks I needed to know before shopping. Had to get another car because old one was totaled. Finally after several days of shopping, I decided on one Honda accord 07 model. Ended up signing contract with high interest rate due to poor credit. After a week, finance guy called; asked me to come in next day. When I got there, said "we need another $1000 for down payment." I didn't have it; had something financially that is maturing first week of May. could do it then. Signed a new contract to implement the extra money on down payment. Found out later that legally they couldn't do that. CAlled guy back about this. We got into it. ASked if I could bring it back; was told no. I had bought extended warranty plus roadside warranty with windshield and tire covrage. Told him I wanted to cancel the roadside, tire part of wrrranty contract. Originally he told me I could cancel. when I told him I wanted to, he refused. I called the warranty co. next day; they said I had 30 to cancel but since they hadn't received paperwork yet I would need to do it through dealership. CAlled and asked for supervisor of financing guy. I left voice mail message for him to return by call. He didn't until several days later. got to cancel contract through him. A week later, originally guy called saying I needed to redo contract showing I had canceled and what new balance would be. Week later, he called back wanting verification of resident address and verification of income. I took in those two items. Had told him originally that I had second source of income. He mentioned only verification of actual employment. another week went by; got a call from yet another guy in financing that I had never talked to. He wanted veriification of 2nd income. He wanted verification of this. Emailed contact to fax info over for the source of 2nd income. I had even contacted bEtter business bureau to see if they could something done; I had been told several different things by all three people that I had talked to. My second source of inocme took care of problem. The first guy I originally talked to made noise about being fradulant on source of income. I had told him first day about sources of income; he asked for only one source of verification. He forgot to write down info on second source. Told him that too. talked to his supervisor about the situtation. One peroon said I wasn't covered by loan yet; the person said I was covered. who to believe. Finally got things worked out after month of them calling me once a week about some problem that should have taken that long for everything to gel. Sounds like most car dealers are scamming new ways to screw people of money.
I guess the dealership financing dept. saw me coming. This was my first time financing a car. Didn't know some of the tricks I needed to know before shopping. Had to get another car because old one was totaled. Finally after several days of shopping, I decided on one Honda accord 07 model. Ended up signing contract with high interest rate due to poor credit. After a week, finance guy called; asked me to come in next day. When I got there, said "we need another $1000 for down payment." I didn't have it; had something financially that is maturing first week of May. could do it then. Signed a new contract to implement the extra money on down payment. Found out later that legally they couldn't do that. CAlled guy back about this. We got into it. ASked if I could bring it back; was told no. I had bought extended warranty plus roadside warranty with windshield and tire covrage. Told him I wanted to cancel the roadside, tire part of wrrranty contract. Originally he told me I could cancel. when I told him I wanted to, he refused. I called the warranty co. next day; they said I had 30 to cancel but since they hadn't received paperwork yet I would need to do it through dealership. CAlled and asked for supervisor of financing guy. I left voice mail message for him to return by call. He didn't until several days later. got to cancel contract through him. A week later, originally guy called saying I needed to redo contract showing I had canceled and what new balance would be. Week later, he called back wanting verification of resident address and verification of income. I took in those two items. Had told him originally that I had second source of income. He mentioned only verification of actual employment. another week went by; got a call from yet another guy in financing that I had never talked to. He wanted veriification of 2nd income. He wanted verification of this. Emailed contact to fax info over for the source of 2nd income. I had even contacted bEtter business bureau to see if they could something done; I had been told several different things by all three people that I had talked to. My second source of inocme took care of problem. The first guy I originally talked to made noise about being fradulant on source of income. I had told him first day about sources of income; he asked for only one source of verification. He forgot to write down info on second source. Told him that too. talked to his supervisor about the situtation. One peroon said I wasn't covered by loan yet; the person said I was covered. who to believe. Finally got things worked out after month of them calling me once a week about some problem that should have taken that long for everything to gel. Sounds like most car dealers are scamming new ways to screw people of money.
Car Dealership?
And this has what to do with the Netflix threads?
Vacation hold
You left out the fact that you can't use the vacation hold with a gift subscription. If you put the account on hold you lose whatever is left on the subscription. Non gift subscription users can put their account on hold while they are out of town. G/S users just have to keep the account active and lose however long they are out of town from the subscription.
Vacation hold
I put my gift subscription on hold for a week last May. No problems.
you can put it on hold for a
you can put it on hold for a week, you will still be 'charged' for the month.
Zero Group?
Check out the zero group. . . spoofing just got that much more dangerous
http://www.thezerogroup.com
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