1-800-Flowers Hit with $375K Penalty for Predatory Subscription Tactics

Long Island-based 1-800-Flowers.com has agreed to pay $375,000 to settle complaints regarding its subscription policies, a move announced by the New York Attorney General’s Office. The settlement could lead to refunds for eligible customers. Attorney General Letitia James stated that an investigation revealed the company failed to make crucial disclosures related to its Celebrations Passport subscription service, which offers consumers the benefit of avoiding shipping and service fees. Furthermore, the Jericho-based company reportedly did not issue the acknowledgment required by New York law to subscribers and neglected to notify them before their automatic renewal dates.

The Celebrations Passport service is priced annually between $14.99 and $29.99, depending on promotional offers, as per the Attorney General's office. The comprehensive investigation focused on the company’s policies between February 2021 and December 2022. Attorney General James emphasized, "Companies that trick consumers into signing up for recurring subscriptions are breaking the law and costing New Yorkers their hard-earned money." While 1-800-Flowers.com did not respond to a request for comment, it neither admitted nor denied the findings of the attorney general’s investigation, agreeing to the penalties to circumvent the time and costs associated with potential litigation.

The attorney general’s office highlighted that while 1-800-Flowers did issue disclosures about its renewal policy, these terms were often obscured. They were found buried in fine print, embedded within links to separate webpages containing terms and conditions, or appeared in pop-out boxes on its website. New York state law mandates that companies provide clear disclosures about subscription policies to consumers, obtain their explicit consent for automatic renewals, and send a post-purchase acknowledgment. In a related effort, Governor Kathy Hochul signed legislation last year aimed at simplifying the cancellation of online subscriptions by requiring businesses to notify consumers of upcoming renewals.

Kimberly Palmer, a personal finance expert at NerdWallet, noted that companies frequently establish additional obstacles for cancellations, such as necessitating customers to navigate multiple links, contact customer support, or submit a written request. She advises consumers to utilize calendar reminders to cancel subscriptions before their renewal dates and to contact the nonprofit Better Business Bureau or their state attorney general’s office if they encounter issues. Palmer explained, "Automatically recurring subscription plans often capitalize on people forgetting they signed up for something." The New York Attorney General’s office has previously reached similar settlements with prominent companies including Uber, Equinox, and SiriusXM concerning their subscription and cancellation practices.

Certain consumers in New York and nationwide may be eligible for refunds based on specific criteria. New York residents who purchased a membership via the company’s website between February 9, 2021, and June 26, 2022, or through its mobile app between February 9, 2021, and December 21, 2022, can receive a full refund of their most recent fee if they also filed a complaint with the attorney general’s office, the Better Business Bureau, or the Federal Trade Commission. Alternatively, New Yorkers are eligible for a $20 refund if they made a purchase using the website or mobile app between February 2021 and December 2022, had their membership automatically renewed for a second year, and did not utilize the free shipping or no service fee benefits during either year beyond their initial purchase with the membership. Following the news, shares of 1-800-Flowers jumped to $4.21, rising 0.2% on Wednesday after earlier trading as low as $4.07.