Slacker Premium Not Quite A Scam, But Close

An enraged reader, Josh Vickers, writes in today to complain about Slacker’s premium online radio service. Like Pandora, Slacker streams music to users for free. And like Pandora, Slacker limits the number of times you can skip songs each hour, and has advertising.

Both services allow users to remove those limitations if they pay a yearly fee. Slacker charges $48/year. Pandora charges $36/year for their Pandora One service.

The frustration from users isn’t that Slacker charges more. It’s how they market the premium product. Pandora straight up says they’ll charge you $36 to upgrade. No misleading marketing statements. You pay $36 and you get Pandora One for a year.

But Slacker tricks you. They give you a seven day free trial and say it’s $3.99 a month after that. But you get billed for the whole year – $48 – after that seven day period is over. And if you don’t want want to pay for that year, you have to cancel during the seven day period.

Compare the Slacker marketing pitch above to the straighforward way Pandora handles premium subscriptions in the image to the right.

Back to that enraged user. After seeing a $48 charge from Slacker on his credit card when he expected $3.99, emailed Slacker for an explanation, and then tried to cancel. He was denied (messages in chronological order):

Slacker: We hope you have been enjoying the benefits of Slacker Radio Plus. Your subscription has reached its renewal date. Your credit card was charged $47.88 on 08/26/2009 and your Slacker Radio Plus service will continue uninterrupted. Your auto-renewal date is: 08/18/2010. To adjust your account settings at any time, simply log into your Slacker account and enter the Account Management section. Thank you for listening, Slacker

Customer: i was under the understanding I was going to be billed monthly at 3.99 per month. Please advise.

Slacker: Slacker subscription are billed annually. We don’t currently offer a monthly billing plan.

Customer: Please cancel my subscription – thats misleading – should consider revising your message.

Slacker: Once the subscription has past the 7-day trial, you can go through our web site as described below to cancel your subscription so that, once your current subscription has expired, you will not be renewed for another subscription. However, the subscription has to be canceled within the 7-day trial per the contract you agreed to when you signed up for the free trial in order to avoid being billed.

So if you sign up for the free seven day Slacker trial, don’t be surprised when you’re billed for a whole year and can’t cancel. Pandora, by contrast, does give partial refunds. I contacted the company today and they said “It’s a year agreement, but we of course do refunds when people call to request them.”

The difference in how these companies market to customers and then treat them later is night and day. No wonder Pandora is so much more popular – tricking a few people to pay you $48 is fine, but clear messaging and proper customer service will win in the end: