With help from major retailers, Microsoft has new ways to make people pay more for Microsoft 365 Family (Home) or Personal. Amazon and Best Buy now offer Microsoft 365 renewals charging full price for the first and later years.
Ever since Microsoft 365/Office 365 plans started, Microsoft has enticed people with low prices in the first year then automatic full price renewals in later years. The lower Microsoft 365 prices were from retailers who regularly undercut Microsoft’s prices by 20% and more.
For just as long, Office Watch has explained how easy it is to continue paying less for renewals. Just buy another year of Microsoft 365 retail and use the product key to top up your existing plan. See Office 365 Money Saving Roundup
Microsoft now makes that harder by blocking discount purchases of single Microsoft 365 Home or Personal plans. Instead retailers sign you up for automatic renewals at full price — more profit for Microsoft and the retailer – not great for customers.
Larger retailers sell automatic renewals to Microsoft 365. Until early 2019 all renewals were done by Microsoft. The renewal is at full price charged by the retailer, giving them an incentive to sell ongoing Microsoft 365 plans.
It’s the same high price trick that Microsoft uses, except the retailer manages the renewal and presumably gets a cut.
In effect, Microsoft is allowing large retailers to become partners in very profitable Microsoft 365 renewals.
The really sad thing is that this trick will work. Most people just blindly follow the default options offered without considering alternatives. It’s not just Microsoft 365 renewals that are a trap. Almost any ongoing charge like insurance, subscriptions, phone plans etc. are likely to charge more than necessary.
Since the retailers are charging full price, there’s no good reason to buy from them. Just as good to buy direct from Microsoft, you’ll pay the same with the minor advantage of being able to deal direct if there’s a problem.
Here’s how it works. The top result for Office 365 (now Microsoft 365) at Best Buy in the USA is an ‘Auto Renew’ product that’s not been available before.
There’s a similar Microsoft 365 Personal plan at the full $69.99 price.
Down in the product details it’s explained that the renewal is through Best Buy and cancelling requires a phone call. Presumably the phone call requirement is to make it a little harder to cancel, compared to an online option.
” Auto-Renew Subscription
Automatically renewing Microsoft Office Home subscription will renew each year for $99.99 (or then-current price) unless canceled before yearly renewal date by calling 1-888-BestBuy.“
It’s a little clearer on Amazon USA. At present there are two Microsoft 365 Family/Personal (Office 365 Home / Personal) options called ‘Auto renewing download’ and ‘Software download’ on separate product page. Both require automatic renewal by Amazon as disclosed in the fine print under the ‘Add to Cart’ button.
At least customers can cancel Amazon’s automatic renewal from the ‘Digital Software Subscription Asset Manager’ part of their Amazon account. No phone call required.
Obviously, we don’t know what happened between Microsoft and the retailers.
The advantages for both parties are clear. So are the DISadvantages to customers.
Retailers would not have liked selling a year of Microsoft 365 then seeing Microsoft get all the renewal income for the later years. They were losing business on Office sales that they’d been getting for many years.
Microsoft didn’t like customers avoiding their highly profitable renewals with discounted purchases elsewhere.
The compromise seems to be Microsoft allowing retailers a piece of the renewal income in exchange for fewer discounts on sales of single year Microsoft 365 plans.
What can customers do?
Our money saving advice still stands.
Do NOT automatically renew Microsoft 365 – either direct from Microsoft or a retailer.
If you must or have bought an ‘auto renew’ plan, you can still cancel the auto-renewal at any time.
Discounted and legal Microsoft 365 single year products are a little harder to find. Presumably there are retailers out there willing to discount.
Microsoft, their retail partners and customers will have to deal with renewal confusion in the years ahead. There will be customers who bought Microsoft 365 not realizing they’d bought an auto-renewing product not a single purchase. Also plenty of scope for renewal confusion with people not knowing who is handling the renewal, Microsoft or another retailer.
6 steps to saving on Office 365 renewals or first purchase
15 month Microsoft 365 special, a good deal or gimmick?
Microsoft 365 money saving roundup
Find your Office 365 plan, expiry date and when Microsoft charges for renewal