No. Pre-authorization times out after 5 days. The merchant does pre-authoriziation first for a small amount (like one dollar) just to make sure the payment is

No. Pre-authorization times out after 5 days. The merchant does pre-authoriziation first for a small amount (like one dollar) just to make sure the payment is actually valid, which disappears after 5 days with no capture. It's just a card validation method, it doesn't reserve any funds (besides the single dollar). Consumers would be rightly upset if starting a free trial with no obligation immediately reduced their available funds by a significant amount. This is unrelated to the later charge when the trial ends, which is usually more than 5 days later, and will be a distinct charge for the full amount. There isn't anything unethical about automatically declining purchases. It's not any different, cost-wise, from manually cancelling the trial. The merchant could however continue to provide the service, claiming that you never really cancelled it, then consider you indebted for the declined charges, but that wouldn't go over very well.