Netflix credit: BGH overturns controversial termination clause
The Federal Court of Justice is currently dealing with gift cards, remaining credit and notice periods. The judges are now banning Netflix from artificially extending subscriptions. The groundbreaking ruling has an impact on the entire streaming market.
BGH strengthens the rights of streaming users
In Karlsruhe, the Federal Court of Justice declared a clause in Netflix’s terms and conditions to be inadmissible. The streaming provider had planned that cancellations for accounts with loaded prepaid credit would only take effect after the credit had been completely used up. The judges of the third civil senate now classified this as unreasonable discrimination against customers under file number III ZR 152/25. The Berlin Court of Appeal had previously ruled in favor of Netflix in July 2025 and classified the contract as a transfer of use similar to a rental agreement.
The Federal Court of Justice now assesses the agreement as a service contract. Under the previous regulation, subscribers could not pause their membership, which in extreme cases led to a contract extension of up to 39 months.
Consequences for remaining credit and subscriptions
Again vzbv reported, a termination will also take effect in the future if there is still money in the user account. The association initiated the process. Ramona Pop, board member of the vzbv, emphasized that gift card credit must not expire if the contract is terminated.
The Federal Court of Justice today made a very positive ruling for consumers and put a stop to Netflix’s restriction of the right to cancel. If Netflix sells gift cards and vouchers, then only in accordance with applicable consumer rights. Retaining consumers in the contract until the balance on the gift card or voucher has been used up was unlawful. Ramona Pop, Federal Consumer Association
Digital service gift cards are often purchased at supermarkets or gas stations and are used as a means of payment for people without a credit card. Previously, subscribers had to continue using the service until the top-up amount was completely used up. An early break of the account was often technically not planned. The Karlsruhe judges made it clear that the provider’s economic interest in not managing credit over a long period of time did not outweigh the users’ need for flexibility. Consumers will be able to control subscriptions more flexibly in the future.
Signaling effect for the market
Although the ruling specifically refers to Netflix, its classification as a service contract has significance for other digital providers with similar models. The decision is considered a legal benchmark for terms and conditions in combination with prepaid cards. Many companies are likely to adjust their contractual clauses in the coming months.
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