Cancellations

david.ells's Avatar

david.ells

30 Sep, 2009 08:09 PM

If a user cancels their subscription in the middle of a billing period, will they still be billed for the cost of the plan they were on at the end of the period? If they are, is it up to us to prorate them the difference with a custom credit, if we chose to do so in that scenario?

EDIT: This discussion is a bit outdated. See this KB article for more information about plan changes.

  1. Support Staff 1 Posted by Marc Guyer on 30 Sep, 2009 11:04 PM

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    If the customer cancels, the subscription is ended and CG will not automatically charge the customer anything. If you would like to charge them for some prorated amount you would be able to do so via a one-time transaction before you cancel the subscription.

  2. 2 Posted by david.ells on 01 Oct, 2009 01:53 PM

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    Does that mean that only the recurring charges for a subscription are waived at the end of the canceled month? Will overages incurred during the canceled month still be billed? (This is actually what we want). Or do we need to calculate that overage ourselves and make the custom charge at cancel time? (When you say a one-time transaction, do you mean a one-time custom charge (one that can be done through the API)?)

  3. Support Staff 3 Posted by Marc Guyer on 02 Oct, 2009 10:05 PM

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    No, CG will not automatically bill the customer anything after the cancellation date.

    Since proration can occur any number of ways, CG does not do it for you. So, yes, you calculate the overage and generate a one-time transaction according to the charges you specify. Yes, it will be possible to do this via the API once this feature is implemented. It is currently in development.

    Up to this point, all of the billing models that we have implemented via CG have not required any type of proration at cancellation time for a few reasons:

    1. We do not typically anticipate cancellations (they should only happen infrequently).
    2. The revenue lost for a fraction of a month is a negligible amount.
    3. Often, the reason for the cancellation is simply because the customer's credit card has expired and we are unable to charge the customer. They have not updated their credit card despite multiple reminders. This revenue is lost unless some effort is put into it's collection, usually at great cost to the merchant.

    If the above holds true for your situation, I would recommend forgoing the work required in handling the proration. Handling for this edge case has been far from worth the effort in our experience. That said, I know that there are times when proration is required due to out-of-pocket costs, high subscription fees, etc.

    If you require the one-time transaction feature for this purpose, please let us know your timeline and we will create some urgency on your behalf.

    We might, in the future, implement several proration techniques in CG that you can choose from.

  4. 4 Posted by Scott Klein on 07 Oct, 2009 12:36 AM

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    Do you have an ETA for this delivery of single charge through API?

    Also, if we could change to bill them at the front of the month instead of the rear, CG could easily calculate a prorated return upon cancelation based on how many days into the month it is. Even without the proration, the option to change the billing to the front of the cycle would be nice (ex. right when they sign up they get charged for setup fee AND first month's amount).

  5. Support Staff 5 Posted by Marc Guyer on 08 Oct, 2009 07:57 PM

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    I do not have a firm date for custom invoices and one-time transactions but I expect that it will be available within 4-6 weeks.

    the option to change the billing to the front of the cycle would be nice (ex. right when they sign up they get charged for setup fee AND first month's amount).

    We have also considered this feature. It is on the todo list and would require a relatively small development effort. Maybe within the same timeframe as one-time transactions.

  6. Marc Guyer closed this discussion on 08 Oct, 2009 07:57 PM.

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