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Proration Policies

Proration is the adjustment of charges or credits on a subscriber's account based on the amount of time a service is used. Proration ensures that subscribers are only charged for the actual time they use the service, whether they upgrade, downgrade, start, or cancel their subscription partway through a billing cycle. This means fair billing for your subscribers and provides you with the flexibility to change your subscribers subscriptions at any time.

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Subscriptions use client credentials to enable changes to subscriptions, so if you want your shoppers to have the ability to make changes, you can implement a BFF layer using this approach.

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Proration occurs for:

  • Pricing option upgrades/downgrades: If a subscriber changes their pricing option in the middle of a billing cycle, proration adjusts the charges to reflect the time spent on each pricing option.
  • Service cancellation: If a subscriber cancels a subscription before the end of a billing cycle, they may receive a prorated invoice for the used portion of the subscription.
  • Mid-cycle subscription: If a subscriber starts a subscription in the middle of a billing cycle, they are charged a prorated amount for the remaining days in the billing cycle.

There are several scenarios when implementing proration policies.

  1. You may want one policy for multiple offerings because only some subscriptions need prorating.
  2. You may want a default proration policy for your store.
  3. You may want several policies for different offerings.

In Subscriptions, charges only prorate by day. As soon as a subscriber changes their subscription, a manual billing run is triggered and an invoice is generated with the new price on the next billing run and the difference in price is prorated over days.

By default, proration is not enabled for Subscriptions. Once you have attached a proration policy to an offering, proration is enabled automatically.

End dates when switching pricing options​

Subscriptions manages the subscription end date when shoppers switch from one pricing option to another. Whether or not an end date is configured depends on the end behavior of the pricing options you are switching between.

Current SubscriptionNew SubscriptionProration BehaviorEnd date
closerollThe subscription switches from a pricing option with a fixed end date to a rolling pricing option so no end date is set after proration.No end date is configured.
rollcloseThe subscription switches to a fixed pricing option, and the end date is configured based on the duration of the pricing option.An end date is configured.
closecloseThe remaining time on the current pricing option is not carried over to the new pricing option. For example, if your current pricing option has 3 months remaining and you switch to a new pricing option that has a fixed length of 6 months, the new end date is calculated as 6 months from the day you switch pricing options, effectively resetting the subscription length to the new pricing option.New end date calculated from the day you switched pricing option.