Subscription cancelation and refunding the end customers automatically - Examples
This topic provides examples of canceling a subscription and issuing refunds with calculated credit memos, focusing on different refund scenarios for a termed subscription.
The section includes examples of canceling a subscription with different refunds but the same calculated credit memo.
The following subscription will be used in the examples:
-
Subscription Term Type: Termed
-
Charge: 1 monthly recurring charge of 100 USD
-
Contract Effective Date: 2022-12-01
For simplification, the following table only lists information on the first two billing periods of the subscription.
|
Billing period |
Billing period start date |
Billing period end date |
Payment |
|---|---|---|---|
|
1st |
12/01/2022 |
12/31/2022 |
$100 |
|
2nd |
01/01/2022 |
1/31/2022 |
$100 |
|
Cancel Effective Date |
Specific Date: 01/09/2022 |
Calculated credit memo: $74.2 |
An end customer requests you (the merchant) to cancel the subscription by specifying the cancellation effective date as 01/09/2022, which only affects the 2nd billing period and payment. A credit memo is calculated based on the specified cancellation effective date. That is, counting from 01/09/2022, 23 out of 31 days do not need to be paid, and thus $74.2 is calculated as a credit memo.
You may specify different refund amounts based on the business policy and the calculated credit memo in different situations.