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Auto Renewals and Refunds
LittleCreek
Member, Patron Provider
in General
What to do when a client forgets that he has a subscription to a service that auto renews and then later wants a refund after the 30 day refund window has passed?
Comments
Unfortunately, on these occasions, if you read the terms, you know that you cannot refund because the 30 days have already passed. Do you offer 30 days of refund on VPS? Most of us don't because of server costs.
Close the ticket, suspend the account and in case they complain on LET, eat the loss and provide refund.
Explain the client that this shit would cost you {X} amount of money. Some of them thinks it's easy like clicking a button and it's freeee, if you throw the amount of money they change theirs mind. Maybe offer it as store credit if that service wasn't "customed" and you don't really lost a lot of money on it - so he can came back later?
I do. Just today I got this message 2 months after the initial signup "I didn't realize I had auto-renewed my subscription, please refund me."
It had already auto renewed once and now a second time so I don't know how he could not know.
This happened to me at another provider. Since it was my mistake I said 'Understandable, have a nice day' and ate the loss myself.
If you can check if they actually used the server it can change this. If they used the damn service and claiming they didn't know it auto refund, show TOS and say no. If they really didn't it's up the the provider. Some may do a full refund, some provide a partial to cover the fees, and some just say no.
Why it is not possible to cancel inactive subscription from the provider side? Run sql query, if there is paypal subscription id and no active service - find that sub in paypal and cancel it.
You can actually cancel paypal subscriptions on the provider side.. the most i have had to deal with that is during acquisitions, when changing paypal accounts....
Regarding your question:
This is actually dependent on the billing software used and the payment gateway. Most payment gateways simply implement logic for sending the user to paypal, then using a webhook from paypal to link the successful payment to a specific account. This also means that most billings systems do not know that a user set up a subscription. They just see a payment arrive (every Month?) and match it to account data based on certain criteria.
So the problem is doing this automatically, because often the billing system typically does not know that something is a subscription.
Some people do buy shit too much and miss subscription notification then only check quarterly cc report.
I think check user usage and depend on them behavior , partial or full refund exclude gateway fee as long as you dont take loss can free your head for later LET drama.
If the service was provided but he didn't use it due to negligence or ignorance, no refunds. If the service was not provided (the service was actually cancelled but he left paypal auto-payment turned on), then you should provide a refund since you didn't provide any service for the payment.
Yes I agree with that.
Its hard to know if a service was used or not.
Customer could connect to the server all the time? Do you have any resource utilization charts of the VPS?
~ Wojciech
Yes I already do that. I am talking about services that have not been cancelled by the client.
Previously we moved our activity to Business and I forgot to remove my personal card from their billing platform also it was disabled/frozen but somehow Stripe was allowed to take money and mark as paid that invoice - I contacted the company, I told them the situation and I got a refund after 1 year of subscribe - month by month.
Moral of the story - it depends on you if you want to help or not.
Wait, even if you as a provider decline subscription, client still sends money? That’s not how this works. In paypal, as receiving party, you have control over what do you accept. If cancel active subscription, client can’t send you money with same subscription id.
Not what we are talking about though. I am talking about a client who has not cancelled anything but now wants a refund.
Ok, refund him. And in future just cancel subscription on your side to avoid problems and damage to the reputation. Few code lines saves a lot of time for both parties.
Of course you can go the usual way: customer to blame. Refund to account credit etc. That’s usually indicates lack of customer care and damages reputation beyond repair.
A reasonable provider would probably deal with it on a case-by-case basis.
I've never had trouble getting a refund after an auto-renew I had meant to cancel but the biggest difference being I do it within a day or two, max. A month though? That seems a bit excessive.
We're all human and all make mistakes. If it doesn't appear that the guy is trying to take advantage of you (check historical CPU usage/bandwidth) and if it's flatlined or so minimal it looks like an idler, I'd give the guy the benefit of the doubt and refund - but absolutely not tell anyone that you did it. Don't want to set a precedent either.
If it does look like it was regularly used, explain that, re-state what your terms are, apologize for the inconvenience and provide instructions on how to cancel their auto-renew.
Objectively, you have every right to keep the money but if that money isn't going to sink your business, your gesture of goodwill will at least give that guy an incentive to recommend your service to others.
I do cancel subscriptions for cancelled services. But why would I cancel a subscription for an active service? That doesn't make sense either.
People are always responsible for their mistakes.
In this situation as a consumer I'd happily accept a refund minus the 1 month of the service as I completely understand that the service was still active for the past month.
I also like to think I'm a reasonable person so if the provider told me no refund as the 30 day refund period has passed then I'd accept that, take it on the chin & find a new purpose for that VPS for the next 11 months.
Aha, now I see. Well, if service is active - it is customers problem to cancel it. There is no other way… you can’t read minds remotely.
I am actually one of your customer.
If I haven't cancelled the service; whether I use it or not has no siginificance. You have allocated something for me for that period, and I should pay for that allocation (even though I didn't use). Simply, "Oh I forgot!" doesn't hold any value in my opinion. It's the duty of myself as customer to check what I am signing up for.
If I forget, then will just have to accept that as loss.
My only beef is the auto renew takes place about a week before its really due. That's the only time I would have a problem. If I decided to discontinue service during that period, but auto renewal took place 7 days before.
Not just this provider. I have a vps at a provider that renewed my server 15 days advance. I was planning on cancelling that vps, so I asked for a refund and no questions asked I got it
That's one thing I've ran into as well. Don't really understand why as you're essentially pre-paying for something you've already paid for.
This is why I don't prefer the "subscription" / "auto payment" based, renewals as end user. I like to manage my money myself. But sadly some (new) provider offer/force only "PayPal subscription" for payments. Usually I chose, prefer the manual payment options, to avoid this things. And I check my exist 'subscriptions' regularly and cancel them if not necessary.
Frantech has the proper solution:
Payment will not be taken automatically. To pay your invoice, please login at https://my.frantech.ca/viewinvoice.php?id=986018 and click Pay Now, then follow the instructions on screen.
Don't offer subscription at all.
Manual payment only.
Which is kind dumb when you think about it. One-time payment means nobody has to keep their card on file anywhere (preferable) and if you stop paying, they stop providing. Prretty simple. If your service is up to snuff, I'll renew!
When you have autopay only, a client is inevitably going to forget, want a refund and the decision to be subscription only just tied up your support staff for something that would have worked itself out naturally. I straight up avoid providers that require subscription.
Pay via crypto, never had to worry about this
Much preferred than dealing with accidental auto renewal, or worse when the auto renewal is debited 7/14 days before the actual invoice due date.