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Best way to handle billing for upgrades/downgrads?

general proration concerns

         

dannyboy

2:26 am on Feb 15, 2004 (gmt 0)

10+ Year Member



I've typically billed customers on a monthly or quarterly basis.

Upgrading/downgrading, and proration hasn't been an issue since I only offer a single "package" for purchase.

I'm going to change the design of my service where a customer can upgrade and possibly downgrade their existing package to another package.

My question is, how do you guys handle the billing aspects of upgrades and downgrades?

For instance, the below example assumes I'm billing customers on their anniversary date...

Customer purchases a quarterly Gold Package on January 5 for $20.00. His next bill date is 90 days later (April 5).

Customer wants to upgrade to the $40 Platinum Package on Feb 5. 30 out of 90 days of service has already been rendered.

Please fill in the blanks on how you'd personally handle this for your particular business setup. I'd like to have a process that's understandable and acceptable to the customer. I'm especially concerned with a customer wanting to upgrade a very low priced package right on the heels of the anniversary date. The proration fee would be in the range of pennies and wouldn't even cover the merchant processing fees.

I know this may seem like a silly question to post here, but I'd very much value the advice of other users here. Thanks.

mep00

7:53 am on Feb 15, 2004 (gmt 0)

10+ Year Member



You could establish a minimum unit of time and if there is less than that amount left they need to subscribe for 90 day plus what's remaining. The additional days would just be added to the bill at the rate of the difference.