Under Settings > Processing > Recurring Billing, you can determine whether you would like to automatically retry failed transactions and whether proration will apply to subscription price changes.

Automatic retries

If a customer’s payment method fails or is declined, their subscription status will change to Past Due. Automatic retries are your recurring billing backup plan—you can set up logic in the Control Panel to automatically retry a declined or failed charge at specific intervals.

note

Depending on the processor response code, some declines are not retried because they suggest that it's unlikely the transaction will ever be successful.

Setting up retry logic

To find the options for automatic retries, head to Settings > Processing > Recurring Billing. Once you check the box next to Automatically Retry Failed Transactions, several different options will appear.

After a subscription is past due, retry the subscription after…

Here’s where you can specify how long you want to wait to retry the charge after it initially fails or is declined. You must choose a value between 1 and 10 days.

If above retry fails, try again after…

Same idea as above. Again, you must choose a value between 1 and 10 days.

If above retries have failed…

This is where you have the most flexibility. You can choose to:

  • Cancel the subscription
  • Continue retrying the subscription
  • Leave the subscription past due
important

If Leave the subscription past due is selected, the past due balance will continue to accrue each billing cycle without any additional retries or transaction attempts. You will need to contact your customer to update their payment details and to collect the past due amount.

The first and second retries above will only apply during the billing cycle in which the subscription becomes Past Due. If you choose to continue retrying the subscription, we will only retry it once per billing cycle, on the subscription’s usual billing date.

The balance on Past Due subscriptions will continue to increase every billing cycle—either indefinitely or until the number of cycles in the subscription is reached. If a subscription remains Past Due for multiple cycles and you don’t want to bill the customer for the full amount owed, you can manually retry the subscription for any amount. If the retry is successful, regardless of the amount of the transaction, it will reduce that subscription’s balance to $0.

note

Any time you manually retry a subscription charge via the API or in the Control Panel and the transaction fails, it will not count as an automatic retry attempt. This means that your automatic retry logic will still run as scheduled.

Retry logic example

Your customer has a $50 monthly subscription that bills on the first of each month, and you’ve set up your retry logic with the following parameters:

After a subscription is past due, retry the subscription after: 10 days
If above retry fails, try again after: 10 days
If above retries have failed: Continue retrying the subscription

Prior to August 1, the customer had an Active subscription with a balance of $0. On August 1, the transaction for $50 fails, the customer’s subscription becomes Past Due, and its balance increases to $50. Based on your retry logic, here’s how it might turn out:


August 10
We retry the transaction for $50, but it fails again. The customer’s balance remains $50 and the status remains Past Due.


August 20
We retry the transaction for $50 a second time, but again, it fails. The customer’s balance remains $50 and the status remains Past Due.


September 1
It’s the beginning of a new billing cycle, so in addition to the $50 Past Due balance, the customer has a new $50 monthly charge. We attempt a transaction for $100, but this also fails, increasing the subscription balance to $100. We won’t try to charge the customer again until the beginning of the next billing cycle.


October 1
It’s another new billing cycle, so on top of the $100 Past Due balance, the customer has a new $50 monthly charge. We attempt a transaction for $150, which is successful this time. Now the subscription’s status returns to Active, and the subscription balance returns to $0.


Now that the subscription is Active, if it goes back to Past Due on a future billing date, the retry logic will be applied again and the subscription will be retried in 10 days.


Proration

You can use proration to charge or credit a customer if a change is made to the subscription price in the middle of a billing cycle. Enabling proration adjusts the price based on when the change took place in the billing cycle, and it charges the customer the newly-calculated rate immediately. Without proration enabled, any changes made to a customer’s subscription mid-cycle will go into effect at the beginning of the next cycle.

When you make a change to a subscription’s price, it is either considered an upgrade or a downgrade. An upgrade includes editing the subscription price to a higher dollar amount or applying an add-on. A downgrade includes editing the subscription price to a lower dollar amount or applying a discount.

Proration with add-ons and discounts

In order to adjust a subscription’s price, you can either use add-ons/discounts, or directly update the subscription and change the price. When you make an update to the subscription, the price change will be reflected for the remainder of its billing cycles or until another change is made. Alternatively, when you use add-ons/discounts, you must define how many billing cycles should be adjusted.

If you intend to use add-ons/discounts to adjust the price for only one billing cycle and you have proration enabled, you’ll actually end up charging (or discounting) your customer twice: once for the prorated amount that is charged immediately after the add-on/discount is applied, and then again for the full amount on the next billing cycle.

The best way to avoid this scenario is to do one of the following:

  • disable proration on the specific subscription update
  • create a separate transaction outside of the subscription
  • disable proration for your entire gateway
note

When creating or updating a subscription via the Control Panel you will see an option to Prorate subscription amount (subscription price, add-ons and discounts). This option will override any proration settings you have established in your general Recurring Billing settings.

Enable proration on upgrades

If you edit the subscription price to a higher dollar amount or apply an add-on, it is defined as an upgrade. To enable proration on upgrades:

  1. Log into the Control Panel
  2. Navigate to Settings > Processing > Recurring Billing
  3. Click Edit
  4. Check the box next to Enable proration on upgrades

If the price of a subscription increases in the middle of the billing cycle and you have enabled proration on upgrades, then the gateway will immediately charge the customer a prorated amount to cover the remainder of the billing cycle. We’ll do this each time the subscription price increases.

Proration on upgrades example

Your customer has a $30 monthly subscription that bills on the first of each month. He decides to upgrade to a $50 monthly subscription on September 3. Because he already paid his $30 monthly bill on September 1, he’ll be charged a prorated amount immediately to cover the charge for the rest of the month.


Based on this example, here’s how we’ll calculate the prorated charge:

Original monthly subscription price = $30

New monthly subscription price = $50

Number of days left in the billing cycle = 27

Total number of days in the billing cycle = 30

($50 – $30) x (27 / 30) = $18

Here are the charges your customer will see on his statement:

September 1: $30

September 3: $18

October 1: $50


If the charge for a prorated amount fails

Once you enable proration on upgrades, you can choose how to handle failed charges for prorated amounts by checking or unchecking this field under Settings > Processing > Recurring Billing:

If the transaction for a prorated amount fails, don't update the subscription or the balance.

If this is checked and the charge fails, we will not add the prorated amount to the subscription balance and the subscription itself will remain unchanged. Using the example above, if the $18 prorated charge were to fail, the subscription price wouldn’t change; the customer would be billed the usual $30 on October 1.

If this field is left unchecked, we’ll add the prorated amount to the customer’s subscription balance, and on the next billing date, we’ll charge them this amount plus the next cycle’s full price. In this case, if the $18 prorated charge were to fail, the subscription price would increase to $50, and we would bill the customer $68 on October 1.

Enable proration on downgrades

If you edit the subscription price to a lower dollar amount or apply a discount, it is defined as a downgrade. To enable proration on downgrades:

  1. Log into the Control Panel
  2. Navigate to Settings > Processing > Recurring Billing
  3. Click Edit
  4. Check the box next to Enable proration on downgrades

If the price of a subscription decreases in the middle of the billing cycle and you have enabled proration on downgrades, then we will subtract the prorated amount from the customer’s subscription balance. A customer’s balance should be $0 if they pay their bill on time, so you should see a negative balance for them in the gateway.

On the next billing date, the customer will be charged for any positive balance on their subscription. If the downgrade gave them a negative balance, their payment method won’t be charged until their balance exceeds $0.

note

Prorations on downgrades will always be applied to the subscription balance in the gateway—we will not issue a refund to the customer’s payment method. If you would like to issue a refund instead of applying a credit, you will need to create a separate transaction outside of the subscription.

Proration on downgrades example

Say your customer has a $75 monthly subscription that bills on the fifth of each month. She decides to downgrade to a $25 monthly subscription on September 6. She had already paid her $75 monthly bill on September 5, so we’ll subtract a prorated amount from her subscription balance to credit her for what she’s already paid. This credit will be applied to her balance in the gateway, so it will not affect her bank statement at all.


First, we need to calculate how much she overpaid. Here’s what we already know:

Original monthly subscription price = $75

New monthly subscription price = $25

Number of days left in the billing cycle = 28

Total number of days in the billing cycle = 30

To calculate the amount we’ll credit her, we find the difference between the new subscription price and the old subscription price, then multiply it by the portion of the billing cycle that remains (number of days left in the billing cycle divided by the total number of days in a billing cycle).

($25 – $75) x (28 / 30) = -$46.66

Based on this calculation, we’ll apply a credit of -$46.66 to her subscription balance.


How you see her balance in the gateway will differ from the charges she’ll see on her monthly bank statements. Here are the charges your customer will see on her bank statements:

September 5: $75

October 5: $0

November 5: $3.34

She’ll see the full $75 that she paid on September 5, because the transaction had already posted, and we do not issue refunds when downgrading subscriptions. On October 5, we apply the new monthly subscription amount ($25) to her balance in the gateway (-$46.66 + $25 = -$21.66)—because her balance is still negative, she is not charged anything for October. On November 5, we apply the monthly subscription amount to the remaining balance on her subscription and find that she only owes the remaining $3.34 (-$21.66 + $25 = $3.34)—which is automatically debited and then reflected on her November bank statement.


Here’s what her subscription balance will show for you in the gateway:

September 5: $0

September 6: -$46.66

October 5: -$21.66

November 5: $0

Because she paid her full $75 balance on September 5, her balance shows as $0 in the gateway. On September 6, we’ll apply the calculated credit, which results in a negative balance. On the next billing cycle (October 5), we add the new subscription price ($25) to her balance, leaving -$21.66 on her subscription. With the next billing cycle (November 5) we add the new subscription price ($25) to her balance, making her new balance $3.34. Because her balance is now positive, she will be automatically be charged the $3.34—if the charge is successful her balance will be shown as $0 in the gateway.


At this point, she is officially trued up on her subscription! From here forward, the customer will see a $25 charge on the fifth of each month.

Still Have Questions?

If you can’t find an answer, give us a call at 877.434.2894 or contact our Support team


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