Loophole in Shopify Billing API: Merchants Exploiting Annual Subscription Discounts

Partner Discussions
1

I’m facing an issue with our app’s annual subscription model that’s causing revenue loss through what appears to be a Shopify billing system loophole.

The issue:

  1. Merchant subscribes to our annual plan (with a 30% discount)
  2. Later, they uninstall the app (canceling current subscription)
  3. Merchant reinstalls the app and selects a cheaper monthly plan
  4. Shopify immediately issues a prorated refund for the unused portion of the annual plan

This differs from normal plan changes where APPLY_ON_NEXT_BILLING_CYCLE works correctly (old plan stays active until billing cycle ends). The uninstall/reinstall scenario bypasses this behavior, creating a financial vulnerability.

The core problem: Merchants can exploit our annual discount (30% off) by subscribing annually, then uninstalling and reinstalling with a monthly plan to receive an automatic refund—essentially getting the discount without the commitment.

Questions:

  1. Has anyone successfully solved this issue without violating Shopify’s policies?
  2. Does Shopify’s Managed Pricing handle this scenario differently?
  3. Could I use Usage-based charges instead (which aren’t prorated)

Thanks for any insights!

2

Hi Abueler,

Thanks for flagging this. I’ve connected with the team who owns the Billing API to see what their recommendation is - will update here when I learn more.