I’m trying to understand more about the app billing cycles. What would happen in the following situation?
A merchant installs my app, accepts the app subscription plan of $10/month without free trial, then, the same day he changes his subscription to a cheaper plan of $5/month.
In this case, when the next app billing cycle comes, will he be charged only the $5? Or the $10 too, considering that he accepted the $10 plan first?
Thank you!
Hey @Pridentt
When a merchant downgrades to a cheaper plan, Shopify automatically prorates the charges using a specific formula.
For example, If a merchant begins a 30-day billing cycle on a $20.00 plan, and then downgrades to a $10.00 plan on day 15, the proration calculation works like this:
($20.00 - $10.00) * (15/30) = $5.00
This means the merchant receives a $5.00 credit for the unused portion of their higher-priced plan. The formula takes into account both the price difference between plans ($10) and the time remaining in the billing cycle (15 days out of 30), ensuring merchants only pay for what they actually use.
You can find the complete details about how subscription proration works in the documentation: About subscription billing
Thank you @KyleG-Shopify !