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Subscriptions

Proration

Proration is adjusting a subscription charge to reflect a mid-cycle change, so the customer pays only for what applied during each part of the period.

It arises on upgrades, downgrades, plan switches and cancellations, and it is the most common source of billing disputes — because customers reason about it in whole periods and billing systems reason in days.

The decision worth making explicitly is whether a downgrade takes effect immediately with a credit or at the next renewal. Both are defensible; not deciding produces inconsistent behaviour that support absorbs one ticket at a time.

Related terms

  • Dunning
  • Churn rate

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