1. Using Subscription Management
  2. Add Early Termination Fees

Add Early Termination Fees

You can add early termination fees on a subscription or coverage product to charge customers when they terminate a subscription. Here's how:

  1. Go to the Subscriptions page.

  2. Select a product to go to the Edit Product page.

  3. From the Early Termination Penalty drop-down list, select either:

    • Flat fee

    • Prorated flat fee

    • Percentage of the remaining term fee

  4. Optionally, enter a value in the Grace Period in Days field.

    Note: You can't set a grace period that's beyond the subscription end date.

  5. Click Save and Close.

About Early Termination Penalty Fees

Early termination fees are of three types:

  • Flat Fee

    Applies a fixed amount as an early termination fee.

  • Prorated flat fee

    Applies a prorated flat fee based on the duration of an active subscription. For example, let's say a customer has a subscription for 12 months and an early termination fee of $120. Then, the customer cancels after 4 months. The applicable penalty fee is $80. Similarly, a customer who cancels after 11 months pays $10.

  • Percentage of the remaining term fee

    Applies a percentage fee for the remaining term. For example, a customer has a subscription for 12 months, an early termination fee of $50, and the percentage fee is 50 percent. Then, if the customer cancels after 4 months, they pay $200. Similarly, a customer who cancels after 11 months pays $25.

    Note: You can only use this option with recurring price charge definitions that are not usage charges.

Use Grace Period in Days to let your customers terminate a subscription within the specified number of days. The application doesn't apply the early termination fee when the subscription is terminated within the grace period duration specified by you.

After you close a subscription product, go to Billing Summary to see the early termination fee. By default, the application displays the Charge Name field displays as Penalty Fee when the value of the subscription profile is blank.

Things to Keep in Mind

Here are some things to keep in mind:

  • You can't use an early termination fee for an evergreen subscription.

  • You must specify the subscription end date to enable termination fee fields.

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