Prorated credits are the credits that get created if, during the Change Subscription operation, the option Apply prorated credits and charges is selected. These credits cannot be added to subscriptions manually. When a subscription is renewed, the available credits are automatically redeemed and this will recur until the credits run out.
When a subscription is upgraded to a higher plan, the unused amount from the previous plan is added as Prorated Credits and deducted from the new plan amount.
Let us take a look at the example to understand this better:
Upgrading from plan A to plan B.
Current Plan (Plan A): $10
Current Cycle: 1 May 2013 - 1 June 2013
New Plan (Plan B): $20
Plan Change Date: 15 May 2013
Credits Received and Redeemed: $5
Because of the upgrade, the customer gets a $5 credit from their initial plan of $10 for the unused period. This is added to their current charge which would be $10 for the next 15 days in the current cycle. So the customer pays $5 ($10 - $5 credits).
This prorated credit amount would appear on the invoice as a separate line item ‘Prorated Credits'.
When a plan is downgraded, the available credits remain intact and will be deducted on subscription renewal.
Downgrading from plan B to plan A.
Current Cycle: 1 October 2013 - 1 November 2013
Plan Change Date: 15 October 2013
Credits Received: $10
Credits Redeemed: $5
Amount Paid: $0
Available Credits: $5
Since the amount of credits is more than the actual billing amount, the remaining credits are added to the subscription as available credits and will be redeemed during the next renewal on 1st November. This will continue to redeem until the credits become $0. So for the example above, the customer will be charged $5 on 1st November and the available credit will be $0.
Credits added by Change Subscription operation will appear as Prorated Credits under the Subscription Info section:
The prorated credits log will appear in the subscription details page:
Prorated Credits cannot be used for charges that are applied immediately. This is because when a charge is added and applied immediately, it creates a separate invoice that is not a part of the normal billing cycle. Prorated Credits can only be applied and redeemed during renewals and plan changes such as upgrades or downgrades.
No. Once prorated credits are added to the subscription, they will not expire as long as the subscription is active or until the available credits are over.
To remove unused credits, you can open a particular subscription and scroll down to the bottom where you will see the Prorated Credits tab. Here you will have the option to remove unused credits:
In the screen above, only unused credits can be removed. If an allotted credit entry has been used partially or completely, you will not have the option to remove the balance credits for that entry.