Understanding Prorated Billing for Ad-Free Subscription Upgrades
When you upgrade to our ad-free tier, here’s what happens:
When you upgrade to our ad-free tier, here’s what happens:
- Fixed Price for Ad-Free Tier: The cost of the ad-free tier is a standard rate, visible at checkout. This price does not vary based on any previous promotional offers or subscription plans.
- Ending Promotional Offers: By choosing to upgrade, you are concluding any ongoing promotional offer and transitioning to the standard price of the ad-free tier.
- Prorated Credit: Any unused portion of your existing subscription is calculated and credited towards the upgrade. This ensures you only pay the difference based on the remaining value of your initial subscription.
Example: Upgrading to the Ad-Free Tier
Customer: Initially paid $49.99 for a special offer for 365 days of access.
Customer: Initially paid $49.99 for a special offer for 365 days of access.
- Days Used: 83 days
- Days Remaining: 282 days
Calculating Unused Credit:
- Daily Rate: $0.14 per day ($49.99/365)
- Unused Credit: ~$39 (for the remaining 282 days)
Upgrade Cost Calculation:
- Ad-Free Tier Cost: $149 (fixed price)
- Minus Unused Credit: $149 - $39
Total Upgrade Cost: $110
Additional Example: Upgrading to Ad-Free Tier
To further clarify our upgraded subscription process, let’s consider another scenario:Initial Subscription Details:
To further clarify our upgraded subscription process, let’s consider another scenario:Initial Subscription Details:
- Initial Payment: Customer paid $99.99 for an annual subscription.
- Subscription Duration: 365 days.
- Days Used: 45 days.
Upgrade to Ad-Free Tier:
- Cost of Ad-Free Tier: $149.99.
Calculating the Prorated Credit:
- Daily Rate Calculation: We calculate the daily rate of the initial subscription. In this case, it’s approximately $0.27 per day ($99.99/365 days).
- Unused Subscription Value: Since the customer has used 45 days, they have 320 days remaining (365 - 45 days). The unused subscription value is then 320 days x $0.27/day, which equals approximately $86.40.
- Upgrade Cost Calculation:
- Ad-Free Tier Cost: $149.99.
- Minus Unused Credit: $149.99 - $86.40.
Total Upgrade Cost: $63.59.
Note on Applicable Taxes:
Note on Applicable Taxes:
- Taxes: Please note that the final amount may vary based on local tax laws and the tax rate applicable to your region.
- Billing Statement: Your final bill will include these taxes, clearly itemized for transparency.
Key Points for Customers
- Fixed Upgrade Price: The ad-free tier has a consistent price for all, visible at checkout.
- Seamless Transition: Your transition to the ad-free tier automatically factors in the unused portion of your existing plan.
- Fair Billing: You’re billed fairly based on the remaining value of your current subscription when upgrading.