Credit Management: #5 Advanced Refund Policy

You're subscribed to a well-known SaaS design tool. You've used it to manage your team's projects, create marketing visuals, brochures, and so on. But your needs change over time. Your company may switch to another tool or hire an in-house designer who prefers a different tool altogether.

So, you head to cancel your subscription. You expect a quick process, but instead you get a long policy note saying, "Refunds are not applicable once billing begins." 

Suddenly, that positive brand image fades slightly, leaving you hopeless and disappointed. 

Now imagine a different outcome. You cancel, and moments later, an email lands in your inbox with the note, "We noticed you've used just 3 of your 12 months of subscription. We've automatically refunded the unused balance to your account. We'd love to have you back anytime."

It's short, polite, and proactive. You didn't even ask for it, but the small gesture leaves a long-lasting impression. 

You might think, "That's how business should be done."

Chances are, the next time you need a similar tool, you'll come back, or better yet, you'd probably say to others, "Go for them. They're professional even when you cancel."

The reason is simple: That brand didn't just process a refund; it earned your trust, even in your last interaction with them.

What makes Refund a Powerful option? 

Cancellations are an everyday reality in any subscription-based business. As customer needs evolve, they pause projects, change budgets, or move on. But how a refund is handled during cancellation can define how customers remember your brand. A messy, delayed process often feels like resistance, while a clear, automated one feels like respect.

Refunds are, at their core, about closure and trust. When customers know they'll get what's fair, it builds confidence in the business. They might cancel today, but they'll remember your brand and the experience longer.

Challenges in Refund Processing 

Behind the scenes, managing refunds manually isn't easy. Every time a cancellation happens mid-cycle, you must calculate the unused portion of the service, raise a credit note, adjust taxes, and initiate the refund through the payment gateway. This is just for one cancellation. When you have hundreds of customers, you get into a slow, error-prone, and stressful process.  

Minor discrepancies, a miscalculated date or a missed adjustment can lead to customer disputes or accounting confusion. Instead, what should have been a moment of trust will become a point of tension. That's why automation is crucial in keeping this process fair and efficient.

Refund Made Effortless using Zoho Billing. 

Zoho Billing brings structure and simplicity to what used to be one of the most tedious parts of subscription management ie., handling refunds.

With Automatic refunds, Zoho Billing allows businesses to define clear refund rules and process refunds automatically when customers cancel a subscription. The system calculates the exact refund amount based on the unused period, generates the corresponding credit note and initiates the refund immediately.

Refunds can be set up to work in two ways:

1. Usage-Based Refunds:

Zoho Billing automatically calculates the value of the remaining days in the billing period when a customer cancels mid-cycle.

For instance, Customer A cancels a quarterly subscription priced at $450 after using it for a month. The system automatically calculates the refund of $300 based on the unused period.  

As soon as the subscription is cancelled, a refund will be initiated instantly, and a credit note will be generated for the refunded amount in closed status. (The amount will be calculated automatically based on the days left in the billing cycle.)

2. Rule-Based Refunds:

You can define your own refund logic and process refunds accordingly. You can configure the start date and end date in a billing cycle as brackets and offer different percentages of refunds for each.

Let's understand refund rules with a real-time scenario. A software company offers a yearly subscription plan priced at $4800. To make its refund policy transparent, it sets up refund rules in Zoho Billing as follows.

Frequency	Start Date	End Date	Refund %
Yearly	1	30	100
	31	60	75
	61	90	50

 

Customer A and Customer B subscribe to the plan. Suddenly, customer A cancels the subscription after 20 days. Customer B continues to work for a month and cancels the subscription after 45 days from signing up.

Based on the refund policy configured, Customer A gets a full refund of $4800. Customer B will get 75% of the refund, which will be $3600, as it falls into the 31-60 days refund bracket.

Both refunds are calculated and processed automatically by Zoho Billing. The system initiates the refund, captures it in a credit note, and keeps it closed, ensuring consistency and transparency.

The same logic applies to any predefined frequencies in Zoho Billing, such as monthly, bi-yearly, quarterly, etc.

Money Back Guaranteed Refund: Simplified

Imagine your business offers a yearly plan worth $2000 with a 90-day money-back guarantee. Traditionally, your finance team would have to track each customer's start date, cancellation date, and eligibility, often through endless spreadsheets.  

With Zoho Billing, you can effortlessly automate this. You can define a rule: For an early subscription refund, 100% if cancelled within 90 days. Use a rule-based refund method.

That's it. Zoho Billing monitors such accounts automatically. If a customer cancels within 90 days, it instantly calculates and issues a full refund.

Note: You cannot process automatic refunds.

1. If the invoice already has a credit note or excess payment applied.
2. If payments are adjusted against other charges.

In such cases, Zoho Billing will show a detailed message with simple steps to process the refund manually.   

Look Back 

So far, we've explored how credits, limits, and refunds work together to make billing fair and flexible.

But managing credits isn't always straightforward. Mistakes, overdue follow-ups, missing adjustments, or misapplied credits can creep in.

In our next post, we'll uncover some common mistakes in credit management and explain how to avoid them while remaining fair and friendly.

 

• Topic Participants

• Hari Hara Sudhan. S

  

• Sticky Posts

• Community Learning Series | Digest #5 — September 2020

  Dear customers, We're happy to bring you the September edition of our #CommunityDigest! Keep track of your subscription KPIs right from your smartphone: Last month, we enhanced our Android mobile app to help our customers get daily updates on their business health. We got to know from a lot of customers that this has made their job much more easier because they no longer have to keep a reminder to manually check on the previous day's revenue or activations. If you have not downloaded it yet, here's

• Community Learning Series | Digest #4 - August 2020

  Dear customers, We hope you're staying safe and healthy. I'm happy to bring you the fourth edition of our #CommunityDigest with some brand-new updates from us. 1. Daily Business Updates (for Android users) The Zoho Subscriptions Android app has got a cool new update: You can now get a push notification to your smartphone that lets you know how many activations and cancellations have taken place, and what's the net revenue for the previous day. The best part is, you can tell the app when exactly you

• Community Learning Series | Digest #3 - July 2020

  Dear customers, We hope you're staying safe and healthy. We're glad to bring you the July edition of our #CommunityDigest. New community members can view our previous newsletters here. This time, we have two major updates and three interesting topics for you: 1. Zoho Subscriptions Developer Community Since the inception of Zoho Subscriptions, our team believed that the recurring billing platform we provide should be able to offer an extensive API library that empowers businesses to automate most

• Introducing: Community Learning Series | Digest #1 - May 2020

  Dear customers, We hope you are staying safe and healthy. Helping businesses manage their customer subscriptions more efficiently has always been, and always will be, our goal at Zoho Subscriptions. We strongly believe this is possible if we grow together as a community and share what we know with each other. To nurture this shared learning experience, here is our brand-new Community Learning Series! ​ Welcome to the first edition of our digest! Each edition of our community digest includes guides

• Recent Topics

• Sync your Products Module for better context.

  In customer support, context is everything. The integration between Zoho Desk and Zoho CRM helps your sales and support teams function as one, delivering better customer experiences. With the latest update to this integration, you can now sync the Product module in your Zoho CRM with your Zoho Desk portal. This feature enables products from Zoho CRM to reflect in the "product" field in Zoho Desk. This can save your support team valuable time and effort.    Some things to note when syncing the two:

• Invoice status on write-off is "Paid" - how do I change this to "Written off"

  HI guys, I want to write off a couple of outstanding invoices, but when I do this, the status of the invoices shows as "Paid". Clearly this is not the case and I need to be able to see that they are written off in the customer's history. Is there a way

• CRM gets location smart with the all new Map View: visualize records, locate records within any radius, and more

  Hello all, We've introduced a new way to work with location data in Zoho CRM: the Map View. Instead of scrolling through endless lists, your records now appear as pins on a map. Built on top of the all-new address field and powered by Mappls (MapMyIndia),

• Creating meetings from an email

  Hi. Similar to Outlook, it would be helpful if a meeting can be scheduled from an email so that the attendees need not be manually entered every time it's created.

• Please, make writer into a content creation tool

  I'm tired of relying on Google Docs. I'm actually considering moving to ClickUp, but if Writer were a good content creation tool instead of just a word processor, I would finally be able to move all my development within the Zoho ecosystem, rather than

• ZohoSalesIQ.Chat cannot send messages

  Chat cannot send messages. Our app implements the customer service chat window functionality by integrating the Mobilisten SDK. Recently, we encountered an issue: after successful SDK initialization and visitor registration, when the `startWithQuestion`

• Missed chats on WhatsApp closing after one minute

  Hi, we have added WhatsApp as a channel. However, if a chat is not picked up within 2mins, the chat is marked as missed and is closed within a minute. Why are they not staying in our "missed" queue for 24 hours as per our WhatsApp preference settings?

• Feature Request: Add Tax ID Display on Event Tickets

  Hello Backstage Team, I’ve had several clients bring up an issue regarding tax compliance when creating events. For tax purposes, they are required to show their Tax ID on the event tickets. Currently, this isn’t an option, so they have to manually generate

• Release Notes | January 2026

  We have rolled out a set of powerful new enhancements across Zoho Vertical Studio that bring several long-awaited capabilities to your applications. These updates focus on deeper customization, smarter automation, better reporting, and improved usability

• Email Alias: To keep emails flowing without disruption

  Email Alias acts like a nickname for a user’s primary email address, allowing multiple email addresses to deliver messages into the same mailbox. Consider the scenario where an employee manages multiple responsibilities, such as responding to sales inquiries,

• Zoho CRM for Everyone's NextGen UI Gets an Upgrade

  Hello Everyone We've made improvements to Zoho CRM for Everyone's Nextgen UI. These changes are the result of valuable feedback from you where we’ve focused on improving usability, providing wider screen space, and making navigation smoother so everything

• Layout Adjustment.

  Hello Latha, Hope you are doing well. I wanted to check with you about adjusting the layout columns in the Service Report from the backend, as currently there is no capability for us to customize the layout from our end. Below is the output that I am

• Prepayment of a sales order

  How does everyone handle this common (at least it is common for us!) situation? We require all our orders to be fully prepaid before shipment since we manufacture made to order, custom products. Since ZOHO does not allow a sales order to be prepaid, we are forced to create an invoice at the time an order is placed to allow the customer to pay it. Our sales category is therefore skewed, since the sale was actually booked at the time an order was placed, rather then at the time it is shipped, which

• Deposit on a Sales Order

  Good day, 100% of my business is preorders, no inventory. I am trying to run away from QB for one of my businesses, but I require two options that I don't seem to find with Zoho Books. 1 - If there is a way to apply a deposit on a sales order, as with

• Syncing calendar with Google Calendar doesn't work when events are sent to auto repeat

  Hi... The ZOHO CRM -- GOOGLE CALENDAR sync is broken. If I create a single event on either side, sync works, but if I create an event with auto repeat on either side it doesn't work. Furthermore, events created before the sync don't show up in the calendar.

• Archive Option in Conversation View

  Hello, I have a suggestion\request to add an "Archive Thread" button in conversation view of Zoho Mail. The best suggestion I have is to put an "Archive Thread" button next to the "Label Entire Thread" button in conversation view. Most users don't just

• Collapsing and expanding of lists and paragraphs

  hello Would you ever implement Collapsing and expanding of lists and paragraphs in zoho writer ? Best regards

• Does Zoho Writer have Dropdowns

  I want to add a drop down field in Zoho writer. Is this possible?

• Automatic Refresh on Page?

  Hi everyone, We use a page as a dashboard which shows data for the laboratory and tasks pending etc. Is there a way to set the page to automatically refresh on a X time? Many thanks TOG

• Is It Possible to Convert a Custom Module to a Quote?

  I recently created a custom module in our CRM environment for RFQs so that our sales team can submit quote requests directly in Zoho rather than by email/phone. This allows for a cleaner overall process, minimizing potential errors and potentially encouraging

• Dropshipping Address - Does Not Show on Invoice Correctly

  When a dropshipping address is used for a customer, the correct ship-to address does not seem to show on the Invoice. It shows correctly on the Sales Order, Shipment Order, and Package, just not the Invoice. This is a problem, because the company being

• Inventory "Bulk Actions" button - add more fields to "Bulk Update > Select a field"

  Can we not get a lot more actions that are commonly used by customers into the "More Actions" button on the Inventory list? More fields listed in the Bulk Update > Select A Field? Possible Bulk update Fields Preferred Supplier ( to quickly move items

• Bulk upload image option in Zoho Commerce

  I dont know if I am not looking into it properly but is there no option to bulk upload images along with the products? Like after you upload the products, I will have to upload images one by one again? Can someone help me out here? And what should I enter

• How to send push notification to mobile if new lead created in Zoho CRM

  I have a scenario whenever a leads are created via API I want to see push notification to my mobile(iOS) where I installed Zoho CRM.

• Function #11: Apply unused credits automatically to invoices

  Today, we bring you a custom function that automatically applies unused credits from excess payments, credit notes, and retainer payments to an invoice when it is created. Prerequisites: Create a Connection named "zbooks" to successfully execute the function.

• Tip #60- Exploring Technician Console: Screen Resolution- 'Insider Insights'

  Hello Zoho Assist Community! Have you ever started a remote session and felt the screen quality wasn’t sharp enough for detailed work? A new user recently explored Zoho Assist after installing the trial version and running a few initial tests. While the

• Right Moment, Right Message, Right Operator: Never Miss a High-Intent Lead

  Ever been on a website or app, thinking “Should I buy this or not?” and suddenly a friendly “Hi! How can I help you?” pops up at the perfect moment? That’s not luck. That’s timing done right. Engaging right visitors at the right moment, with the right

• CRM x WorkDrive: We're rolling out the WorkDrive-powered file storage experience for existing users

  Release plan: Gradual rollout to customers without file storage add-ons, in this order: 1. Standalone CRM 2. CRM Plus and Zoho One DCs: All | Editions: All Available now for: - Standalone CRM accounts in Free and Standard editions without file storage

• Multiple header in the quote table???

  Hello, Is it possible in Zoho CRM to add multiple headers or sections within the Quote product table, so that when the quote is printed it shows separate sections (for example “Products” and “Services”)? To clarify, I’m asking because: This does not appear

• Zoho CRM Workflow Automation: Activate & Deactivate Workflows Using API

  Zoho has now enabled: ✅ Activate / Deactivate workflows using API ✅ Schedule workflow activation & deactivation This is extremely useful for real-world automation use cases 💡 🧩 My Use Case I created a scheduled automation that: ☀️ Activates workflows

• {Action Required} Re-authenticate your Google Accounts to Continue Data Sync

  Hello Users! To align with Google’s latest updates on how apps access files in Google Drive, we’ve enhanced our integration to comply with the updated security and privacy standards, ensuring safer and more reliable access to your data. With this update,

• Function #53: Transaction Level Profitability for Invoices

  Hello everyone, and welcome back to our series! We have previously provided custom functions for calculating the profitability of a quote and a sales order. There may be instances where the invoice may differ from its corresponding quote or sales order.

• Project-Based Inventory Consumption and Proforma Invoice in Zoho ERP

  While working with customers across different industries, we have identified a few functional questions and gaps that commonly arise—especially for project-based and service-oriented businesses. Many organizations, such as those in shipping, construction,

• Power up your Kiosk Studio with Real-Time Data Capture, Client Scripts & More!

  Hello Everyone, We’re thrilled to announce a powerful set of enhancements to Kiosk Studio in Zoho CRM. These new updates give you more flexibility, faster record handling, and real-time data capture, making your Kiosk flows smarter and more efficient

• [Free Webinar] Zoho RPA - OCR, PDF Automation, & More

  Hello Everyone! Greetings from the Zoho RPA Training Team! We’re excited to invite you to our upcoming webinar on the latest release updates for Zoho RPA, where we’ll unveil powerful new capabilities designed to make your automation journey smarter, faster,

• Zobot Execution Logs & Run History (Similar to Zoho Flow)

  Dear Zoho SalesIQ Team, We would like to request an enhancement for Zoho SalesIQ Zobot: adding an execution log / run history, similar to what already exists in Zoho Flow. Reference: Zoho Flow In Zoho Flow, every execution is recorded in the History tab,

• Capture Last check-in date & days since

  I have two custom fields on my Account form, these are "Date of Last Check-In" and "Days Since Last Contact" Using a custom function how can I pull the date from the last check-in and display it in the field "Date of Last Check-In"? and then also display the number of days since last check-in in the "Days SInce Last Contact" field? I tried following a couple of examples but got myself into a bit of a muddle!

• Global Search Settings

  I'd love a way to remove some modules from being included in the global search. This would allow use to provide a better user experience, limiting the global search to only those modules that are regularly used removing any models used for background

• Card Location in Zobot

  Hello, when using the “Location” card in a codeless builder Zobot, the behavior in WhatsApp is inconsistent. When asking the user to share their location, they can type a message, which will return the message “Sorry, the entered location is invalid.

• Automation Series: Auto-create Dependent Task on Status Change

  In Zoho Projects, you can automatically create and assign a dependent task when a task’s status is updated. This helps teams stay aligned, ensures reviews happen on time, and reduces manual effort. In this post, we’ll walk through an easy setup using

• Next Page