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

• Missing the "Find & Merge Duplicates" choice

  Hi, I am missing the "Find & Merge Duplicates" choice. I looked under the "More Actions" menu in Contacts, Accounts, Vendors, and Leads and it is not there.  I have full permissions.  Please assist me on finding this feature. Thanks!

• How to install Widget in inventory module

  Hi， I am trying to install a app into Sales Order Module related list, however there is no button allow me to do that. May I ask how to install widget to inventory module related list?

• Cannot see Application from Lookup field

  Hi all, I am trying to access data for an application on our account via a lookup field; however, the application doesn't appear in the dropdown at all. Can anyone shed any light on this, please? I have asked Zoho support; however, they're just as confused,

• How to track a contact or customer's past product purchases in Bigin Premiere?

  Hello there. I am the sole user of Bigin for a small company (chess club), and would like to track current and past purchases made by a contact (player) or company (family which includes the player). Players may register for multiple tournaments, take

• LENTITUD EN RECIBIR MAIL

  Buenas tardes, Estamos experimentando lentitud en la recepción de correos electrónicos.

• Items should display under specific warehouse

  I have configured the multi warehouse but it show all the items under all warehouse which is not correct according to our business logic, so i want that items should only display under that specific warehouse not under all the warehouses not even with zero quantity. Some items should be common but not all so is there any option for that purpose so i can specific the items to its warehouse. Regards

• Tracking Non-Inventory Items

  We have several business locations and currently use zoho inventory to track retail items (sales and purchase orders). We were hoping to use zoho inventory to track our non-inventory items as well (toilet paper, paper towels, etc). I understand that we

• Partial refunds

  I am trying to process refund for a one item invoice, however the refund is partial: i am getting this error while creating credit note, can anyone share some wisdom about this

• Best practice importing items and matching assemblies

  Hi, I was wondering what would be the best practice to import items and composite items (assemblies) From my backup, what should I import first? The items or the composite items? I am on Zoho one, using inventory and books. Kind regards, Sabine

• Bulk Fill In & Edit PO/Bill/SO/Invoice

  Hello, I am adding stock in bulk on a PO, the system is automatically populating the Rate (price) and Tax from the item data. Problem is that the bill rate is different from the rate on the item data, so I have to manually erase each and enter the price.

• Separate Items & Services

  Hi, please separate items and services into different categories. Thank you

• Items Below Reorder Point Report?

  Is there a way to run a report of Items that are below the Reorder Point? I don't see this as a specific report, nor can I figure out how to customize any of the other stock reports to give me this information. Please tell me I'm missing something s

• Allocating inventory to specific SO's

  Is there a way that allocate inventory to a specific sales order? For example, let's say we have 90 items in stock. Customer 1 orders 100 items. This allocates all 90 items to their order, and they have a back order for the remaining 10 items which could

• Cancelled Transfer order problem

  Hello, We've canceled a transfer order, and we can't add the related items to a new Transfer Order. The system tells us that the bin doesn't have the required quantity, but when we check the item, it indicates that there are 2 units in the bin. It also

• Creating a Chart from a Report

  In Zoho Analytics, is it possible to create a chart from a Pivot View report? We are looking to use Zoho Analytics to replace Excel for Sales reports and would like to be able to show both the table and the chart together.

• Client Portal ZOHO ONE

  Dear Zoho one is fantastic option for companies but it seems to me that it is still an aggregation of aps let me explain I have zoho books with client portal so client access their invoice then I have zoho project with client portal so they can access their project but not their invoice without another URL another LOGIN Are you planning in creating a beautiful UI portal for client so we can control access to client in one location to multiple aps at least unify project and invoice aps that would

• Email Insights included in Bigin emals are marked as SPAM everywhere

  Today I noticed that email recipients who use Office 365 never receive emails sent from Bigin. Further examination showed that all Email Insights links in email headers are marked as spam/phishing by Office 365. Example screen included. The problem is

• Data Import | Zoho Analytics Custom Query Window Size

  Please increase the window size for the Custom Query Data Import. It's impossible to work with such a small query window.

• Name changed in settings for mailbox but still not changed when typed in To field

  In the email account secretary@ i have updaetd the new staff members details but the old members name still appears when I type secretary@ in the To field. I cant work out where Zoho is finding the old name from. I have deleted the browser cache. If I

• Cannot add my name to my domain name

  I want to have My name@mydomain.com and it says my name is linked to another account already. Please fix it since I do not have another account.

• 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

• Establishing new Zoho email account on laptop

  Good Morning: I am very long time Outlook business user and decided to try your email service last night and had established an account. I am trying to verify my account; how do I establish my Zoho email account on my laptop? I opened the account with

• unable to send message reason 550 5.4.6 unusual sending activity

  My email account can't send message. It shows unable to send message reason 550 5.4.6 unusual sending activity detected

• how to add email to existing organization i w

  I am already registered my organization and i have an email id. I need one more email id but i can't find anywhere .i want the cheapest email id . how to add ?

• e-mail bloqueado

  Estou com meu e-mail lucas@peplus.me bloqueado, preciso desbloquear para retorno de usos em minhas atividades.

• zoho labels api not working

  We're using n8n to automte email reply using zoho api. I'm facing issue with label api. I added the required scopes but its not working. i followed zoho api documentation but didn't work. also, where do i find/how do i create zoho oauth token mentioneeed

• Desk DMARC forwarding failure for some senders

  I am not receiving important emails into Desk, because of DMARC errors. Here's what's happening: 1. email is sent from customer e.g. john@doe.com, to my email address, e.g info@acme.com 2. email is delivered successfully to info@acme.com (a shared inbox

• Streams/Shared email doesn't show up in windows trident app. It works fine on MAC. Is there any difference between 2 install ?

  I can see streams/share email boxs on my MAC version of trident app but i can't see them in windows version of trident app. Is there any difference between 2 install? I try to find setting but not able to see any setting to add stream/share email boxes.

• add zoho account

  How to add a zoho mail to previous zoho account? I have two

• Zoho Desk Mobile App Year-End Roundup - 2025

  Dear Zoho Desk users, Greetings! As you gear up for the festive season, we are excited to share a quick journey into all that is released in 2025! Zia's generative AI capabilities Zia insights can be highly beneficial in helping agents manage daily support

• Narrative 17: The role of Zia AI in customer support

  Behind the scenes of a successful ticketing system: BTS Series Narrative 17: The role of Zia AI in customer support Overview Zia in Zoho Desk is a layered AI assistant that combines generative AI, prediction, and automation to support agents, automate

• Domain Transaction

  I have purchased a domain name called trainedworkforce.co.in I made the payment got the receipt but the domain is still not purchased after successful transaction .

• Ability to Set a Unified Tab Order/View for All Users in Zoho Projects

  Hello Zoho Projects Team, We hope you are doing well. We would like to submit a feature request regarding tab/menu organization in Zoho Projects. Current Behavior: The tab (module) order in Zoho Projects is user-specific. Each user (internal or external)

• Zohomail - The "All Messages" vs "In Box"

  Why do some new email message appear under the all messages view but not in my inbox? That's really annoying but to be fair I've experienced the same with gmail.

• error while listing mails

  I can't access email in any of my folders: Oops, an error occurred - retry produces the second error response: error while listing mails (cannot parse null string). I've signed in and out of Zoho, restarted my iMac.

• Zoho CRM for Gmail Extension Not Working in Brave Browser?

  Is anyone able to get the Zoho CRM Chrome Extension working in the Brave browser? They're both built on the Chromium platform and every other Chrome Extension works with the exception of Zoho CRM for Gmail so any ideas here?

• Introducing the Zoho Projects Learning Space

  Every product has its learning curve, and sometimes having a guided path makes the learning experience smoother. With that goal, we introduce a dedicated learning space for Zoho Projects, a platform where you can explore lessons, learn at your own pace,

• Where to show Customization Field ?

  Dear Sir, I have made some New Field in Item Field Customisation. Now I don't require that field in Estimate, Sales Orders etc. I just wants that field in Sales Invoice to Show/Hide... Is that possible ?

• Zoho Desk 2025 round-up: Key highlights on feature releases

  Hello everyone, As we gear up for 2026, here is a detailed round-up of all feature releases in Zoho Desk web throughout the year. For consolidated information on releases check out the What’s New page You can also watch these webinars. Zia in web Zia

• Print Sales Orders, Purchase Orders or Invoices from API

  Hello, Is it possible to use the print option that is available in Sales Orders Purchase Orders and Invoices with the API?. I don't see any information in the docs about this. Thanks

• Next Page