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

• Zoho Inventory. Preventing Negative Stock in Sales Orders – Best Practices?

  Dear Zoho Inventory Community, We’re a small business using Zoho Inventory with a team of sales managers. Unfortunately, some employees occasionally overlook stock levels during order processing, leading to negative inventory issues. Is there a way to

• Deactivated Zoho One account can sign in

  I am concerned by the fact that deactivated users in Zoho One have the ability to sign in even after their account has been deactivated (not deleted). these inactive identities have no access to individual Zoho apps or data. based on my experience they

• How can I reset the password for a user in Zoho Projects

  We need to reset the password for a user in Zoho Projects. I am the admin portal owner and there was nothing to be found to do this. very confusing.

• How can I add a comment to an existing ticket via API?

  I need to add comments/notes to the history of an existing ticket using the API without overwriting the original ticket description. Thanks!

• Marketer's Space: Proven tips to improve open rates – Part III

  Hello Marketers! Welcome back to another post in Marketer's Space! This is the final post in the "open rate series". In the first and second parts, we discussed topics ranging from sender domains to pre-headers—but we're not done yet. A few more important

• MCP no longer works with Claude

  Anyone else notice Zoho MCP no longer works with Claude? I'm unable to turn this on in the claude chat. When I try to toggle it on, it just does nothing at all. I've tried in incognito, new browsers, etc. - nothing seems to work.

• Zoho Social - Feature Request - Reviewer Role

  Hi Social Team, I've come across this with a couple of clients, where they need a role which can review and comment on posts but who has no access to create content. This is a kind of reviewer role. They just need to be able to see what content is scheduled

• Zoho Books/Inventory - Update Marketplace Sales Order via API

  Hi everyone, Does anyone know if there is a way to update Sales Orders created from a marketplace intigration (Shopify in this case) via API? I'm trying to cover a scenario where an order is changed on the Shopify end and the changes must be reflected

• Zoho Inventory / Finance Suite - Add feature to prevent duplicate values in Item Unit field

  I've noticed that a client has 2 values the same in the Unit field on edit/create Items. This surprised me as why would you have 2 units with the same name. Please consider adding a feature which prevents this as it seems to serve no purpose.

• Kaizen #224 - Quote-driven Deal Reconciliation Using Zoho CRM Functions and Automation

  Hello everyone! Welcome back to another instalment in the Kaizen series. This post covers quote-driven deal reconciliation, emphasizing Functions and Automation to address practical sales challenges. Business Challenge Sales organizations often mark deals

• BARCODE PICKLIST

  Hello! Does anyone know how the Picklist module works? I tried scanning the barcode using the UPC and EAN codes I added to the item, but it doesn’t work. Which barcode format does this module use for scanning?

• Zoho Inventory - Allow Update of Marketplace Generated Sales Orders via API

  Hi Inventory Team, I was recently asked by a client to create an automation which updated a Zoho Inventory Sales Order if a Shopify Order was updated. I have created the script but I found that the request is blocked as the Sales Order was generated by

• How do I create an update to the Cost Price from landed costs?

  Hi fellow Zoho Inventory battlers, I am new to Zoho inventory and was completely baffled to find that the cost price of products does not update when a new purchase order is received. The cost price is just made up numbers I start with when the product

• Zoho OAuth Connector Deprecation and Its Impact on Zoho Desk

  Hello everyone, Zoho believes in continuously refining its integrations to uphold the highest standards of security, reliability, and compliance. As part of this ongoing improvement, the Zoho OAuth default connector will be deprecated for all Zoho services

• VoC in Zoho CRM is now data savvy: Explore response drilldown, summary components and participation in CRM criteria

  VoC has all the goods when it comes to customer intelligence—which is why we're constantly enhancing it. We recently added the following: A customer drilldown component that shows you the list of prospects and customers behind a chart's attribute Expanded

• How do I bulk archive my projects in ZOHO projects

  Hi, I want to archive 50 Projects in one go. Can you please help me out , How can I do this? Thanks kapil

• Passing the CRM

  Hi, I am hoping someone can help. I have a zoho form that has a CRM lookup field. I was hoping to send this to my publicly to clients via a text message and the form then attaches the signed form back to the custom module. This work absolutely fine when

• Can I add Conditional merge tags on my Templates?

  Hi I was wondering if I can use Conditional Mail Merge tags inside my Email templates/Quotes etc within the CRM? In spanish and in our business we use gender and academic degree salutations , ie: Dr., Dra., Sr., Srta., so the beginning of an email / letter

• Zoho Browser??

  hai guys, this sounds awkward but can v get a ZOHO BROWSER same as zoho writer, etc. where i can browse websites @ home and continue browsing the same websites @ my office, as v have the option in Firefox, once i save and close the browser and again when i open it i will be getting the same sites. If u people r not clear with my explanation, plz let me know. Thanks, Sandeep  

• Let’s Talk Recruit: LinkedIn Cheatsheet

  Welcome to the first edition of Let’s Talk Recruit for 2026. We are kicking off the year by revisiting one of the most asked about topics in Zoho Recruit. How our LinkedIn integrations actually work and how recruiters can get the most value from them.

• Zoho Forms API

  Is there any way to get all form entry list using API? Looking forward to hear from you

• Ability to Set Client Name During Portal Invitation

  Hi Zoho Team, We would like to suggest an important enhancement to the Zoho Creator Client Portal functionality. Zoho Creator recently introduced the option to set a client’s display name in the Client Portal settings, which is very helpful for creating

• Move email between inboxes?

  Is it possible to move emails from one team inbox to another? We would like to be able to have a single "catch-all" inbox for incoming requests, and then move the email to the appropriate department inbox. I was hoping we would be able to accomplish this

• PDF Attachment Option for Service Reports

  Hello Team, I would like to check with you all if there is an option to attach PDF documents to the service reports. When I try to attach a file, the system only allows the following formats: JPEG, JPG, and PNG. Could you please confirm whether PDF attachments

• 【Zoho CRM】データ一覧画面でのメモのバッジ機能リリースのお知らせ

  ユーザーの皆さま、こんにちは。コミュニティチームの藤澤です。2026年度もゾーホーユーザーコミュニティをどうぞよろしくお願いいたします！ 今回は「Zoho CRM アップデート情報」の中から、新機能のデータ一覧画面でのメモのバッジ機能をご紹介します。 目次 概要　メモのバッジ機能について メモの作成について メモに関する様々な処理について 最近追加したメモについて メモのバッジの非表示について クライアントスクリプトの対応 概要　 メモのバッジ機能について 既存の活動バッジに加えて、すべてのタブのデータ一覧表示画面に、各データごとに利用できる「メモのバッジ」（キャプチャ内の赤枠部分）が新たに導入されました。

• is it possible to add more than one Whatsapp Phone Number to be integrated to Zoho CRM?

  so I have successfully added one Whatsapp number like this from this User Interface it seems I can't add a new Whatsapp Number. I need to add a new Whatsapp Number so I can control the lead assignment if a chat sent to Whatsapp Phone Number 1 then assign

• Can’t find fsm in zoho one

  Every other app is available to me in Zoho one except fsm

• Posibility to add Emoticons on the Email Subject of Templates

  Hi I´ve tried to add Emoticons on the Subject line of Email templates, the emoticon image does show up before saving the template or if I add the Emoticon while sending an Individual email and placing it manually on the subject line. Emoticons also show

• Task Deletion Restriction & Strict Stage Control

  Hello Zoho Community, We have the following two issues currently pending and under testing, for which we require a workable and reliable solution: 1. Task Deletion Restriction We are testing ways to ensure that staff users are not able to delete tasks

• Unable to mass update a picklist field

  Hello, I have the records within our Accounts module divided between two account types: Parent Accounts & Member Accounts. I am attempting to mass update accounts from one picklist value to the other (within other specific criteria in our custom fields)

• Process checklist in CRM

  Hi We've created a new sales process that I'm mapping into the CRM - issue I have is that some of the tasks / milestones I would like to capture require very simple tick box responses but there are quite a few under a variety of sub categories so I don't

• CRM project association via deluge

  I have created a workflow in my Zoho CRM for closing a deal. Part of this workflow leverages a deluge script to create a project for our delivery team. Creating the project works great however, after or during the project creation, I would like to associate

• Holidays - Cannot Enter Two Holidays on Same Day

  I have a fairly common setup, where part-time employees receive 1/2 day's pay on a holiday and full-time employees receive a full day's pay. Historically, I've been able to accommodate this by entering two separate holidays, one that covers full-time

• Where is the settings option in zoho writer?

  hi, my zoho writer on windows has menu fonts too large. where do i find the settings to change this option? my screen resolution is correct and other apps/softwares in windows have no issues. regards

• Out of Stock items showing in Commerce

  I have over 6000 items and most are not in stock, but all items are showing up in Commerce whether they are inventory or not. What option or feature can you use to hide items in Commerce at zero or negative quantities? I currently am using Commerce for

• File emails in Shared email folder

  Hi, I am unable to allow users to collaborate in Shared email folders: User 1 shares a folder let's say "SharedTopic" with full permissions Users 2 and 3 can see this folder but are unable to add emails to this folder or search in this folder. For example,

• This user is not allowed to add in Zoho. Please contact support-as@zohocorp.com for further details

  Hi Team, when I,m trying to create a email account (imagixmidia.com.br) it's showing this error >>  This user is not allowed to add in Zoho. Please contact support-as@zohocorp.com for further details plz help me  thanks

• How to manage task lists in Zoho Desk?

  Hello, I use Zoho Desk for IT customer support. I have a list of standard operating procedures (SOPs), including SOPs for onboarding new users, offboarding users, losing a device, etc. These are lists of tasks to be performed depending on the situation.

• Convert Lead Automation Trigger

  Currently, there is only a convert lead action available in workflow rules and blueprints. Also, there is a Convert Lead button available but it doesn't trigger any automations. Once the lead is converted to a Contact/Account the dataset that can be fetched

• Default Tagging on API-generated Transactions

  If one assigns tags to an Item or Customer, those tags get auto-populated in each line item of an Invoice or Sales Order when one creates those documents. However, if one creates the Sales Order or Invoice via the API (either directly coding or using

• Next Page