You are able to add contract terms to your products with minimum & maximum commitments, fixed terms and grace cancellation periods.
The main use of this feature is to allow you to enforce minimum commitment terms on your product(s) and prevent a customer from cancelling within a certain period.
- Grace cancellation provides a window of time where a customer can cancel without incurring any cancellation fees, for example. This might look like a 45-Day Money-Back Guarantee.
- Minimum commitments allow you to create interesting offers that benefit you and your customers for the long term.
- Maximum commitments allow you to automatically stop billing the customer after a certain time period is reached
- Fixed contracts gives you additional flexibility to create contracts that run for a certain amount of time, can't be cancelled and automatically expire.
Contract terms on products are available for monthly billed products in Product as a Service type projects (meaning your customers are subscribing to a plan).
You can find contract terms all the way the bottom when creating a new product or editing an existing one.
When a customer signs up for a contract with a 6-month commitment, they will not be able to cancel their subscription within that period after their subscription is activated. Only someone from your team will be able to force cancel a committed contract during this period.
Your customer can cancel their subscription(s) at any moment within the grace cancellation period (see next) or at any moment outside of their commitment.
Please note: Customers become eligible to cancel their subscription(s) 2 weeks prior to the end of their minimum commitment period to provide a "cancellation window" before the next billing cycle.
The grace cancellation period
The grace cancellation period is used to allow for offering various types of return policies or sales guarantees. For example if you want to offer a 30-day money-back guarantee or are required to offer a right of withdrawal according to local e-commerce legislation.
Once the maximum commitment period is reached the customer will not be billed anymore for this product. The plan a customer is subscribed to will remain active.
You can achieve this by setting the minimum terms to be the same as the maximum terms. Example: To create a fixed contract that runs for exactly one year, expires afterwards and can't be cancelled within that time set the minimum and maximum terms to 12 months.
When do contract terms get applied and when does a term start?
Contract terms are stored as soon as a subscriber signs up. However, the actual term only starts once the subscriber is activated.
Does the minimum commitment timeline start after the grace cancellation period has ended?
No, minimum commitment and grace cancellation periods are independent from one another and their timelines both start at the moment of customer activation.
For example, if you set up contract terms for your product with a minimum commitment of 1 year and a grace cancellation period of 2 months, your customers would be eligible to cancel their subscription for the first 2 months and then not for 10 months after that.
Changes in product contract terms apply to *new* signups
At the moment, you can disable/enable or modify the products' configured contract terms at any time. The changes will then only be applied to new subscribers signing up.
Manually adding and removing products
If you manually remove a product from a customers subscription its contract terms will be removed as well. Manually adding a product will recalculate the terms from the day the product got added but you are able to adjust that date.
Products that are part of a plan will inherit the plans contract terms
A products contract terms will be ignored in case it is part of a plan. Instead, the plans contract terms are applied.