Web Hosting Talk : Web Hosting Main Forums : Running a Web Hosting Business : Paypal Subscriptions

[Wignalltech]

Hi,

Just wanted to know what everyone does when a customer decided to cancel their order but don't cancel their paypal subscription.

I have a customer who has been doing it for 5 months now. That totals to £30.

In our terms we say paypal subscriptions will not be refunded but credit will be added to the clients account to buy products from us.

Do you think this is right? As far as I know there is no way we can stop the paypal subscription unless someone knows how?

[Wullie]

Originally Posted by Wignalltech

Hi,

Just wanted to know what everyone does when a customer decided to cancel their order but don't cancel their paypal subscription.

I have a customer who has been doing it for 5 months now. That totals to £30.

In our terms we say paypal subscriptions will not be refunded but credit will be added to the clients account to buy products from us.

Do you think this is right? As far as I know there is no way we can stop the paypal subscription unless someone knows how?

Yes you can cancel it from either side and to be honest knowing it is still being paid and accepting it for a cancelled account is fraudulent. I realise this may not be the intention but in the end it is still unethical.

[SPINIKR-RO]

The problem with it is when you have a very large client base there is no automation to cancel the sub, and can easily lead to the provider not realizing it. Ultimately its the responsibility of the buyer but if you are just watching their subscription every month get deposited you really should contact them and cancel it... and probably refund it.

[Wullie]

Originally Posted by HC-Ro

The problem with it is when you have a very large client base there is no automation to cancel the sub, and can easily lead to the provider not realizing it.

I may be wrong but I seem to remember an API option to cancel subscriptions, although I don't think it worked on really old ones.

Originally Posted by HC-Ro

Ultimately its the responsibility of the buyer but if you are just watching their subscription every month get deposited you really should contact them and cancel it... and probably refund it.

This was my point earlier, obviously if you don't see it it's one thing but either way ethically you should still refund them when you notice or they bring it to your attention, not to mention they are very likely to chargeback if you don't refund anyway.

[V7Host]

You can manage all subscriptions through paypal and you can cancel it from your end.

It is ultimately the buyers responsibility to cancel the subscription but if you notice that they haven't, then you should cancel it from your end. I would also contact them and let the know.

[Wignalltech]

Thanks for the feedback. I will look into this. I will refund the customer with credit and I will cancel his subscription.

[HostXNow]

Yes, always refund those.

[cpoalmighty]

Originally Posted by Wignalltech

Thanks for the feedback. I will look into this. I will refund the customer with credit and I will cancel his subscription.

I honestly think that you should refund them with their actual money as opposed to credit because

1. The money was not 'overpaid' on an invoice since no invoices were generated
2. That client left your company so technically does not really have an account with you guys anymore

Ideally, you should only give credit if your client has an active account with you and they overpaid on a particular invoice. The credit you issue would then be used by your client for future invoices.

I think paypal foresaw the need for merchants to be able to cancel their client subscriptions based on the issue you are having and that is why we mainly 'monitor' a client's account for any subscriptions they have with us after they leave to ensure no unallocated funds enter our system. This creates a major problem around accounting times and can even make your company look as though you are involved in illegal activities.

It's best practice to notify the client of the transactions, issue them with a refund immediately afterwards, then cancel their subscriptions for them on your side, then monitor for another month or so to ensure everything went smoothly.

It may save you any negative reviews in the future because not everyone wants to hear that you will give them a credit onto their account when they have decided to leave you for good.

My 2cents

[JLHC]

You may consider refunding them but one issue that you may run in to is PayPal does not allow any refund after 60 days.

[TimothyH]

In my opinion, when one of your client retention team members are processing the cancellation request for a client, one of the steps within the cancellation procedure should be to check for and cancel any outstanding payment subscriptions. I understand this may take an extra few minutes, but it can easily prevent a lot of issues and customer dissatisfaction in the future.

[Wignalltech]

Ok thanks again all.

The issue was the client didn't actually cancel his order with us. He claimed to us that he wanted to cancel 5 months ago but forgot to cancel. We've had his website running for the past 5 months paying on a paypal subscription.

He emailed claiming that he wanted it cancelled but we use WHMCS and it is easy to cancel. Plus for the past 5 months he has never once put in a ticket or tried contacting us.

I have been really kind to him by offering a refund by credit because most companies would not offer a refund since his service was still technically active.

Sorry I should have explained it a bit better in my first post. I have just re-read over it and it seemed like the client had already cancelled his order.

[Jay H]

Originally Posted by JLHC

You may consider refunding them but one issue that you may run in to is PayPal does not allow any refund after 60 days.

Then, under these circumstances, use the "Send Money" option to send them their money.

Folks, this is a service industry and you're only going to do well if you provide a good service. Ensuring that you cancel a billing agreement between you and your customer for service they canceled pretty much goes hand in hand with providing a good service.

As others have stated, certainly ensure that one of your cancellation steps is to cancel a PayPal subscription if they paid using PayPal.

There are no terms in the world that will hold up in court for you taking someone's money for services not rendered, simply because a subscription was left active.

[HiVelocityKB]

In my mind, it is on the customer to cancel their subscriptions. Also, when you say in your terms that you will offer credit not refund, they should read that and understand how that works when signing up. Not to mention (as said earlier) paypal only does refunds within 60 days so you couldnt offer a refund for funds you cant even get back. Now, knowing what is going on, is it ethical (maybe not) but again its not up to you to manage their money for them.

Good luck!

[Wullie]

Originally Posted by HiVelocityKB

In my mind, it is on the customer to cancel their subscriptions.

If I leave a company that I pay by direct debit, it's on them to not take any further payments. I know Paypal subscriptions are slightly different but I'm sure it wouldn't be hard for a court to see them as similar if it ever came to that.

Originally Posted by HiVelocityKB

Also, when you say in your terms that you will offer credit not refund, they should read that and understand how that works when signing up.

Do you read, understand and remember every single term that you agree to when signing up for a service? If you cancel, would you still expect to be held under terms after that?

The contract should be taken to end when the customer cancels their services and the host processes it, so these terms are not really enforceable.

Originally Posted by HiVelocityKB

Not to mention (as said earlier) paypal only does refunds within 60 days so you couldnt offer a refund for funds you cant even get back.

Why would you need to get it back? If you are really bothered, refund them the amount minus the Paypal fees it took you to receive the payment.

Originally Posted by HiVelocityKB

Now, knowing what is going on, is it ethical (maybe not) but again its not up to you to manage their money for them.

Manage their money? This is nothing to do with this, this is to do with accepting payment for an account that is already cancelled. If the user cancelled you can be pretty sure they are not building this up for future use, they very likely don't know anything about it.

Just because Paypal can't process a refund, don't assume the card issuer will not process a chargeback on every single one of these payments. Is it really worth 5 - 10 chargebacks at one time because of this tiny amount that the OP isn't actually entitled to?

[larwilliams]

Originally Posted by Wignalltech

Ok thanks again all.

The issue was the client didn't actually cancel his order with us. He claimed to us that he wanted to cancel 5 months ago but forgot to cancel. We've had his website running for the past 5 months paying on a paypal subscription.

He emailed claiming that he wanted it cancelled but we use WHMCS and it is easy to cancel. Plus for the past 5 months he has never once put in a ticket or tried contacting us.

I have been really kind to him by offering a refund by credit because most companies would not offer a refund since his service was still technically active.

Sorry I should have explained it a bit better in my first post. I have just re-read over it and it seemed like the client had already cancelled his order.

It would be possible to create an addon that calls the PayPal API with the Subscription ID to cancel a subscription when a cancellation request is received or added for a service. In fact, if you check the WHMCS forums, there is one there called "PayPal Subscription Canceller" I think that does just that.