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  1. #1
    Join Date
    Oct 2006
    Location
    Florida
    Posts
    220

    What is a Pro-Rated refund and how is it issued?

    Title pretty much states it all ... I'd like to be a bit more enlightened on the subject

    Thanks

    -Sam
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  2. #2
    You get refunded on the unused portion of your service.
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  3. #3
    Join Date
    Feb 2006
    Posts
    665
    Say you charge $30 for one month of service. The customer uses 10 days of service, you are going to refund them 20 days of service. So $30/30 (charge/days in month) * 20 (unused days) = $20 refund.
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  4. #4
    Join Date
    Oct 2006
    Location
    Florida
    Posts
    220
    oh, simple. Do hosts generally issue those? Say a customer wants out 6 months into an annual contract.

    It seems ethically right, but idk. What do you guys suggest?
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  5. #5
    Join Date
    Jun 2003
    Location
    UK
    Posts
    6,616
    Ethically yes but also what do you TOS say? Why does the customer want out?
    Russ Foster - Industry Curmudgeon
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  6. #6
    Join Date
    Oct 2006
    Location
    Florida
    Posts
    220
    That was hypothetical, but I see exactly what you are saying.
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  7. #7
    Join Date
    Sep 2006
    Location
    Texas
    Posts
    38
    If you have it explained cancellation terms in your TOS or agreement when they signed up, then follow what you promised at that point. If not, and the customer wants out because of a bad experience with your service, I would suggest making it as easy and problem free as possible - they are already dissatisfied, anything more will make their opinion of you twice as bad.

    I've canceled services before with companies I had problems with, and some of them I'd honestly reccommend again in the right situation because of their customer service - other cases I've cancelled at no fault of the provider but would never reccommend them because of their poor service and bad attitude.

    All that being said - something like this should be spelled out in your TOS. Most companies will offer pro-rated refunds in addition to any fees they would have had to pay if they had gotten the smaller account. For example, a 6 month plan has a $25 setup fee, while the 12 month has no setup fee - if they cancel after 6 months, offer them a prorated refund, minus the setup fee.
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  8. #8
    Join Date
    Feb 2005
    Location
    Minnesota
    Posts
    973
    You should only offer refunds on yearly prepays if the client has a problem and it cannot be correct. Then offer a refund on the remaining balance and help them with the transition to the new provider even if you feel the problem was caused by them it keeps any bad feedback of your company from being spread about.
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