- Prepaid subscriptions give subscribers the option to pay for all of their shipment upfront
- Example: If a subscriber buys a 3-month subscription, they’ll pay for the full 3 months on the 1st order and then have 2 $0 shipments for month 2 and month 3
- This is a great way to improve retention and lock in revenue for loyal subscribers
What is it?
Prepaid subscriptions are unique from the default subscription type and give you more flexibility and control to customize your subscription offering. Unlike a typical subscription where a customer pays for the order, it's processed and then shipped, prepaid subscriptions allow your customers to pay for all the shipments upfront.
Here’s a good visualization on how renewals work:
Why should I use it?
Prepaid shipments are a great way to incentivize customers to pay upfront for subscription orders they already intend to buy. This results in a commitment to the subscription interval and guarantees a better retention rate while locking in the revenue on their first purchase.
If you’re wanting to get more creative, you could start to use our prepaid subscription feature as a way to facilitate a membership-style subscription program. Since subscribers would pay upfront, you could allow them to swap the product on prepaid shipments to other flavors. Instead of a standard trial pack that automatically converts to a more expensive variant, why not use prepaids to flip the script by getting customers to commit upfront for a more customized experience on subsequent orders. For example, merchants that offer daily consumable products (eg. supplements) typically run into retention issues because the customer doesn’t “feel the effects” soon enough and so they cancel. With a prepaid subscription, you can set the expectation that it takes a 3 month commitment to get full results and after the first month the customer can easily swap the flavor or edit the next shipment date to better match their consumption with their order frequency.
How do I set it up?
- In the Skio Dashboard, go to Products
- Click Add Product
- Choose the product in the list you'd like to add a prepaid subscription to.
- Click Add prepaid subscription plan
As an example, let’s say you want to offer the option for your customers to pay upfront and bill the customer every 4 weeks and have the subscription delivered every 1 week. You can also indicate the verbiage on the option label. In this case, it reads “4 weeks prepaid, delivered weekly.”
Click Save once you’re happy with the settings for your product. Previewing the product, you’ll see that the Prepaid option is now available on the listing:
During the checkout phase, you'll see that it notifies customers that they will be billed for the duration on their prepaid subscription:
When a prepaid order is placed from a customer, it will show the upcoming prepaid orders for the subscription within the Skio dashboard:
On Shopify's order page, it will also indicate that it's a prepaid when viewing the information on the customer's subscription.
Skipping prepaid orders
If a customer wants to skip their upcoming order, they can do so by clicking on the Skip button within their dashboard. It’ll prompt a message indicating to confirm the delay of the next delivery date:
When this happens, the page will now be updated to reflect the next upcoming order and an updated list of dates for the schedule. In this example, the next charge date for the prepaid subscription will be on May 5. The upcoming orders in the renewal period have now shifted over to a later week:
Creating prepaid when a product has multiple variants
If you have a product that has variants, you can also choose to have certain variants to be set up for prepaid subscription plans.
- Yes! Subscribers can add one-time add-ons to their prepaid subscription and they will be charged when the order processes via the card on file
- Important note: If the payment method fails because of the add-on being billed, the prepaid subscription can cancel if the dunning limit is reached and the prepaid $0 shipments will not be sent.
Can the subscription continue for the customer after the prepaid period?
- Yes! If you wish for the subscription to not auto-renew after the prepaid period, you can set the number of max intervals to equal the number of intervals in the prepaid period.