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Setting up Recurring Payments

If you want to sell products using subscriptions, you need to define a subscription setup fee and a recurring billing plan for each of these products.


To define a subscription setup fee for a product:

1. Find the product for which you want to set up a recurring billing plan. Open this product for modification in the ' Product Management' section.
2. Enter the desired setup fee into the ' Price' field.

 

To set up a recurring billing plan for a product:

1. Find the product for which you want to set up a recurring billing plan. Open this product for modification in the ' Product Management' section.

2. Click the Subscriptions link in the ' Product Management' section menu. ' Subscription' dialog box will be opened.

3. Complete the fields of the ' Subscription' dialog box:

a) Specify the frequency at which a customer's account should be charged:

Select Annually , Quarterly , Monthly or Weekly from the 'PAY PERIOD' drop-down box, or
Select By period from the 'PAY PERIOD' drop-down box and enter your own period into the field below. The period must be specified in days .

b) Specify a period fee - an amount that will be charged to a customer's account per period. For example, if  a monthly payment must be $20, you should enter 20.00 into the 'PERIOD FEE' field.

c) Use the 'COST OF ONE DAY' field to specify how much it will cost to use the product for one day.

d) Use the 'DAYS SAME PERIOD' field to specify the number of days in the period specified in the 'PAY PERIOD' field.

Note : Adjusting the 'COST OF ONE DAY' and 'DAYS SAME PERIOD' fields enables your customers to sign up for recurring billing plans at any time, without having to wait till the beginning of the next pay period.  For example, say you would like to set up a recurring billing plan for a certain product so that regular payments of $20 are taken from the accounts of customers who purchase this product monthly (say, on the 10th day of the month). You set the PAY PERIOD field to Monthly and the 'PERIOD FEE' field to 20.00. Assuming the product's setup fee is set to 0.00, a customer who signs up for the recurring billing plan on May 10th will be supposed to pay $20 at once, then another $20 on June 10th, then $20 on July 10th and so on.


Now think of a situation where a customer comes to your store on May 1st and signs up for the recurring billing plan. How much is this customer supposed to pay? It does not seem fair to charge him the full period fee amount of $20 on May 1st, as he will be supposed to pay $20 again in just 10 days. Subscriptions module helps you handle this situation using the values of 'COST OF ONE DAY' and 'DAYS SAME PERIOD' fields. As his first payment, the customer who signs up for the recurring billing plan 10 days before the established pay date will only be charged for the time he uses the product in the current period (10 days). To find out how much money the customer is supposed to pay for 10 days, Subscriptions module will multiply the cost of one day of using the product (the value of the 'COST OF ONE DAY' field) by the number of days before the next pay period (the value of the 'DAYS SAME PERIOD' field). In our example, the cost of one day is $20.00 (period fee) / 30 days (the average number of days in a month) = $0.666667; the number of days before the next pay period is 10. This means that the cost of using the product for 10 days before the next period is approximately $6.67


The sum that will be charged to your customer's account on May 1st will be calculated according to the formula 'setup fee + cost of using the product for 10 days' ($0.00 + $6.67) and will equal $6.67.

4. Click on Apply. Pay dates button will appear.

5. Click the Pay dates button. Use the calendar to select the dates on which payments will be supposed to be taken.

 

You might want to accept the dates offered by the program or select different dates. All the selected dates can be unselected with one click (use the Reset to empty button). To select a pay date, click on the appropriate date in the calendar. The date will be highlighted. To unselect a date, click on it once again. You will be able to return to the first variant offered by the program at any time by clicking on Reset to... ( your pay period ) button. As soon as you are satisfied with your payment schedule, click on Update.

 

To delete a recurring billing plan:

1. Find the product whose recurring billing plan you want to delete. Open this product for modification in the ' Product Management' section.
2. Click the Subscriptions link in the ' Product Management' section menu. ' Subscription' dialog box will be opened.
3. Click on the Delete button at the bottom of the ' Subscription' dialog box. The dialog box fields should be cleared.