Prepaid and Pay as You Go Subscriptions Explained (Essential Subscriptions app)

Every subscription option in a campaign is one of two billing types. Picking the wrong one is the most common setup mistake, so here is exactly what each does.

You choose it in the campaign, on the Settings tab, inside a subscription option, under Billing policy.

Pay as You Go

The customer is charged on a repeating schedule, and each charge creates an order.

• Deliver every sets how often an order is created.
• Bill every sets how often the customer is charged, in the same unit.
• The subscription renews until the customer cancels, or until the number of payments you set in Subscription expires automatically after is reached.

Use it for the normal case: a monthly coffee subscription, refills every 8 weeks, and so on.

Pay as you go is the only type that supports:

• Charge on a fixed weekday or day of the month
• Subscription expires automatically after a number of payments
• Customers can cancel after a minimum number of payments
• Change discount after a number of payments
• Delivery frequency changes offered in the cancellation and pause surveys

Prepaid

The customer pays once, up front, for several deliveries.

• Deliver every sets how often a delivery goes out.
• Charge for sets how many deliveries that single payment covers.

For example, deliver every 1 month and charge for 3 deliveries means one payment covering three monthly deliveries.

Prepaid means already paid. There is one charge and one order at purchase, then the remaining deliveries are attached to that order. As each delivery date arrives it becomes ready to fulfil and you ship it. No new order and no new charge each month.

A prepaid plan sold through your storefront does not renew by itself. When the term ends the subscription expires, and the customer subscribes again if they want to continue.

Prepaid does not support Charge on, the expiry setting, the cancel-after setting, or a discount that changes after a number of payments. Those fields do not appear when you pick Prepaid, and they are ignored if you set them elsewhere.

Note: A prepaid subscription created by hand on the Create subscription page behaves differently from one bought through the widget. Contact support before creating a prepaid subscription that way. See How to Create a Subscription for a Customer Manually.

Monthly and Yearly Options in One Campaign

This is the most common request, and it is easy to get wrong.

To offer "monthly" and "one year up front":

Set Deliver every to 1 month on the yearly option, not 1 year. Prepaid multiplies the delivery frequency by the number of deliveries. Deliver every 1 year and charge for 12 gives you one payment covering twelve years.

"1st charge will be for 1 month"

Under the billing fields, pay as you go options show a line like 1st charge will be for 1 month or 1st charge will be for 40 days. It is a plain-language summary of Deliver every and Bill every together, not a separate setting. Change those two fields and the line changes with them.

What Prepaid Customers Receive by Email

Because there is no new order each month, there is no monthly order confirmation. Over a prepaid term the customer gets the Shopify order confirmation once at purchase, a shipping notice for each delivery if you have those on, the subscription confirmation from this app once, and the upcoming charge reminder before each charge. The full table is in Migrating to Essential Subscriptions from Another Subscription App.

What You Cannot Do With a Prepaid Subscription

Once a prepaid subscription exists, its Edit policy button is not shown, and its products cannot be edited. The customer has already paid for deliveries they have not received, so the plan is fixed. Pay as you go subscriptions can be edited while they are active or paused.

Installments Are Not Subscriptions

Splitting one product into four monthly payments is not possible with this app. A subscription charge creates an order and a fulfilment request each time, so four payments would ask you to ship four times. For payment plans on a single item, look at a Shopify buy-now-pay-later option instead.