Avoid charging for overlapping billing periods when pausing a subscription
When pausing subscriptions, past due renewal transactions are now automatically canceled. This means past due transactions for uncompleted billing periods are not automatically collected on resume.
What's new?
We've updated the Paddle platform so that past due renewal transactions are automatically canceled when a subscription is paused.
There are no changes to endpoints or fields in the API as a result of this change — it's an update to the way Paddle handles pausing subscriptions.
This change is rolling out now in stages. It'll automatically be enabled on your Paddle accounts over the next few weeks.
How it works
You can pause a subscription when customers want to take a break and come back later.
When paused subscriptions are resumed, a new billing cycle starts. This means that the current_billing_period.starts_at for the subscription is set to the resume date and time, and Paddle creates a transaction to collect for the new billing period.
If Paddle successfully collects a payment for a transaction, it also attempts to collect for any previous past due transactions. This is generally desired behavior because it makes sure all owed revenue is received and keeps customer accounts accurate.
However, since a new billing period starts on resume, collecting for previous past due renewal transactions may result in charges for two overlapping billing periods, including the period when the subscription was paused.
With this update, Paddle automatically cancels past due transactions for subscription renewals when pausing. Subscription renewal transactions have the origin of subscription_recurring. Other kinds of past due transactions related to a subscription, such as one-time charges (subscription_charge) or recurring items billed immediately (subscription_update), are not canceled.
Summary
Before
Subscription paused
Past due subscription paused by Paddle Retain, or using the Paddle dashboard or the API.
Subscription resumed
Paused subscription resumed using the Paddle dashboard or the API.
New transaction created
A new billing period starts for the resumed subscription, and Paddle creates a transaction to collect payment.
Payment collected successfully
Paddle collects for the transaction created for the new billing period, and for any past due renewal transactions.
After
Subscription paused
Past due subscription paused by Paddle Retain, or using the Paddle dashboard or the API.
Past due renewal transactions canceled — new
Past due renewal transactions are canceled when pausing.
Subscription resumed
Paused subscription resumed using the Paddle dashboard or the API.
New transaction created
A new billing period starts for the resumed subscription, and Paddle creates a transaction to collect payment.
Payment collected successfully
Paddle collects for the transaction created for the new billing period. There are no past due renewal transactions to collect payment for.
Next steps
This change is rolling out now in stages. You don't need to do anything to get this change — it'll automatically be enabled on your Paddle accounts over the next few weeks.
There are no changes to endpoints or fields in the API as a result of this change — it's an update to the way Paddle handles pausing subscriptions.
You can pause or resume a subscription using the API or Paddle dashboard.
