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When a customer purchases a recurring product that is under price protection, the subscription that is created will be under price protection for the term defined in the product. The system locks the cost and sell price of the product on purchase date and it uses these prices for calculating subscription's unit price on each subscription renewal or quantity change. This means that a protected subscription can be billed differently in every renewal if the subscription discount or the protected sell and cost price change. |
What Information is Kept in a Price Protected Subscription
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A subscription cannot be under price protection when you define your own unit price You can define your own unit price when you create an order or a subscription directly in Cloud BSS. In this case, the system will not set the subscription under price protection since this subscription will be billed always with the unit price you defined. |
For each protected subscription created in our system:
- We keep the cost and sell prices the product had on purchase date.
- We keep it when it's the price protection anniversary date.
- We calculate the subscription unit price using the protected prices
Changing the Pricing of a Price Protected Subscription
The pricing of a protected subscription can change with the following ways:
- Changing the subscription pricelist. From the "Edit Pricing Info" action you can change the price list of the subscription and you have the option to apply this change for the current or for the next billing cycle
- Changing the pricing rule of the related pricelist. By changing the pricing rule, the system will re-calculate subscription's unit price by applying the new rule using the protected sell or cost price.
- Setting a special discount. From the "Edit Pricing Info" action you can define a special discount for this subscription. In this case, the system will ignore the related price list (if exists) and it will calculate the unit price of the subscription by applying the discount to the protected sell price.
- Changing the protected sell or cost price. By changing these prices the system will re-calculate subscription's unit price using the new protected sell or cost price.
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You will not be able to change the price-protected prices or to remove the price protection if there are pending invoices for changes for subscription or add-ons quantity. In these scenarios, the option will be locked and a warning will be displayed:
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How a Protected Subscription is Billed
The final unit price of a protected subscription can change during the protected period. Our system handles the protected subscriptions similar to the non-protected subscriptions meaning that in each renewal or change quantity the unit price will be calculated based on the following rules:
- For subscriptions that are related with a price list that gives discount on sell price: final unit price = protected sell price * (1 - pricelist discount)
- For subscriptions that are related with a price list that has a cost mark-up: final unit price = (protected cost price * pricelist mark-up) + protected cost price
- For subscriptions that are related with a price list that has a margin mark-up: final unit price = protected cost price / (1 – pricelist margin)
- For subscriptions that are related with a special discount: final unit price = protected sell price * (1 - special discount)
- For subscription which are not related to a price list and they do not have a special discount: final unit price = protected sell price
So, the subscription final unit price can change if you perform one of the following actions:
- You change the pricing rule of subscription's pricelist
- You relate the subscription with a new pricelist
- You change the protected sell or cost price
- You define a special discount for your subscription
The graph below explains how the unit price of a protected subscription will change based on the above actions.
Removing a Subscription from Price Protection
From the "edit/remove price protection" link you can remove a subscription from price protection.
When a subscription is no longer under price protection, it will be billed using the product's current sell or cost price.
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The price protection is per subscription not per customer. This means that you can have two subscriptions for the same product for the same customer and for each subscription to have different protected price and different period. |