Cancel Proration

When product offers or bundles are canceled, the charge and grant amounts from the most recent recurring charges and grants in the product offer can be refunded or forfeited, respectively, depending on the cancelation proration setting in the product offer.

For prorated cancelations, the scaled amount is calculated by dividing the cycle period according to a granular unit based on the cycle length and only refunding or forfeiting for the amount of time the product offer was not owned during that cycle. As with purchase proration, for cycles defined in hours or days, the granular unit is seconds. For cycles defined in weeks, months, or years, the granular unit is days.

For more granular proration on scaled charges and grants, answer the proration scale unit create_config.info question: Global:What should be the proration scale unit when weekly, monthly or yearly recurring charge/grant are to be prorated (second/minute/hour/day)?. For more information, see the discussion about proration granularity.

The cancelation proration setting for charges is identified in My MATRIXX as one of the following options:

Refund Full Amount — The full charge amount is refunded.
Refund Prorated Amount — (Default) The charge amount that is refunded is scaled according to the portion of the cycle during which the product offer is canceled.
Refund Nothing — No charges are refunded.
Refund Forfeiture Based Amount — The charge amount that is refunded is scaled according to the unused amount of one specific recurring grant during the portion of the cycle the product offer was owned and valid. For example, if a subscriber forfeits 90% of that grant, they should be entitled to a 90% refund of the charge. With this refund option, if the used grant amount is greater than or equal to the amount granted with the charge, the charge amount refunded is 0. If the used grant amount is less than the amount granted with the charge, the cost associated with the unused grant amount is refunded to the balance in increments defined by a specified Refund Proration Granularity. This configures the refund to occur according to used asset portions, similar to rating beats. For example, 1024 kilobytes means all granted kilobytes are divided into 1024KB portions, with any remaining amount forfeited. From the whole 1024KB portions, if any amount of a portion is used, the entire portion is considered used and, the charge amount associated with that entire portion is not refunded. Only the charges associated with the remaining unused portions are refunded. If there are multiple charges, to separate balances, each balance is refunded a percentage equal to the percentage of the grant forfeited. For example, assume an offer's recurring charges had charged $2 from one balance and $3 from another, for one recurring grant of 5GB. If cancelation forfeited 4GB of the 5GB grant, or 80%, then the forfeiture-based refund would return 80% of each charge (80% of $2 ($1.60) into the first balance and 80% of $3 ($2.40) into the second balance).
If you use this refund option, in Refund Proration Grant, select the associated grant and in Refund Proration Granularity, enter the divisor and measurement unit. The granularity unit must be compatible with the grant unit. For example, a 2GB grant can have granularity measured in bytes or kilobytes, but not in seconds or minutes. In addition, if forfeiture-based proration is used on both cancel and suspend operations, they must refer to the same grant and have the same divisor and units.
Note: If you want to prorate more than one grant, you must put each grant in a separate offer.

The cancelation proration setting for grants is identified in My MATRIXX as one of the following options:

Forfeit Prorated Amount — The grant amount that is forfeited for the final cycle is inversely scaled according to the portion of the cycle the product offer was owned/valid.
Forfeit Full Amount — Any unused amount of the granted assets are forfeited.
Forfeit Nothing — Forfeit no granted assets.
Forfeit Consumption Based Amount — The forfeited grant amount is based on the amount of assets a subscriber used from the amount granted with the offer being canceled. If the used amount is greater than or equal to the granted amount, the amount removed from the grant balance is the granted amount. If the used amount is less than the granted amount, the used amount is removed from the grant balance. If the same subscriber or group owns both the G/L balance and the offer that grants into it, consumption-based forfeiture for that subscriber or group tracks the amount granted by that offer, the amount granted by all offers, top-ups, and so forth (by using the credit floor), and the amount remaining. This information is used to forfeit the unused amount. If a subscriber grants to a shared group G/L balance, consumption-based forfeiture uses this information and the current value of a subscriber's virtual balance to determine how much was consumed by all subscribers and by the subscriber who canceled the offer and forfeits the subscriber's unused amount.
If you configure this grant cancel proration type and the owner of the asset balance is a group, it requires advanced configurations of product offers, grants, and balances. You must create two G/L balances: one that has the amounts granted to each subscriber (in the Total Contribution field) and one that is the shared G/L balance to which the assets are granted and forfeited (in the Shared Asset field). Then you must identify these two balances when setting the refund proration properties.

You can override the cancel proration type using the CancelDataArray field in the following SubMan APIs:

MtxRequestDeviceCancelOffer
MtxRequestGroupCancelOffer
MtxRequestSubscriberCancelOffer

For more information about these SubMan APIs, see MATRIXX Subscriber Management API.

Important:

Consumption-based proration requires advanced pricing configuration. Contact your MATRIXX representative when setting up this type of proration. Group scenarios have the following restrictions:

Both balances must be periodic, align with the same billing cycle, and use the same balance units.
The balances cannot be the same.
For groups scenarios:
- The product offer purchased must have a recurring grant to the Total Contribution balance.
- The grant must have a scale basis of Balance Amount, from the previous balance entry period of the Total Contribution balance to the current balance entry period of the Shared Asset balance.
- The product offer purchased by the subscriber must have a recurring grant to the group's Total Contribution balance and must have the cancelation proration type set to Forfeit Consumption Based Amount.
- The product offer purchased by the subscriber must have a charge component that removes assets from the Shared Asset balance.

The Refund Prorated Amount and Forfeit Prorated Amount options are calculated the same way as for purchase proration. The ratio of the number of granular units the product offer owns (inclusive of the purchase day or seconds) to the total number of granular units in the cycle is multiplied by the total amount. This result is then subtracted from the total amount to determine how much to refund or forfeit:

Prorated amount = (number of granular units owned ÷ number of granular units in the cycle) × total amount 
Refunded amount = total amount – prorated amount

If a product offer is canceled in the same cycle in which it is purchased, the scaled proration is handled differently. In this case, the proration depends on the purchase proration option applied during the purchase operation. If the purchase proration type is set to full, and the cancel proration is set to refund prorated amount, the product offer is treated as if it were purchased at the start of the cycle regardless of when it was purchased; the refunded prorated amount is not based on the time the product offer was owned, but on the time since the start of the cycle.

Refund Consumption Based Amount refunds the unused allowance granted by a product offer that is being canceled. If the charged amount is greater than or equal to the granted amount, the subscriber receives a refund up to the granted amount. If the charged amount is less than the granted amount, the charged amount is refunded to the subscriber.

Forfeit Consumption Based Amount forfeits the unused allowance granted by a product offer that is being canceled. The forfeit is based on the amount of assets used from the amount granted in the offer. When the product offer that is granting the assets is purchased by a group or group member, the assets are applied to the group's G/L balance, which holds the total contributions from all subscribers and the group. As a subscriber uses the assets, they are removed from the subscriber's shared asset balance, which roll up to the group asset balance. When the subscriber cancels the product offer, only the amount that was granted with the offer, and not consumed by the subscriber canceling the offer, are forfeited. If the used amount is less than the granted amount, the granted amount minus the used amount is forfeited from the group. If the used amount is greater than or equal to the granted amount, no assets are forfeited. Any other assets granted to the group's G/L balance by another offer are not considered.

Product offers also have an Offer Cancel Type value that influences how the proration setting behaves when a product offer is canceled. The Offer Cancel Type can be Immediate, Billing Cycle, Balance Cycle, or Purchased Item Cycle.

Immediate invalidates the product offer for rating immediately when it is canceled. All cancelation pricing is applied, the product offer is removed from the subscription or group, and no further rating of the associated balances can occur. Any remaining balance amounts are either refunded or forfeited, based on the proration settings. If a cancelation notification is configured, it is sent.
Note: When the Offer Cancel Type is not set to Immediate, the following settings in the Proration tab are set and cannot be modified:
- The Cancel Proration Type option in Charge Proration Settings is set to Refund Nothing.
- The Cancel Proration Type option in Grant Proration Settings is set to Forfeit Nothing.
- The Cancel Proration Type option in Charge in Arrears Proration Settings is set to Charge Full Amount.
Billing Cycle, Balance Cycle, and Purchased Item Cycle apply all cancelation operations immediately but leave the product offer valid until the end of the current cycle. This makes the product offer valid for usage rating until the cancel end time so subscribers can use any assets or currencies in the balances associated with the product offer. Therefore, no proration pricing is applied (nothing is refunded or forfeited) and the balance is available for use until the end of the current period of the current cycle. Also, first-use pricing and recurring pricing are not valid during the cancelation period. For on-demand balances, no more entries are created after the current (in-cancelation) entry.

Note: An in-cancelation status in MtxPurchasedOfferInfo indicates that an offer that is configured to end at the end of the current period has been canceled and is in the interval to end the period. If an offer is in a suspended state and it passes the provisioned end date, the offer state becomes inactive. Inactive indicates the offer end date has passed, either from cancelation or by setting the end date during provisioning.

For product offers that are canceled at the end of the current balance cycle, the end times of all valid, required simple balances and periodic balance entries associated with the offer are examined. The end time with the latest expiration date is used, which drains the remaining balance amount up to the cycle end time. If a valid balance does not have a validity end time, it is ignored for the calculations. If no valid balances have an end time set, the cancelation occurs immediately without proration.