Discounts

Discounts reduce the charges applied to a currency or asset balance and can be a fixed amount or a percentage of the charged amount.

In the context of discounts, charges are classified as follows:
  • Usage amount-independent charges — This includes non-usage charges, usage charges that are independent of usage amounts, and portions of usage charges that are independent of usage amounts. Both fixed and percentage discounts can be applied to usage amount-independent charges.
  • Usage amount-dependent charges — This includes usage charges that are scaled by usage amounts. Only percentage discounts can be applied to usage amount-dependent charges.

You can create discounts that are triggered by first-use of a balance, balance auto-renewal, subscriber usage, catalog item purchases, catalog item cancelations, suspended or resumed product offers, recurring cycle processing, balance threshold, and purchased item activation.

You can create flat-rate discounts, such as $5 off a monthly recurring charge, or more elaborate discounts based on a subscriber's balance quantity, usage quantity, or charge quantity. Typically, discounts based on a quantity type are defined as percentages so the discounted amount scales with the quantity.

Discounts based on a charge quantity are applied to the same balance that the charge impacts. For example, to create a purchase discount, a product offer that is valid during rating must contain a purchase charge.

To create a recurring discount, a product offer that is valid during rating must contain a recurring charge for a billing cycle, a balance cycle, or a purchased item cycle. A recurring discount component where Cycle is set to Any (any_cycle) can be applied to any recurring charge component having a billing cycle, balance cycle, or purchased item cycle. By default, the discount components from a product offer are applicable for the same product offer in the same purchased item. During configuration, you can enable enhanced hierarchy scope to apply a discount owned by a group to a charge owned by its members. For more information about enabling enhanced hierarchy scope, see the discussion about discount component selection.

For discounts based on the charge quantity, the quantity is the total charge calculated during rating, including charges from all product offers that were used—not just those in the product offer in which the discount was included. Only discounts associated with a specific recurring balance cycle, billing cycle, or purchased item cycle are evaluated. No other discounts are considered. ​A discount component for any recurring cycle type is always considered regardless of the cycle type being processed. Discounts triggered by cycle arrears processing apply to billing cycles only. For information about cycle arrears processing, see the discussion about cycle charges and discounts in arrears.

Discounts that get applied to the charge quantity can be applied to the original charges, before any other discounts are applied, or to the remaining charges, after other discounts have been applied. The original charge amount is the sum of all charges calculated for the event before any discounts have been applied. The remaining charge amount is the sum of all charges, minus any discounts that have occurred up to the point that this discount is run. You select the application method when defining the rate table for the discount.

You can also base discounts on a variety of object field values. The field can be in the network message or in the subscriber or device object. For example, a product offer might have a US dollar purchase discount equal to 10% of the value of an integer field supplied as part of the purchase. If the value of that field is 20, then a discount of $2 would apply. For discounts based on the charge quantity, the discount applies to all charges applied. For usage rating, the discount applies to all charges applied within the event segment and each segment is evaluated separately.

Any usage discounts defined in subscription or global offers might be used. The following process describes how discounts are evaluated and applied.
  1. Product offers with discounts are prioritized.
  2. The charges in the event segment are evaluated.

    The usage price component that is selected might be from a different offer than was used to rate the offer.

  3. Discounts are prioritized using the offer priority.

    The discount selected might be from a different offer than was used to rate the offer. The highest priority main offer that applies discounts and all supplemental offers that apply discounts are applied. This is useful, for example, if you want to apply a discount to all offers that a subscriber owns. You can create a supplemental offer with the discount that is applied to all offers.

  4. Steps 2 and 3 are repeated until the event is fully rated. Each event might use multiple components across multiple offers, with charges and discounts that are independent of each other. The first discount (or set of discounts) that satisfies the event is used.

For information about rating workflow, see the discussion about authorization and rating workflow.

You have the following options for applying the scope of a discount to a product offer:
  • Apply discounts to charges from the same product offer in the same purchased item.
  • Apply discounts to charges from the same purchased item; this can be multiple product offers with discounts in a bundle.
  • Apply discounts to charges from any purchased item at the same level in the hierarchy. This could be multiple product offers or bundles purchased by the same subscriber.
    • The charge owner and discount owner are the same.
    • Subscriber-owned discounts can affect subscriber-owned charges.
  • Apply discounts to charges from any purchased item at or below in the hierarchy.
    • The charge owner is at or below the discount owner in the hierarchy.
    • Group-owned discounts can affect subscriber owner charges.
  • Apply discounts to charges from any purchased item at, above, or below in the hierarchy.
    • The charge owner and discount owner can be at any point in the hierarchy.
    • Subscriber-owned discounts can affect group-owned charges.
  • Apply discounts to charges from the same purchase package. Discount components apply to any charges generated by the purchased items in that purchase package.
    • If a purchased item has a discount scope of purchase package but is not part of a package, it is treated as having the purchased item scope.
    • If there are multiple purchases in a multi-request, discount components from one purchase package are not applied to other purchase packages.

For information about applying the scope of a discount to a product offer, see the discussion about discount component selection.

Discounts are applied based on three groups organized by the Quantity Definition specified in the rating formula:
  • Applied First — None, usage quantity, balance value, field value, or charged amount (both percentage and fixed value) that applies to the original charge amount.
  • Applied Second — The charged amount that applies to the remaining charge amount and the percentage discount is not zero.
  • Applied Third — The charged amount that applies to the remaining charge amount and fixed discount is not zero.

Discounts are applied in order of this group list, but the discounts within each group are not applied in any specific order.

If there are multiple remaining charge percent discounts, they are not applied in any specific order, and they take the remaining charge from the previous remaining charge discount amount. For example:
  • The remaining charge is $10.00.
  • You have two remaining charge percent discounts: #1 = 10% and #2 = 15%
The final charge is $7.65 regardless of order.
  • If discount #1 is applied first, then $10.00 - $1.00 (10%) = $9.00. When discount #2 is applied, $9.00 - $1.35 (15%) = $7.65.
  • If discount #2 is applied first, then $10.00 - $1.50 (15%) = $8.50. When discount #1 is applied, $8.50 - $0.85 (10%) = $7.65.
Note:
  • Groups can provide offers for event rating and they can have credit limits that can indirectly impact rating through charges and discounts.
  • Recurring discounts in offers owned by a device can only apply to charges owned by that device.
  • You cannot apply a discount to a negative charge.
  • When applying a percentage discount to an original charge amount, the discount amount cannot exceed the charge amount. The amount exceeding the charge amount is reduced to 0.
  • When applying a fixed discount, the discount amount cannot exceed the usage independent charge amount. The excessive amount is reduced to 0. Fixed discounts are only applicable to usage amount independent charges, which can be either a fixed or variable charge scaled on anything except a usage amount. For example, it can be scaled on a charged amount, a balance amount, or a MATRIXX data container (MDC) field.
For more information about discount reductions, see the discussion about discount reductions in MATRIXX Pricing and Rating.

Event Detail Records (EDRs) that include discounts indicate from which product offer each discount comes. In the charge record list, there are elements for each discount applied. The UpdateType field is set to 2 for discounts. The charge record has an AppliedOfferIndex field which is an index into the AppliedOfferArray in the EDR. It references an element of this array that includes the ID, the external ID, and any custom data.