Billing creditsPublic preview

Use credit grants to offer billing credits to your customers in your business workflows, such as the following:

• Prepayment: Grant billing credits to your customers that they can use to pay for usage-based products or services, such as memberships, pay-as-you-go plans, subscriptions, or specific products or services.
• Promotional offering: Grant billing credits for free to your customers as a promotional offering. Businesses often offer a limited amount of promotional credits, and typically with an expiry date.

The following diagram shows how billing credits work with usage-based billing:

Use cases for billing credits

Refer to the following guidance for using billing credits.

Approved uses

• You can issue billing credits to your customers either for free or for a fee.
• Your customers can use billing credits to pay for memberships, pay-as-you-go plans, subscriptions, or specific products or services that you offer.

Prohibited uses

• You can’t issue billing credits as gift cards or gift certificates. Also, you can’t allow your customers to spend billing credits on, or exchange billing credits for, gift cards or gift certificates.
• You can’t offer billing credits as stored value to your customers. That means you can’t grant any billing credits that aren’t intended for spending on memberships, pay-as-you-go plans, subscriptions, or specific products or services that you offer.
• You can’t allow your customers to use billing credits for payments to third parties. For example, you can’t allow them to apply billing credits to purchases on the website or platform of another business.
• You can’t link billing credits to digital wallets, or allow your customers to do so. For example, you can’t allow your customers to add billing credits to a digital wallet, such as Apple Pay or Google Pay.

Credit grants

A Credit Grant tracks a set of prepaid or promotional billing credits allocated to a customer. Credit grants have the following states:

Credit grant eligibility

You can apply credit grants to invoices if all of the following are true:

• The invoice’s period_end is on or after the credit grant’s effective_at time.
• The invoice’s period_end occurs before the credit grant’s expires_at time, if set.
• The credit grant has an available balance when the invoice finalises.
• The credit grant’s currency matches the invoice currency.

You can only apply credit grants to subscription items that use metered prices and report usage through Meters.

You can’t apply credit grants to:

• One-off invoices that weren’t created by a subscription.
• One-time invoice items which are added to a subscription’s previewed invoice, such as an initial setup fee.
• Line items on subscription invoices that use licensed prices.
• Line items on subscription invoices that use metered prices but report usage through legacy Usage Records.

Apply credit grants

You can apply credit grants to subscription line items that link to a meter price. Credit grants apply to invoices after discounts, but before taxes and the invoice_credit_balance.

Price-level applicability

When creating a credit grant, you can configure the applicability scope to specify a list of metered prices to which a credit grant can apply. If the price on a subscription item matches one of the credit grant’s applicable prices, then the credit grant could apply to that item.

Multiple invoices or line items

If you can apply a credit grant to multiple invoices, the credit applies first to the invoice that finalises first. Because subscription invoices finalise independently as soon as they’re eligible, we can’t guarantee the finalisation order.

If you can apply a credit grant to multiple lines on the same invoice, the credit applies to the lines in the order they appear on the invoice.

Multiple credit grants

If you can apply multiple credit grants to an invoice or line item, they’re prioritised as follows:

1. Priority: Credit grants with higher priority (lower number indicates a higher priority) apply first.
2. Expiry date: Credit grants with earlier expires_at timestamps apply first.
3. Category: Credit grants with the promotional category apply first.
4. Effective date: Credit grants with earlier effective_at timestamps apply first.
5. Created date: Credit grants with earlier created timestamps apply first.

Preview, draft, or finalised invoices

Credits apply to invoices only at the time of finalisation. If you apply credits to a preview or draft invoice, those credits might change if a finalised invoice uses them first.

Example 1: At the end of a cycle, the same set of credits appear on both a draft invoice and a preview invoice. When finalised, the draft invoice uses the credits. The preview invoice adjusts to accurately reflect any remaining credits from the credit grant.

Example 2: A customer has multiple active subscriptions and the same set of credits appear on a preview invoice for all of the subscriptions. If there aren’t enough credits to apply to all the subscriptions when the invoices finalise, only some invoices receive the credits. If you use billing thresholds, they might trigger later than expected because of the credits that apply to multiple preview invoices.

Credit balance summaries and transactions

The Credit Balance Summary shows the following for a customer:

• Ledger balance: The balance amount reflects the billing credit balance after recording all relevant account ledger transactions. A credit grant is backed by an immutable, append-only ledger.
• Available balance: The billing credit balance available for the customer to use. This amount is equal to the ledger balance less any expired credits or unrecorded transactions.

A Credit Balance Transaction includes the credits and debits that impact a credit grant. For example, you might see a credit transaction for initial funding of the credit grant, or a debit transaction for a credit grant on an invoice.

Void invoices and issue credit notes

The following is true if you void invoices and issue credit notes:

• Voiding an invoice with credits applied reinstates the applied balance to the credit grant. If the credit grant is past the expiry date, the reinstated credits expire immediately.
• Issuing a Credit Note doesn’t refund credit grants applied to an invoice. To restore those billing credits, you must create a new credit grant.

Unused credit grants limit

Customers can have up to 20 unused credit grants at a time. If you issue a credit grant after this limit, the request fails with an error message stating the max limit. A credit grant is unused if it has a future effective date or a positive balance.