Should all SaaS cancellations be prorated?

In the world of SaaS and monthly subscriptions, many services offer a discounted annual subscription option. If you look closely most of the annual subscriptions do not have a refund option, if you cancel. They also auto renew until you cancel. So, if you fail to cancel your service before the renewal date, you will end up paying for a whole year of services you no longer want.

While this makes financial sense for the SaaS provider, it does not work for the user. SaaS solutions try hard to hide that cancel button. Some encourage you to pause the subscription. Many, like MYOB, make it harder for you to cancel and ask you to call them and don’t offer email support with cancellations.

SaaS companies can refund fees prorated (minus discounts) on cancellation. There are some offers and special deals that can have an exception however for the majority of the users, all standard plans should default to this refund policy.

Given the state of innovation and competition, There is also an opportunity available for SaaS providers to charge an extra fee for having this option on cancellation 🙂

Published by jeylabs

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