When you’re creating or modifying a membership or modifying an individual client’s membership, you can apply one of the three hold types available in the membership advanced settings: Classic, Prorate, or Continue Billing. The selected hold rule will be applied when the membership is placed on hold.
The Classic and Prorate rules behave differently depending on whether the membership’s scheduled payment occurs within the hold period. If a membership with no scheduled end date is placed on hold, the next payment date remains unknown until the hold is removed from the membership. All the examples in this article assume that the membership is set to auto-renew and that all holds starting on the day of the scheduled payment were requested before that day.
For your imported memberships, ensure your clients’ payment schedules and any membership hold rules are configured to your liking.
In this article:
Hold rule: Classic
When applied, this membership hold rule extends the length of a membership contract by the duration of the hold period. This means that if a membership is placed on hold for three days, the membership is extended by three days. When a membership is placed on hold, its scheduled payment dates are moved forward the same number of days as the duration of the hold period. The behavior of this hold rule depends on whether the hold period begins on the date of a scheduled payment.
Hold period does not begin on a scheduled payment date
If the hold period does not start on a scheduled payment date, the next scheduled payment is moved forward the same number of days as the duration of the hold period.
Example:
A client has a monthly membership with scheduled payments of $100/month, billed on the first of every month. The client decides to place the membership on hold for three days (January 3rd, 4th, and 5th). The hold does not start on a scheduled payment date.
As shown in the figure above, the client is billed for the membership’s full monthly value on January 1st, but because the client has placed the membership on hold for three days, their next scheduled payment is moved forward three days. This moves their next scheduled payment to February 4th. All future payment dates are moved forward the same number of days the membership is on hold.
Hold period begins on a scheduled payment date
If the hold period starts on a scheduled payment date, the client is not billed until the next scheduled payment date. All future scheduled payments are moved forward the same number of days as the duration of the hold period.
Example:
A client has a monthly membership with scheduled payments of $100/month, billed on the first of every month. The client decides to place the membership on hold for three days (February 1st, 2nd, and 3rd). The hold starts on a scheduled payment date.
As shown in the figure above, the client is billed for the membership’s full monthly value on January 1st. Because the hold period begins on February 1st, the date of the next scheduled payment, the client is not billed. Instead, the client is billed for both the February and March payments on March 4th. The next scheduled payment date (as well as all future scheduled payment dates) are moved forward the same number of days the membership is on hold.
Hold rule: Prorate
When applied, this membership hold rule accounts for the time that a membership is inactive and adjusts the value of the next scheduled payment accordingly. The behavior of this rule depends on whether a scheduled payment is set to occur within the hold period.
When applying a prorate-type hold rule, keep the following information in mind:
- If a membership is set to auto-renew, the length of the membership won’t be extended by the duration of the hold period, but the total payment will be prorated.
- However, if a membership hold is applied to a past date and the auto-renew date occurs during the hold period, the membership will still auto-renew.
- If a membership is set to auto-renew, and then auto-renew is turned off, the length of the membership will be extended by the duration of all previous hold periods. The client will be charged an additional prorated payment for the extension of the membership at the beginning of the extended period.
- Alternatively, if a membership isn’t set to auto-renew, the length of the membership will be extended by the duration of the hold period and the client will be charged an additional prorated payment for the extension of the membership at the beginning of the extended period.
Payment date is not within the hold period
If there is no scheduled payment within the hold period, the client receives a credit for their inactive time, decreasing their next scheduled payment.
Example:
A client has a monthly membership with scheduled payments of $100/month, billed on the first of every month. The client decides to place the membership on hold for three days (January 3th, 4th, and 5th). There is no scheduled payment within the hold period.
As shown in the figure above, the client is billed for the membership’s full value on January 1st and is billed the prorated amount of $90.32 on February 1st to account for the three-day hold period in January. In the payment schedule, you will see that $9.68 is credited towards the second scheduled payment.
Payment date is within the hold period
The behavior of this rule depends on whether you select Prorated amount is added to the next scheduled payment or Prorated payments are moved to the day after the hold period ends.
Prorated amount is added to the next scheduled payment
If a scheduled payment occurs anywhere within the hold period, the client is not billed on that date. Instead, the prorated amount is added to the next scheduled payment.
Example:
A client has a monthly membership with scheduled payments of $100/month, billed on the first of every month. The client decides to place the membership on hold for three days (January 31st, February 1st, and February 2nd). A scheduled payment occurs within the hold period.
As shown in the figure above, the client is billed for the membership’s full monthly value on January 1st, but the scheduled payment for February 1st is not billed because it falls within the hold period. Instead, the February 1st payment is added to the next scheduled payment on March 1st. The payment on March 1st takes into account that the membership was on hold for one day in January and two days in February, resulting in a prorated credit of $9.68.
Prorated payments are moved to the day after the hold period ends
If a scheduled payment occurs anywhere within the hold period, the client is not billed on that date. Instead, the client is billed for a prorated amount as soon as the hold period is over. All future scheduled payment dates are moved forward the same number of days as the duration of the hold period.
Example:
A client has a monthly membership with scheduled payments of $100/month, billed on the first of every month. The client decides to place the membership on hold for three days (January 31st, February 1, and February 2nd). A scheduled payment occurs within the hold period.
As shown in the figure above, the client is billed for the membership’s full monthly value on January 1st, but the scheduled payment for February 1st is not billed because it falls within the hold period. Because the client has placed the membership on hold for three days, their next scheduled payment is moved forward three days. The payment on February 4th takes into account that the membership was on hold for one day in January and two days in February, resulting in a prorated credit of $9.68. All future payment dates are moved forward the same number of days the membership is on hold.
Hold rule: Continue Billing
When applied, this membership hold rule extends the length of the membership contract by the duration of the hold period. This means that if a membership is placed on hold for three days, the membership is extended by three days. When a membership is placed on hold, scheduled payments continue to be processed on their respective dates irrespective of the hold. After a hold of this type ends, the client will not need to pay for the extended period of the membership.
Example:
A client has a three-month membership with scheduled payments of $100/month, billed on the first of every month. The client decides to place the membership on hold for three days (January 31st to February 2nd).
As shown in the figure above, the client is billed for the membership’s full monthly value on January 1st, February 1st, and March 1st. At the end of the three-month duration, the membership period is extended by the length of the hold and is automatically renewed on April 4th. All future payment dates are moved forward the same number of days the membership is on hold.
