Originally Posted by easyhostmedia
but many hosts wont pro rata refunds after MBG period. I know in the UK if the client is non business then distant selling regulations only give a 7 day period where they can cancel without any lose, but for b2b their is no such protection.
I wouldn't pro-rate either. Upon early cancellation I would convert the account from annual to month-to-month. There will be a point during the year (depending on discount rate) when cancellation may result in customer owing host money, for example, after 9 months when annual subscription results in a 25% discount. At that point it would behoove the customer not to cancel.
Thus if hosting is $4/mo and orders annual plan at $36/yr ($3/mo) and customer cancels at 6 months refund would be $36 - $24 = $12
If customer cancels at 10 months, "refund" would be 36 - 40 = -$4.00, i.e., customer would owe for a month of hosting (which he/she did use).
I think this is a fair scenario that avoids legal and contractual entanglements. Whether or not its good accounting practice is another story I suppose.