September 4, 2026
Upgrades and downgrades
Upgrades and downgrades are changes a subscriber makes to move to a higher or lower plan tier, quantity, or set of features within an existing subscription, without canceling and starting a new one. The subscription is modified in place, and the billing system adjusts pricing going forward, often generating a prorated credit, a prorated charge, or both, to account for the switch happening mid cycle.
Expanded meaning
The term covers several related kinds of subscription changes, not just moving between named plan tiers:
Changing the plan itself, such as moving from a Silver plan to a Gold plan.
Changing quantity, such as adding or removing seats in a per seat pricing model.
Adding or removing add ons attached to the base subscription.
Changing price on the same plan, for example when a merchant updates pricing for existing subscribers.
Any of these can trigger proration, the process of calculating the unused portion of the old terms and the applicable portion of the new terms so the customer is billed fairly for a period that started under one set of terms and ended under another.
Why it matters
Upgrades and downgrades are one of the most common actions a subscriber takes after signing up, and getting them right matters for a few reasons. Handled well, an upgrade path gives customers room to grow into a product without friction, which supports expansion revenue. A downgrade path, in turn, gives price sensitive or lower usage customers an alternative to canceling outright, which can reduce churn. Poorly handled plan changes, on the other hand, tend to show up as support tickets: unexpected charges, confusion over credits, or invoices that do not match what the customer expected. You can read more about how plan types can affect subscribers here and here.
How to use
Subscription businesses generally support plan changes at a few different points in time, and the choice affects whether proration applies.
Immediate: the change takes effect now. Recurly creates an invoice right away and, for automatic collection, attempts the transaction immediately; if it fails, the invoice and subscription enter Dunning. Immediate changes that keep the same plan period, such as monthly to monthly, retain the current billing period and apply proration; changes that alter the plan period, such as monthly to annual, restart the billing term and are not prorated.
At next bill date: Recurly saves the change and applies it on the next billing date, with no proration. Only one pending change is retained, so submitting a second replaces the first.
At term renewal: Recurly saves the change and applies it when the subscription term renews, again with no proration and the same single pending change behavior.
For an immediate change, proration is a choice rather than a default. Recurly gives three options for both the credit and the charge, so a business can make the change take effect now without prorating it:
Prorated: credit the unused portion of the current period and charge only for the remaining portion.
Full: credit or charge the full amount rather than a prorated slice.
None: skip the credit or charge entirely. No credit invoice is created, and a zero dollar invoice records the change. This suits merchants shipping physical goods, where a sent shipment means the period is already fulfilled.
These can be set as a site level default under invoice settings, or overridden for a specific change in the UI or API.
Benefits and examples
A few patterns come up often when subscription businesses design their upgrade and downgrade experience:
Self-serve upgrades inside the product, triggered when a customer hits a usage limit or asks for a feature that lives in a higher tier.
Downgrade flows offered as a retention step before a customer reaches the cancel page, giving them a lower cost option instead of leaving entirely.
Mid cycle plan changes that produce both a credit and a charge on the customer's account: a credit for the time remaining on the old plan, and a charge for the time remaining on the new plan.
For example, a subscriber partway through a billing cycle switches from a lower priced plan to a higher priced one. The billing system calculates a credit for the days left unused on the old plan, calculates a charge for the days remaining on the new plan, and nets the two into a single amount due, rather than charging the full price of the new plan on top of what was already paid.
Frequently asked questions
What is the difference between an upgrade and a downgrade?
An upgrade moves a subscriber to a plan, tier, or quantity that costs more and typically unlocks more features or usage. A downgrade moves them to something that costs less and typically offers fewer features or lower usage limits.
Does an upgrade or downgrade always trigger a prorated charge?
Not always. Whether proration applies generally depends on when the change takes effect. A change made immediately, mid cycle, commonly triggers proration, though you can also choose to make an immediate change without prorating it. A change scheduled for the next bill date or renewal generally does not prorate, since it lines up with the start of a new billing period.
Why did a customer get both a credit and a charge for one plan change?
This is expected in many mid cycle plan changes. The credit accounts for the unused time on the old plan, and the charge accounts for the remaining time on the new plan. Together they represent the net cost of switching partway through a billing period.
Can a customer downgrade and keep their current billing date?
In most subscription systems, a downgrade that does not change the billing period length keeps the existing billing date and simply adjusts the price going forward. A downgrade that changes the billing period itself, such as moving from monthly to annual, may reset or realign the billing date instead.
