Happy Business Starts Here

Zuora Support

Discount Percentage is not prorating based on the dates


Why is amendment changing discount not taking effect on service activation date? The amendment changing the discount in mid-month is not taking effect.


Background of the issue:

An Update product amendment was created in the subscription to change the discount percentage from 22.2222% to 12.2222% with the effective date Feb 12(mid of the month) but still, the old discount percentage(22.222%) was applied for the entire service period(Feb). The Price is not prorating based on the dates.



The Customer's use case is,

Initially, the percentage discount of 22.2222% is set to apply on the recurring charge. After that, they have changed the percentage through amendment to 12.2222% with the effective date Feb 12. When invoicing for the period 02/01/2020 to 02/11/2020, the discount percentage is 22.2222%*11/31 and when invoicing for the period 02/12/2020 to 02/29/2020, the discount percentage is 12.2222%*18/31. Basically, if this is the use case, then Zuora does not support such functionality. The Discount Percentage cannot be prorated.  In this case, the discount is 22.2222% from 02/01 to 02/31 which means that the percentage is 22.2222% for any charges billed in this period. The discount applied does not depends on the period length and it does not contain a partial concept. 

The explanation for this behavior is due to the type of discount. It is a percentage discount and auto-renew is set to Yes. The original discount term end date is replaced by the fact that the term has now entered into the renewal period. In cases where the term is extended beyond the end date, percentage discounts do not prorate, and instead apply to the entire month.

If you want the discount to apply to just that portion of the month, you could set up the discount to be a flat fee amount which could be properly prorated. Or you can set the Auto-renew to No after the Invoice has been generated for the period up to 02/11, and then you can create a renewal amendment, create an update product amendment to update the discount. I have tested this and it worked fine. Please refer to the screenshot for reference,

If you found my answer helpful, please give me a kudo ↑
Help others find answers faster by accepting my post as a solution √