How do I structure a payment plan for my website?


I plan on making my website a paid one and have a question about structuring the payment plan. Think of the website as an ecommerce site selling very low ticketed items (as low as $0.05). Since payment processors such as Paypal have a processing fee per transaction, I can't really make anything if I sell a single item for $0.05.

So, I plan on accepting a minimum of $10 (or multiples thereof) and now have 2 options:

  1. Implement a credit based system and
    sell x credits for $10. Users can
    choose to use 1 credit at a time if
    they wanted to.
  2. Keep it simple and simply reduce the users balance by $0.05 every
    time they buy a single item.

In either case, how do I handle refunds. In the first plan, do I expire unused credits after some time?

Any thoughts?

Payments Website Saas Business

asked Aug 19 '10 at 13:10
232 points
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  • If you can add details on what your industry & product is and who your customers are, it would give a better context so you receive a quality answer. – Susan Jones 14 years ago

6 Answers


Calling them credits may make it easier for the user and on yourself when displaying balances and giving refunds. You also don't have to display balances or prices in different currencies. It's only a factor when purchasing credits or to cash someone out.

Promotions like, buy 100 credits before the end of today and get 10 free.

Expire the credits, but go out of your way to notify users. It could be a way to invite them back to the site.

Not sure what you sell for a nickle. Hopefully there are ways to encourage users to buy in bulk.

answered Aug 20 '10 at 02:54
Jeff O
6,169 points
  • iStockPhotos does exactly what you suggested. It's my favorite site for stock photography. – Gary E 14 years ago
  • Excellent thoughts Jeff. Care to put your thoughts on payment processors? Paypal is an option. FastSpring is an option too. Just not sure which one makes sense for my website. – User2306 14 years ago
  • Sorry, no expert on either. – Jeff O 14 years ago
  • I would recommend that you don't do refunds at all. If someone puts in $10, that $10 is yours. They need to spend or lose. +1 for an "about to expire" email that gets users back to your site. – Mike Nereson 12 years ago


You want to batch the payments into larger amounts or you will lose money on each "sale."

The credits are a good idea, I do not really see a difference between each option = in a sense, the credits are worth $.05 each and the balance is reduced accordingly.

You can handle refunds however you want. If the item is $.05 I assume it is a digital item - are refunds necessary?

Expire credits however you want as well. If you are not 'fair' your users will let you know.

answered Aug 20 '10 at 01:12
Jeff Epstein
1,532 points
  • Refunds are necessary. Its like starting a company and not having any paper work. Its a system that works, but its broken and prone to get frustrating afterwards. You want to make sure your customers are happy. Even though its just 5 cents, you can get a bad rep. I don't think anyone can afford bad rep. – Bhargav Patel 14 years ago
  • What do you mean by paper work? I hope not real paper. – Jeff O 14 years ago
  • @Bhargav, I do not really get the down vote. For a 5 cent item this whole process seems like a losing proposition. Its a legitimate answer considering the business model proposed. – Jeff Epstein 14 years ago
  • Not sure why this was down voted, so I voted it back up. – Zuly Gonzalez 14 years ago
  • Thank you Zuly =) – Jeff Epstein 14 years ago
  • How do you know if I voted your down? – Bhargav Patel 14 years ago
  • It was a guess. Based on your answer, it was an educated one. – Jeff Epstein 14 years ago
  • How is it an educated guess when you assume I voted you down. You told me to read before I type, while you flamed without thinking.. sorry sir, don't think I am against you. hehe. Anyways, don't worry it could've happened to me too, so w/e. – Bhargav Patel 14 years ago


I like the idea of purchasing credits. Mentally it's easier to spend credits than it is to spend real dollars.

I don't like the idea of expiring credits. You're getting the money up front, so the customers have already paid for them. People may be reluctant to participate if they think there's a chance they may lose money. But Jeff did bring up a good point about it being a way to invite customers back to the site.

Concerning the refund issue, I don't think most normal people would bother going through the trouble of getting back $'s just not worth the time. Also, it will probably end up costing you more to return the $.05 to the customer. That said, I think it's probably a good idea to offer refunds to customers. It's a psychological thing that may result in a paying customer, even if the customer isn't actually going to go through the trouble of getting a refund. It's just nice to know that you can get a refund if you really wanted to. It shows goodwill, and removes a barrier.

answered Aug 20 '10 at 11:05
Zuly Gonzalez
9,194 points
  • It won't necessarily be $0.05. If a user buys 100 credits for $10 and never uses them even after several years, how long do I keep the credits around? So, I may have to expire after a while. – User2306 14 years ago
  • I understand what you're saying, and there are definitely good reasons to expire the credits. But I just think that's an additional reason why not to participate on your website. Consumers are always looking for a way out. Don't give them a reason to say no. Maybe you can incorporate something in your system that will allow users to keep their credits, even if they don't use them right away. This is how credit card mileage programs work. Maybe something like referring people to your website lets them keep their credits. – Zuly Gonzalez 14 years ago


I forgot to read all of the post and I started typing but I just noticed that you had the same idea I had... of having minimum balance/deposit. Its a great idea so I 1+ you.

1st option is much better. Credit system is better just because its cleaner and lets them know how much they can buy without worrying about anything else. Keep it flexible and have multiple plans. Multiple plans meaning, I can buy 5 credits or I can buy 50 credits.

You can even get more complex, and give your users both options when they signup. But this will require you to do more work.

Try to implement a proper refund policy and warn your customers about the policy before they purchase. I don't agree with Jeff. Even though its 5 cents it matters. If some users can't get a refund, they'll think that was the catch, that you are getting to greedy or worst, you were a fake and are just ripping people off like this. Put your customers before your revenue, if you have to, lose some money but your customers are your priority. In this social age, you can't afford to get a bad rep.

answered Aug 20 '10 at 01:38
Bhargav Patel
784 points
  • Try reading my answer before typing. I simply asked if refunds are necessary. It is a question. Not a statement. – Jeff Epstein 14 years ago


  • Your own credit system will only work if customers anticipate making multiple micropayments to you. i.e. I have to believe that I will purchase $10 worth of stuff within a reasonably short period of time before either the credits expire or you go out of business. (Not saying you will, just looking at it from the customer's viewpoint).
  • Note that Paypal has a micropayments option - 5% + $0.05 per transaction.
  • Another possibility is a shopping basket with a minimum order charge (say $1 or $5). Depending upon what you are selling, this might work as an incentive to spend more.
  • Credit expiry (which keeps accountants happy): >= 1 year is reasonable IMHO. Anything less will leave me worrying whether the credits will expire before I use them, and therefore I won't buy them.
answered Aug 24 '10 at 12:51
946 points


If you denominate account credit in abstract credits, then (a) you can refund at a different rate from that which people buy, and (b) you can just have some kind of voucher for sale (such as itunes credit vouchers or whatever).

(a) Should act as a disincentive for people to cash out too frequently. (b) Is another way of making a profit off their desire to take their cash away.

answered May 16 '11 at 16:44
526 points

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Payments Website Saas Business