Terminating/Cancelling a Membership Order

There are a number of ways to cancel a membership. Which method you use should be based on your organization's policy. For example, your organization's policy may be to refund the portion of the membership that has not been used or to refund the whole membership or to not refund any money.

If a membership order is cancelled, there is no record that the member was ever a member; the order is just cancelled. If the membership is terminated, the amount of time the member was a member is maintained in the system. If your organization does allow members to cancel memberships (uncommon), Personify360 does provide the option for cancellation fees to be defined, which are assessed when the membership order line is cancelled.

For example, assume a member joined on June 1 and decides towards the end of July that they don’t want to be a member. Let’s also assume the membership cost $120. The organization has two choices: the membership can be terminated by setting the fulfill status to "Terminate on End" and updating the cycle end date on the membership, or the order can be cancelled. If the membership in this example is terminated and the membership cycle end date is changed from 6/30/2016 to 7/31/2015, the system will create an adjustment transaction to reduce revenue and AR by $100, leaving revenue and AR at $20 ($10/month for June and July). The order line status remains as "A" (active), and the $100 credit balance on the order line can be refunded.  

If the order line is cancelled, from the Cancellation and Refund screen, the user can specify the revenue proration effective date and how revenue for service should be recognized. Typically, membership revenue is recognized on a "Prorate" basis; but in the case of memberships that have a payment schedule, you have an option to recognize "Amount Paid". If the organization has defined a cancellation fee, that will also be displayed on the cancellation screen, where it can be removed out depending on circumstances.

To continue with the example above, if the organization cancels the membership order and says that revenue should be recognized for service on a "Prorate" basis and the revenue proration effective date is set as 7/31/2015, the system will again create an adjustment transaction to reduce revenue and AR by $100, leaving revenue and AR at $20 ($10/month for June and July). The order line status is "C" (cancelled), and a refund transaction is created for whatever amount was specified on the Cancellation and Refund screen to be refunded, assuming a refund amount was specified.

It is key that your revenue be consistent with your member counts.

Memberships can be:

·            Cancelled to Refund the Remainder of the Year

·            Cancelled to Refund or Transfer All Money

·            Cancelled to Keep All Money

When cancelling a membership products with subscription product benefits, you must take into consideration the calculation of deferred revenue that has already been recognized. If partially paid with one or more months recognized, only the difference between what has been paid and the invoice amount must be written off with recognized revenue written off prior to deferred revenue.

Following are the options that can be selected for revenue recognition during cancellation:

·            Amount Paid: Revenue is recognized upon cancellation for only the amount of the existing receipt(s). This option should not be selected unless the order has scheduled payments.

·            None: Revenue is not recognized at all upon cancellation.

·            Prorate: Revenue is recognized as a prorated amount of the order line total dependent on the cancellation date. For example, if a $120 membership was from January 1 to December 31 and it was cancelled on June 30, only $60 would be recognized (assuming monthly recognition).

·            Recognize All: Revenue is recognized for the entire amount of the order line total regardless of the cancellation date. For example, if a $120 membership was from January 1 to December 31 and it was cancelled on June 30, all $120 would be recognized.

If you cancel a membership by mistake, there is NO way to fix this line from the Order Entry screen. Your DBA will need to correct the data in the back-end.

Cancelling a master membership line item automatically cancels all chapter sub-line items. As of 7.5.0, if the membership master line has a shipped or pre-shipped INV subline, the system will allow you to cancel the master membership line without affecting the INV subline.

If a membership order is being cancelled that has a payment schedule, the revenue recognition code on the Cancellation screen defaults to “Amount Paid”.

If the proration interval is set to “month”, a constituent has a membership line item with a status of “terminate at end”, and that same line item has the same membership begin and end date (e.g., 9/1/2014), Personify360 would calculate the dues to be 1/12th of the annual price, because the minimum amount that it will calculate is 1 month. Similarly, if they had a term of 1 month and 1 day, it would calculate it as 2 months.

As of 7.6.1, if the organization is using Vantiv, when a receipt created by FAR680 has a date value in Far_Receipt.AUTHORIZATION_RECYCLING_END_DATE, it cannot be refunded. If the user attempts to refunded a payment created by FAR680 before the FAR681 response has been processed (i.e., while Far_Receipt.AUTHORIZATION_RECYCLING_END_DATE is not null, because FAR681 will update the Far_Receipt.AUTHORIZATION_RECYCLING_END_DATE to NULL), the user will be presented with a message: The payment you are attempting to refund cannot be refunded until on or after [Far_Receipt.AUTHORIZATION_RECYCLING_END_DATE] because the payment has not yet been collected. For more information, please see Vantiv Authorization Recycling.

Cancellation Logic

The following cancellation logic needs to be taken into consideration before processing a cancellation:

As of 7.6.0. when cancelling a membership order, the system will respect the Prorate Amount and Proration Level defined for the member group.