Why Don't Providers Do This One Simple Thing ... To Make More Money?

[host4go]

Ok so even though he's paying the VAT, it's actually added to his account as credit and not deducted from his payment like it normally would be?

Isn't it always?

I think you are overthinking this.

When someone pays you a service/product, the total value includes VAT, and is treated as part of the "cost value", it´s not separate, nor it should be from the point of view of the customer.

It´s not the customer fault that the state wants a cut on every transaction, it´s not the customer burden to account, report and pay the VAT to the state.

You gotta think about it like this. Whenever your business gets money, the state gets a cut. The only diference with prepayment is in accounting, the document needs to be processed as a prepayment and later on when you supply the service/product you must refer in that invoice that the ammount that had been prepayed was used to pay that invoice tottaly or partially.

Maybe a simplier way to explain is this. Your customer only paid once (the prepayment transacton), not twice, and VAT only applies to money transactions.

 

[KuJoe]

I was thinking of it as a fee and not a tax. Sorry.

 

[River]

Most of providers I know will let you pre-pay for their services, either using bank transfer or PayPal/CC.

Providers using 2Checkout may be more reluctant to do so, as according to our experience 2CO won't approve the Company's billing system if it allows 2CO to be used for adding credit.

I know that I personally allow the "Add Funds" option within my billing system, and I know of lots of other providers that also allow it.

One reason why providers might be reluctant to offer this is if they are hosting low-end accounts that may be more seceptable to spamming and AUP violations they don't want to be in the legal trouble of refudning, or not, etc.

 

[Hermes Hosting]

I think almost every provider accepts pre funds. its just industry standard now

 

[MightWeb-Greg]

Be very careful about pre-funding accounts since most providers (us included) don't give refunds for voluntary payments (i.e. adding funds to accounts for later).

Doesn't WHMCS by default state no refunds on the "add funds" page?

Possibly the reason why some providers don't allow it is because they don't want to have refund requests for transactions that were months ago.

Correct. We allow people to fund their account but a reasonable Max that the customers would end up using. We do state in our ToS that it is non-refundable regardless how much is in there.

 

[gordonrp]

Pre-funding is an accounting and tax nightmare. Pre-payment is not. Pre-funding, as seen in this thread, often leaves customers to believe that they can withdraw those funds later. 

It is much easier to simply sell products on a monthly, quarterly, annual basis, etc. I agree that the bonus credits for pre-funding smells of desperation to me.

 

[QHoster.com]

Adding funds before order services is common for fraudsters. Most seen ones are adding $5 or $100. If the deposit is fine they go to the order. Commonly seen by us for fraud with Credit card, Paypal and Skrill.