Pay-Up-Front: A Perceived Flaw and Suggested Solution

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On the Topic of Pay-Up-Front

Greetings! As a Patreon Creator for a couple of years now, I’ve been considering changing from the existing payment method to pay-up-front. However, there is, what I think to be, a very serious flaw in the system that could be damaging to potential patrons. In this topic, I would like to cover the flaw, as I see it, as well as a possible solution. I would love to hear any and all feedback, and hope that my thoughts may offer some insight.

The Flaw

I would say, first, that collecting payment up front is a great idea. It fixes many issues with the standard system, primarily as a filter preventing fraudulent accounts from taking advantage of Patreon and it’s creators. That said, I have personally abstained from converting to the pay-up-front beta because of the way that payment collection is currently handled. This is best explained through example:

Demo Danny is a user who would like to become a patron of Creator Carla. That’s great! Carla has pay-up-front enabled on her monthly Patreon, to prevent fraudulent accounts from getting to her content without payment. Demo Danny thinks that’s cool, and goes ahead and signs up to become a patron of her.

This takes place on the 28th of the month.

Danny is charged $20 immediately (which he expected), and $20 in three days, when the new month starts (which he did not expect). This frustrates Danny, as he feels he has been double-charged unfairly. In the future, Danny will avoid creators who use pay-up-front, particularly if it is not at the beginning of the month, because he feels it would be wasteful of him to do otherwise.

Possible Solutions

The issue here is not that Demo Danny was charged up front - but that he was also subsequently charged at the beginning of the month, only three days after his initial payment.

This is not the first time this situation has been handled by businesses, and there are multiple ways to skin this cat. For example, apartment complexes will typically pro-rate your rent should you move in at the end of the month rather than the beginning. Many monthly subscription services handle it another way, by having it charge you in monthly increments based on the date of your initial payment (June 28th, July 28th, August 28th…).

I believe, considering the nature of Patreon and its content, that the model that would fit best is the latter of those two, modified slightly. Let’s take a look at that example again, but with a modified pay-up-front structure in place:

Demo Danny is looking to become a patron of Creator Carla. Carla has the modified pay-up-front structure in place. Danny goes ahead and contributes $20 a month, which he is charged immediately. Again, this is on the 28th of the month.

The $20 that Danny has pledged is sent to Patreon. Carla can see in her Payment Settings that the money is there, and just as it does now, when the first of the month rolls around, all completed payments will be paid out to her PayPal account. Carla notices no change from how she is paid today from how she was paid previously.

The first of the month rolls around, and Danny is not charged. He has made his contribution for the month, and will not be charged again until the 28th of the following month. This coincides with how Danny expected the experience to go, thus he is satisfied by the transaction, and in the future will have no problem contributing to creators using the pay-up-front system.

Now - the fly in the ointment here, as far as I perceive it, is that if you were a patron of many different creators, instead of having your contributions come out in a single transaction at the beginning of the month, they would come out sporadically throughout the month. I do not have a solution to that problem. However, I feel that, compared to the existing problem that can potentially deter users from pledging to creators in the first place, this is the lesser of two evils.

In Conclusion

I would very much love to hear everyone’s thoughts on this. I am very interested in this topic, as I have been excited about pay-up-front since it was first mentioned… I just don’t want to possibly harm the users genuinely looking to support me in order to stop a few bad apples from taking advantage of the system.

Thank you for reading, and I hope you all have an excellent day.
Chibi Biscuit

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I do feel like if it’s prorated that maybe a couple days before the 1st they will charged in full (And won’t be charged on the 1st as they already contributed for the month) but at most before a certain date it’s prorated? Then again it will be hard because let’s say they are prorated then they can back out but maybe have a warning or disclaimer about the charge so at least they will know as they are pledged like…

You are choosing to pledge $XX for the month of X
Note: That on the 1st of next month, you will be charged again for that month considering the pay upfront option of the creator !

I guess let me know if you catch what I’m putting down.

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You have your facts wrong. If Danny is charged on the 28th of the month, he isn’t be charged again 3 days later. The up-front payment covers the first month and is not repeated at the next payment cycle.

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@joumana, are you sure? This was taken directly from a Charge Up Front help desk post:

New Patrons: New Patrons will be charged on the day they become your patron, giving them access to all content shared with their reward tier. On the 1st of the following month, they will simply return to being charged monthly at the beginning of the month.
Example: A patron joins your Patreon community on February 25th for $10 per month. They will be charged $10 on the day they join, February 25th, for February patronage. On March 1st, the Patron will be charged $10 for March patronage.

So in this example, the patron got charged both on 2/25 and 3/1. This is how I understand it - if I am mistaken and you are correct, then that’s great, because I would be able to convert my Patreon over to pay-up-front without worry.

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I was sure, but now I’m wondering if something has changed again. I knew this based on two things: one, when pledging to a creator with pay-up-front, the message I received specifically said I wouldn’t be charged again at the end of the current month. Two, a patron of mine first pledged at the end of one month, and if she had been charged again three days later, I would have received that double pledge in my payout, but that didn’t happen. Her up-front pledge appears in the month she signed up, but not the very next month as she wasn’t charged again.

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Okay - perhaps then it’s just that the source I was getting my information from is outdated, and the de facto implementation is that individuals are not double-charged.

I would love to hear a confirmation from someone on staff explaining how this is being implemented in the application currently, because if it is working as joumana suggests, I will convert my account over to pay-up-front immediately. :slight_smile:

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No, it works the way you described it. I just recently made the switch and would prefer your approach as well.

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I’d like a confirmation too because so many things are being changed before features are rolled out, my own experience might be obsolete!

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I had a person join on 6/30. He was charged that day and again on 7/1. So this is how it currently works.

I am giving a heads up on this payment procedure in the description on my page. This way everyone has a fair chance just to wait a couple of extra days and save some money if they please.

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Okay. So with the system in its current state, this is still an issue.

I agree that giving them a heads-up is a best practice, but I also don’t expect everyone interested in pledging to read everything on the page. I would be happy to go and give refunds to those who think they have been charged incorrectly, but that’s introducing a manual solution that doesn’t really address the core problem.

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Hi folks! While I do agree it is frustrating for a patron to be double charged when they pledge at the end of a monthly cycle, I find that the pay-up-front structure still works for some reward models. For my patrons, no matter what time of month they begin their pledge, they will have access to the entire month’s rewards, so double charging also yields double rewards. At the 1st of each month, I post all the rewards for that month. If a patron isn’t charged on the 1st of the month (as proposed in the modified version), then they will have access to that month’s rewards without payment, which brings us back to the same issue of fraudulent patrons that the pay-up-front was designed to prevent. I also send out physical gifts in the mail for certain pledge tiers, so pro-rating for later pledges would introduce a layer of complexity in determining whether or not their pledge meets the criteria for a physical gift (since essentially all new pledges made after the 1st of each month would be pro-rated to a fraction of a full pledge and therefore would not really fit the criteria for certain physical reward packages).

Before pay-up-front was introduced, I was manually sorting through my list of patrons to determine who qualified for a physical gift reward package, who got an invite to special patron-only hangouts, etc. In my experience, the regular 1st-of-the-month payment model introduced way more manual problem-solving as well as dishonest patrons.

I think each payment structure has its flaws, but pay-up-front in its current state works perfectly for me and some of my peers who have similar reward models, so I personally do not see a need to change anything, but I do understand that everyone’s situation is different. Just felt like offering my angle, and perhaps we can find a solution that will fit everyone’s needs :slight_smile: Thanks for reading guys!

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Thank you for your insight! It really helps to hear about this from your point of view, since in your case, the rewards you provide are very specific to the month in which the user pledges, so the current pay-up-front model works perfectly.

I do agree that pro-rating is not the way to go. It was more an example of how it was handled in other industries - my personal best-case would be to have the user’s monthly cycle begin on the day they pledge, and to have their monthly charges recurring on that day every month - but I understand now that this would add a layer of complexity for creators that do have rewards outside of accessing Patreon posts (like physical gifts and patron-only hangouts).

I would be really curious to hear if anybody has any alternative solutions to this puzzle. It would be great if we could figure out a way that is both simple enough that it doesn’t complicate the workflow of creators like happydartist, but also prevents situations where individuals unknowingly sign up to have themselves double-charged. In my opinion, even something as simple as having a div with text on the signup page explaining “You will contribute $10 now, and your next contribution will be processed on August 1st, 2017” would be a step up in making sure that patrons are aware of how the pay-up-front system works.

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I think too that this is a problem. Maybe a nice fix to this would be to give an option for creators to not double charge patrons who pledge the last 5 days of the month or something like that.

What I do now is trying not to attract too much people at the end of every month because I’m embarassed to know they will be double charged.

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One concern with prorating the pledge is they may sign up for a large reward, pay the prorated amount to get that reward, and then drop before they are charged for the next month. Or say someone has a $100 reward that is for super, awesome, amazing, expensive, exclusive item to be mailed each month and a person signs up at the end of the month and pays less than the shipping costs. Patron may still expect the item because they signed up for that month’s exclusive reward and now the creator has to explain that they can’t send it.

It might be good to put this power in the hands of the patron by informing them of the potential double-charge and giving them options to either pay now and be charged again at the beginning of the month or hold your pledge to begin at the start of the next month. And also include mention that rewards will begin when the pledge does so that if they’re wanting the current month’s exclusive reward they can make that determination.

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I agree with your point. The mention of pro-rating was really just an example of how apartment complexes handle this situation. I rather think there are too many holes for this to be applicable to Patreon.

I do agree that much of this confusion could be solved with a little more visibility on the pledge page. As you said, notifying the patron of how much their pledge is, as well as when their next pledge will be deducted would be a huge step in the right direction in my opinion.

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Moin,

I think this discussion raises two other points additionally to the (good) suggestion for a modified payment option:

  1. it seems that there is need for better communication from Patreon’s side towards users of their system, probably both content providers and customers/patrons. This, to me, seems to become a real issue.

  2. it also seems as if the Patreon payment system is to inflexible to begin with. While I fully understand that “ease of use and clarity of conditions” is a good selling point, the more discussions I read around here and the more I talk with people being interested in supporting others financially, the more I have to say: More options for the content providers and their patrons might be exactly what Patreon is lacking to gain more traffic (this point is mainly based on discussions I have had over the last week).

It could be claimed that it’s the content provider’s “job” to inform his patrons about when and how money is collected, but I think that this, in fact, should fall into Patreon’s field, since they are the ones doing the collecting and they are the ones providing the platform AND they are the ones, as it seems, who keep changing the rules of the game.

Marc

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Marc,

I like both of your points. I would agree that clearer communication about how the system works would be a boon to both creators and patrons, and would likely be a very simple way to provide a better Patreon experience to all involved.

I would also agree that while currently, it is the responsibility of the creator to communicate this, it makes far more sense that this message would be communicated by Patreon. My reasoning for thus is simple: We can’t change the verbiage on the pledge page. Sure, we can add notices and explain how billing works on our creator page, but it has to go in the same block of text as our bio, and why users should consider subscribing to us. That’s a lot of text, and chances are most users are going to skim it, if that. Information about how pledging works, specifically the Patreon system that bills them every month, should be universal, and clearly illustrated on the pledge page.

As to your second point, I’m intrigued. In your discussions, what other payment options have you heard/talked about? Are there any specific ones which might be a viable addition or alternative to the existing payment options? I’m interested to hear. I’m really loving this discussion!

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Hi,

To tell the truth, the argument against becoming a patron that I hear the most is “I don’t want to give away my data AGAIN” and “I don’t want to subscribe to anything”. One can easily be countered by “just use Paypal like you always do”, the other by “you don’t have to stay longer than till next month”.
The second phrase, though, shows: What about people who want to support me once but I don’t have any “pay right now, immediately” option set up? As far as I have seen there is no way to support a “(guaranteed) one time submission”, although that - even to me - sounds like the most logical choice to have, independent from what a creator is setting up.

Another thing that comes up regularily is “it would be cool if I could kind-of-buy that single thing from you”. For me that would be an extended video where I could have a short version available for free and a longer one with a pay-wall. Sure, I can do that through vimeo … but the idea of having a central money-making-point like Patreon is, well, to have a single point of money making. Not having to use external solutions in parallel.
This may sound like “I just want another function on Patreon”, but that is not the point. The point is that this is what I keep hearing when talking to other creators that are NOT on Patreon - as a reason for not being on Patreon. It is a point that I keep hearing in discussions about “thank you for saying thank you and yes, you can support me, just become a patron” :slight_smile:

… But I guess I both digress and run in circles.

Marc

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My suggestion: Demo Danny is charged the full price on the 28th, and then a percentage of the full monthly price equivalent to the number of days he’s been signed up out of the month, on the first. Then the next month he’s charged in full on the first.

Example:

  • Signs up May 28th for $50
  • Is charged $50 on May 28th
  • On June 1st, is charged (3d/31d)*$50 = ~$5
  • On July 1st, is charged $50 (and so on for future months)

I think that solves all the problems. Keeps everyone in sync, makes them pay the whole price up front, avoids double charging them so soon. Thoughts?

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I feel that’s too complicated…