Commerce Glossary

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What is Automatic Renewal?

au - to - ma - tic re- new - al
noun
(also known as auto-renewal) Is a billing process where the customer’s subscription is set to be renewed automatically at the end of their subscription period – weekly, monthly, annually or any other agreed-upon period of time – without the customer having to take action. Automatic renewal goes hand in hand with automatic billing, which involves the automatic charging of the customer’s credit or debit card (or another payment method of their choice) in order for the customer to have access to the product or service for the next billing cycle.
How Does Automatic Renewal Work?

The customer is notified regarding the charge before or just after the billing, but best practices dictate a notification prior to the actual charge, allowing the customer to cancel if they no longer wish to use the service. Customers should be allowed to disable auto-billing and to switch to manual billing (manual renewal) without cancelling the subscription as well.

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