Why Is Pre-Authorization During A Free Trial A Recommended Best Practice?

The Purpose of Trial Card Pre-Authorization

Pre-authorization during a free trial is a crucial best practice for Recurly Subscriptions that helps minimize future subscription renewal declines. The singular goal of this process is to validate the customer's card and confirm its viability before the paid subscription period begins.

This process is sometimes referred to as "authorize and capture," where the authorization step occurs during the trial sign-up, and the capture (the actual charge) occurs later, upon conversion to a paid subscription.

Where Trial Authorization Is Configured

The amount that is pre-authorized on the card (e.g., $\$0.00$, $\$1.00$, or the full subscription amount) is controlled by the settings within your Payment Gateway, not within the Recurly subscription plan configuration.

Pre-Authorization Strategies and Renewal Success

The amount you choose to pre-authorize directly impacts the confidence you can have in the card's ability to pay at renewal.

Zero- or One-Dollar Authorization

• Method: A nominal amount (e.g., $\$0$ or $\$1$) is authorized on the card.

• Validation: This action confirms the card's validity but does not check for sufficient funds to cover the actual subscription cost.

• Impact: This strategy results in a higher risk of failure upon the first renewal, particularly if the subscriber is using a prepaid card or one with a low balance.

Full Amount Pre-Authorization (Recommended Practice)

• Method: The full amount of the subscription's first billing period is authorized (held) on the customer's card at the time of trial sign-up.

• Validation: This confirms that the necessary funds are available, which significantly increases confidence that the renewal payment will succeed.

• Impact: Although the authorization is immediately voided without charging the customer, confirming the funds at the outset is the most reliable way to reduce future involuntary churn.