Price a prepaid plan as monthly price × boxes × (1 − discount), charged once. Then check the discount against your churn. On a $39.99 box with a 27% margin and 7% monthly churn, a 12-month plan only beats a monthly subscriber at up to about 9.9% off. A box with a 41% margin can go to about 14% off. Price gift plans at full price and add the cost of gift extras such as a card or wrap.
Prepaid and gift plans matter most in the run-up to the holidays, when gift buyers are shopping. They also hide three easy mistakes: a discount bigger than the plan is worth, upfront cash that gets spent before the boxes ship, and shipping or rounding errors at checkout. This guide works through all three with real numbers, and every figure comes from our prepaid and gift pricing calculator, so you can rerun it with your own costs.
Prepaid, gift, and monthly plans compared
- Monthly plan. The subscriber is charged every month and can cancel at any time. You pay a transaction fee on every box, and some subscribers leave each month.
- Prepaid plan. The subscriber pays once for several boxes, usually 3, 6, or 12, in exchange for a discount. You collect the cash up front and pay one transaction fee, and the subscriber cannot churn until the plan ends.
- Gift plan. A buyer pays once for boxes that ship to someone else. Gift plans are usually sold at full price, and they often carry extra costs such as a gift card or wrapping.
The prepaid pricing formula
Prepaid price = monthly price × number of boxes × (1 − discount), plus shipping × number of boxes if you charge shipping. Charge it as one total, rounded to the cent.
The price is the easy part. What matters is what the plan earns once every cost is in:
Plan profit = plan price − payment fees − boxes × (product, packaging, and packing + postage)
Payment fees are a percentage of the charge plus a fixed amount per charge. A prepaid plan pays the fixed part once, while a monthly plan pays it on every box. Our examples use 4.39% plus $0.49, which is Shopify Payments' basic US online card rate of 2.9% plus 30 cents and the Recharge Starter plan's 1.49% plus 19 cents. Recharge's other plans charge different rates; our Recharge pricing breakdown lists them.
Worked example: 3, 6, and 12 month plans
Take a $39.99 box with free shipping. It costs $17 in products, packaging, and packing, plus $9.95 to ship a 2 lb box. Each monthly box earns about $10.79 after fees, a 27% margin, which is already below the 30% danger line. Here are prepaid plans at the discounts many boxes use, compared with what a monthly subscriber at 7% churn is expected to earn over the same months.
| Plan | Price | Per box | Buyer saves | Your profit | Margin | Monthly, expected | Difference |
|---|---|---|---|---|---|---|---|
| 3 months at 5% off | $113.97 | $37.99 | $6.00 | $27.63 | 24.2% | $30.17 | −$2.54 |
| 6 months at 10% off | $215.95 | $35.99 | $23.99 | $44.28 | 20.5% | $54.44 | −$10.16 |
| 12 months at 15% off | $407.90 | $33.99 | $71.98 | $66.10 | 16.2% | $89.66 | −$23.55 |
"Monthly, expected" counts the boxes a monthly subscriber is likely to pay for. At 7% churn, that is about 2.79 of the next 3 boxes, 5.04 of the next 6, and 8.31 of the next 12. At these discounts, every prepaid plan earns less than a monthly subscriber is expected to. The discounts are giving away more than the churn they prevent.
How big a prepaid discount can you afford?
The break-even discount is the largest discount at which a prepaid plan still earns as much as a monthly subscriber is expected to over the same months. It depends on two numbers: your margin per box and your monthly churn.
| Monthly churn | $39.99 box (27% margin): 3 / 6 / 12 months | $49.99 box (41% margin): 3 / 6 / 12 months |
|---|---|---|
| 4% | 2.0% / 3.7% / 6.6% | 2.4% / 4.9% / 9.2% |
| 7% | 2.8% / 5.6% / 9.9% | 3.6% / 7.6% / 14.1% |
| 10% | 3.6% / 7.3% / 12.5% | 4.8% / 10.2% / 18.1% |
| 15% | 4.9% / 9.8% / 16.0% | 6.8% / 14.0% / 23.2% |
Two patterns stand out:
- Higher churn means you can afford a bigger discount. A monthly subscriber who is likely to cancel is worth less, so locking them in is worth more. At 15% churn, the $39.99 box can offer 16% off a 12-month plan. At 4% churn, only about 6.6%.
- A healthier margin also lets you discount more. The $49.99 box clears the 40% healthy target, so it can offer about 14.1% off a 12-month plan at 7% churn, against 9.9% for the $39.99 box.
If your monthly margin is under 30%, fix the price first. The pricing calculator shows the price your costs need, and the churn calculator helps you measure the churn number this whole comparison depends on.
Cash up front is not profit yet
A prepaid plan puts the whole payment in your account on day one, but most of it still belongs to the customer as boxes you have not shipped. This is usually treated as deferred revenue. Here is what is still owed after the first box ships:
| Plan | Cash up front | Still owed after box 1 | Boxes still to ship | Cost to ship them |
|---|---|---|---|---|
| 3 months | $113.97 | $75.98 | 2 | $53.90 |
| 6 months | $215.95 | $179.96 | 5 | $134.75 |
| 12 months | $407.90 | $373.91 | 11 | $296.45 |
The last column is the money you will spend on products, packaging, packing, and postage for the boxes you still owe. On a 12-month plan, $296.45 of the $407.90 is already committed. Spending prepaid cash on marketing or inventory for new subscribers is how boxes end up unable to ship what they sold, which is one of the patterns in our failure post-mortems. How to record deferred revenue in your books is a question for your accountant.
Shipping, rounding, and fulfillment traps
These are the problems founders run into after the plan goes live:
- Shipping multiplied by deliveries. On Shopify, shipping fees on a prepaid subscription are multiplied by the number of deliveries, so $10 of shipping on a 3-delivery plan becomes $30 (PayWhirl help center). That is right if you charge shipping per box. If your plan price already includes shipping, customers pay for it twice.
- Shipping apps that miss prepaid orders. Prepaid deliveries on Shopify are scheduled fulfillment orders that are not fulfilled automatically (Shopify developer docs). PayWhirl warns that many fulfillment and shipping apps, including ShipStation and Pirate Ship, have not been updated to import them. Confirm with your shipping app before you sell prepaid plans.
- Rounding per box. A plan total does not always divide evenly. A $100 plan over 3 boxes is $33.333 per box, and $33.33 × 3 is $99.99. Merchants have reported Shopify rounding prepaid prices incorrectly per delivery (Shopify Community). Pick plan totals that divide evenly, or check the rounding row in the calculator.
- Cancellations do not cancel queued boxes. In Recharge, cancelling a prepaid subscription does not automatically cancel the shipments already queued (Recharge help center). Decide your refund policy for part-used prepaid plans before you need it.
- Orders you cannot edit. Shopify does not support order editing in the admin for orders with prepaid subscriptions, so address or product changes have to go through your subscription app.
How to price a gift subscription
Gift price = monthly price × number of boxes × (1 + gift premium), plus the cost of any gift extras counted once per order. A common approach is to sell gift plans at full price with no discount, because the buyer is paying once for someone else and is not the person who would churn.
Here is the same $39.99 box as a gift, with $3 of gift extras per order:
| Gift plan | Full price | Margin | With a 10% gift premium | Margin |
|---|---|---|---|---|
| 3-month gift | $119.97 | 25.3% | $131.97 | 31.7% |
| 6-month gift | $239.94 | 26.8% | $263.93 | 33.0% |
| 12-month gift | $479.88 | 27.5% | $527.87 | 33.7% |
At full price, the gift plans land between 25% and 28% margin, about the same as the monthly box. A 10% premium lifts them to 32% to 34%. If you add a premium, give the buyer something for it, such as gift packaging, a message card, or a chosen start month. Our guide on how to price a subscription box covers premium tiers in more detail.
Setting up gift and prepaid plans for the holidays
- Launch before the gift rush. Have gift and prepaid plans live and tested before Black Friday, so the first orders do not hit a broken checkout.
- Let the buyer choose the start month. Many gift buyers want the first box to arrive after the holidays, not before.
- Collect the recipient's details.You need the recipient's shipping address, and an optional gift message and email for delivery updates.
- Decide what happens at the end.Choose whether a gift plan simply ends or offers the recipient their own subscription. If a plan renews automatically, auto-renewal laws apply. California's law, for example, requires the customer's express consent to automatic renewal and an easy way to cancel online (Barnes & Thornburg). This is general information, not legal advice.
- Plan your inventory for the plans you sell. Every prepaid and gift plan is a promise of future boxes. Order stock for the boxes you owe, not only for this month.
Prepaid and gift pricing checklist
- Get the monthly box to at least a 30% margin, ideally 40% or more, before offering discounts.
- Measure your real monthly churn.
- Run your numbers in the prepaid and gift pricing calculator and keep each discount at or under its break-even discount.
- Set plan totals that divide evenly by the number of boxes.
- Check how your checkout charges shipping on prepaid plans, and that your subscription app sells prepaid plans at all; our Shopify subscription app comparison notes prepaid and gift support for each app.
- Confirm your shipping app imports scheduled prepaid fulfillments.
- Set aside the cost of every box you still owe.
- Write a refund policy for cancelled prepaid plans.
- For gifts, add the cost of extras and decide what happens when the plan ends.
Frequently asked questions
How do you price a prepaid subscription box?
Multiply your monthly price by the number of boxes, take off a discount, and charge the total once: prepaid price = monthly price × boxes × (1 − discount). For a $39.99 box, a 3-month plan at 5% off is $113.97, a 6-month plan at 10% off is $215.95, and a 12-month plan at 15% off is $407.90. Then check that the plan still earns enough after shipping and fees, and compare it with what a monthly subscriber is expected to bring in.
What discount should a prepaid subscription plan have?
Only as much as the plan saves you in churn. On a $39.99 box with a 27% margin and 7% monthly churn, a prepaid plan beats a monthly subscriber up to about 2.8% off for 3 months, 5.6% for 6 months, and 9.9% for 12 months. A box with a 41% margin can afford more: about 3.6%, 7.6%, and 14.1%. Higher churn also raises the discount you can afford, because a monthly subscriber is less likely to stay for the whole period.
Are prepaid subscriptions better than monthly?
For cash, yes: you collect the whole plan on day one and pay one transaction fee instead of one per box. For profit, only if the discount is smaller than the break-even discount for your margin and churn. At common discounts of 5%, 10%, and 15%, the example $39.99 box earns $2.54, $10.16, and $23.55 less per prepaid customer than it expects to earn from a monthly subscriber over the same months.
How should I price a gift subscription box?
A common approach is full price with no discount: monthly price × number of boxes, because the buyer pays once for someone else. Add the cost of gift extras such as a card or wrap. With $3 of extras, a 3-month gift of a $39.99 box is $119.97 and earns $30.36, a 25.3% margin. A 10% gift premium raises that to $131.97 and a 31.7% margin.
Is prepaid subscription money revenue right away?
It is cash right away, but most of it is not earned until the boxes ship. After the first box of a $407.90 12-month plan ships, $373.91 is still owed to the customer as future boxes. That money is usually treated as deferred revenue. Ask your accountant how to record it, and keep enough cash to ship every box you have been paid for.
Why is shipping charged more than once on a prepaid plan?
On Shopify, shipping fees on a prepaid subscription are multiplied by the number of deliveries: $10 of shipping on a 3-delivery plan becomes $30. That is correct if you charge shipping per box, but it double-counts if your plan price already includes shipping. Check your checkout before you launch the plan.
By the SubscriptionBoxCalculator.us team | Last updated: October 2026
Figures come from the sources named in this guide. How our calculators and benchmarks are built is explained on the About page.
Ready to run the numbers?
Prepaid & Gift Pricing Calculator
Price 3, 6, and 12 month prepaid and gift plans and find your break-even discount.