This post is an elaboration on changes to our terms of service regarding credit expiration. We want to explain what the changes are, provide insight into the thought process behind them, and clearly define what to expect regarding both your credits and future changes to our terms of service.
We want to be open about our processes and where we made mistakes, and we encourage your comments below or via support emails.
If you just want the TL;DR, check out our GitHub repo to review the changes to our Terms of Service, sections 5.8-5.14 about Credit Expiration.
Why expire promotional credits?
Since launching in 2012, DigitalOcean has granted over $30M in credit to our customers and community. With those credits, we fund open source projects, incentivize first-time customers to use our product, and reward those who refer friends to DigitalOcean.
In late 2014, an audit revealed that we had millions of dollars in unused credit outstanding as liabilities on our balance sheet, as shown by the graph below.
Overall, credit expiration is necessary to decrease the liability on our balance sheet so that we can maintain healthy financials. As you'll read, it took over a year to realize we made these changes using the wrong process.
At the heart of all of this, we are a business that intends to be around for a very long time, so in March of 2015, we updated our Terms of Service to indicate that unused promotional credits would expire 12 months after being applied to an account. This notification was sent only via control panel notification.
In early 2016, we started to write code to expire credit . When we looked at the current amount of outstanding credit, there was a large balance that wasn't covered in the 2015 terms update. We updated the terms again in March 2016 to include expiration for referral credits, but did not provide 12 months advanced notice to our customers. We also neglected to include all other types of credits that aren't promotional credits, such as SLA credits.
On March 31st, we sent emails and control panel notifications to approximately 280,000 customers explaining that some or all of their account credit would be expiring on May 1st. This included all types of account credit over 12 months old. Through lots of customer feedback, we realized that this email came as a surprise, which we're truly sorry for. It was a mistake on our part to lump referral credit expiration and other credits into the May 1st expiration timeline because we had not provided adequate notice to our customers.
What was the feedback that we received?
The feedback from roughly 650 customers and members of our community had a few themes, and the major point of contention was that we didn't provide enough notice. This can be articulated in a few ways. First, we need to make it more explicit in our product that credit can expire. Secondly, customers want more than 30 days notice. Lastly, we need to provide more clear updates to our terms of service.
Internally, the sentiment from about 50 DigitalOcean employees closely mirrored what our customers were telling us. A few employees were concerned that we alienated some of our long-time supporters. In further discussions, we realized that our internal communication about this change wasn't as clear as it could have been, which certainly made us realize that our external communication must need more clarity, too. A member of our support team, Jon, summed it up neatly by remarking that we didn't do the wrong thing, but we did it in the wrong way.
One thing was crystal clear: both our customers and our employees wanted us to be more explicit with changes to our terms and to take some immediate action to rectify the current situation. Cumulatively, all of the input set off about three weeks of work which we've outlined below.
What is the action plan?
In the beginning of April, we created a Customer Advocacy Group whose overall mission is to make sure that we cultivate customer-focused decisions. This group is a permanent part of DigitalOcean, and its first task was to create an action plan for credit expiration based on the feedback we received balanced with our business goals. As a result of our group's work, we've implemented the following changes which we feel are a step in the right direction.
First, we've updated our terms here, and put them into a GitHub repo so that you can see exactly what has changed. You can expect this for any future updates. Here are the highlights with respect to credit expiration:
Promotional credit will expire 12 months after it has been issued or redeemed. This includes referral sign-up credit, promotion codes you've entered, or credit issued by DigitalOcean staff.
Referral and SLA credit will now expire after 12 months of account inactivity, and no sooner than May 2017. This includes credits earned from referring customers to DigitalOcean and SLA credits.
Additionally, all credit redemption email notifications from now on will link to our terms about credit expiration so our policy is clear to future customers. Soon, we'll be able to expose the credit expiration date on your billing page as well.
Secondly, we're emailing all of customers with much more detail about changes in our terms, which will be our process on all future changes. We're also providing a control panel notification with more detail and links to the GitHub repo. As time progresses, our aim is to provide more than 60 days notice for any expiring credits.
Lastly, if you have credit that's expiring and you would like to utilize it, we highly encourage you to get in touch with our support team. We want to help with your development goals, and encourage you to provide details on how you're using DigitalOcean.