AdvancePay is a useful tool to both gain sales before picture day even begins and to build interest as the big day approaches. However, how you get paid from AdvancePay purchases contains a few more steps than traditional photo purchases. For our article about viewing detailed sales reports, click here.
Credits will expire 14 months after the purchase date. There is a series of emails and text messages included with AdvancePay that help remind the customer to redeem their credit prior to expiration that you can view here.
You (the studio) can request a payout of any expired credits from our support team at any time. You may also request a payout of any unused credits prior to credit expiration but there will be a service charge of 5% for early payouts. This will cancel your customer’s available credits and they will not be refunded.
Let’s go ahead and break it down.
I. AdvancePay Credit Purchase to the Studio's First Payout
Here's a walk-through of a $40 AdvancePay credit transaction - from the time the customer purchases the credit to the studio's first deposit:
Customer purchases a $40 AdvancePay credit
Stripe charges 2.9% + $.30 for that transaction ($1.46)
The 10% PhotoDay fee also gets applied to the $40 total ($4.00)
$1.46 + $4.00 = $5.46 gets deducted from the $40 total, leaving a post-fee total of $34.54.
PhotoDay will deposit half** of the $34.54 into the studio's Stripe accounting, bringing the first payout to the studio to $17.27.
*For more information on PhotoDay's fee breakdown, see this article here.
**The reason half the funds are held aside is to make sure there are funds to cover the lab costs at the time of the customer's order.
II. The Customer’s Order Experience
The second part of the transaction occurs once your photos are uploaded, and the customer views the gallery and places their order. Continuing on with our customer who had purchased $40 of AdvancePay credit, let’s assume they then place an order for a $50 package (where the lab costs for the items in the package are $10).
What the customer will see at checkout would be close to this, assuming a non-taxable shipping rate of $4.50:
Total Before Taxes: $54.50
Tax: $3.50 (assuming a 7% tax rate)
Total With Taxes + Shipping: $58.00
AdvancePay Credit Applied: $40.00
————————————
Total Due: $18.00
III. The Final Studio Payout
This final studio payout is calculated by treating AdvancePay as a form of payment, not a discount.
The 10% PhotoDay fee gets applied to the entire order total, which includes products, tax, and shipping:
10% of $58.00 = $5.80
Since $4.00 was already collected at the time of the AdvancePay purchase, only $1.80 is collected now. This $1.80 fee gets subtracted from the $58.00 (total paid by the customer), leaving a difference of $56.20.
Then we subtract:
$10.00 lab cost
$4.50 shipping
$3.50 tax
= $38.20 remaining
Stripe calculates the processing fee (2.9% + $.30) on the $18 paid at checkout = $0.82
Final studio profit from this transaction: $38.20 – $0.82 = $37.38
Now, remember when the first payout resulted in $17.27 being deposited to the studio? We subtract that $17.27, the original $1.46 Stripe transaction fee, and the original $4 PhotoDay fee from the $37.38 profit, leaving the second and final payout to the studio at $14.65.
BOTTOM LINE:
The studio will see two separate payouts for this photo purchase. One initial one of $17.27, and then a second payout of $14.65 after picture day. This brings the total studio payout for this customer transaction to $31.92.
To summarize this scenario:
Initial AdvancePay credit purchase: $40
Retail subtotal of order: $50
Order total after shipping, taxes, and applying their AdvancePay credit: $18
So $58 in total ($40 + $18) is what was collected from this customer.
Then the following costs & fees were subtracted from the $58 collected —
$4.00 PhotoDay fee from initial credit purchase
$1.46 Stripe fee from initial credit purchase
$10.00 lab cost
$3.50 tax
$4.50 shipping
$1.80 additional PhotoDay fee from order ($5.80 total PD fee calculated from $58 total – $4.00 already paid)
$0.82 Stripe fee from order transaction
Which is how we got to the total profit/payout of $31.92