Recurring Service Contracts

Recurring service contracts allow you to offer long-term care, maintenance, or support for your products as a subscription. Unlike one-time warranties or fixed-term coverage, service contracts can bill monthly or annually — providing predictable recurring revenue and ongoing engagement with your customers.

These are ideal for merchants selling durable goods, subscription-based products, or anything that benefits from periodic service, inspections, or replacements.

What Is a Service Contract?

A service contract is a paid plan that entitles the customer to scheduled care, check-ins, repairs, or product refreshes over time. Customers are charged on a recurring basis and can cancel anytime — similar to a traditional subscription, but tied to product ownership.

Common examples:

• Yearly tune-up program for fitness equipment
• Monthly cleaning and inspection service for jewelry
• Annual check-in and parts replacement for water filtration systems
• Optional service add-ons for high-end purchases

What It Covers

Coverage depends entirely on your service model. Examples include:

• Physical service (maintenance, inspection, replacement parts)
• Digital service (remote diagnostics, software updates, customer support)
• Scheduled product shipments (filters, batteries, components)
• Access to exclusive replacement offers or VIP support

You can define:

• Number of service events per term
• Frequency of renewal
• Grace period before first eligibility

How It Works

Plan Creation

To create a recurring service contract:

1. Go to Warranties > Create Plan
2. Select Service Contract as the plan type
3. Choose a billing model (monthly or annual)
4. Choose which products the plan will be offered on.
5. Set initial and renewal pricing
6. Define services offered (internally or via 3rd party)
7. Determine claim or usage triggers (automated or on request)

Billing Configuration

Umbrella supports:

• Shopify Billing (Shopify Subscriptions compatible)
• Stripe recurring billing (for headless or custom platforms)
• Manual renewal tracking (optional)

Customer Experience

1. Customer purchases the service plan during checkout or via follow-up email
2. Billing is initiated through Shopify or Stripe
3. Customer receives email confirmations, usage instructions, and account access
4. Umbrella tracks each billing cycle and service eligibility
5. Customers can submit usage requests or claims as defined by your rules
6. You fulfill the service or issue credits/goods according to the agreement

All service activity is accessible through the customer’s branded policy portal.

Claim & Usage Management

You can configure:

• Usage windows (e.g., one request per quarter)
• Manual approval or auto-fulfillment
• Evidence requirements (optional)
• Cancellation terms (pro-rata refund or no refund)

Umbrella logs every service action for transparency and dispute protection.

Analytics & Retention Insights

Track:

• Subscription plan retention rate
• Average contract duration and LTV
• Usage per customer
• Churn events and refund volume
• Profit from renewals vs. fulfillment cost

Use this data to refine pricing, upgrade paths, or lifecycle offers (e.g., convert to an extended warranty after 12 months).

Best Practices

• Start with one simple plan (e.g., “Annual Care Plan”) and expand over time
• Use Shopify email flows to re-market renewals and upgrades
• Offer incentives for customers who stay subscribed beyond a certain term
• Combine with extended warranties to create multi-tier protection bundles

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