> For the complete documentation index, see [llms.txt](https://docs.peakcommerce.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.peakcommerce.com/product/rules-and-customizations/rules-overview/governing-the-change-lifecycle.md).

# Governing the Change Lifecycle

Every plan change — an **upgrade**, a **downgrade**, a **cancellation**, an **add-on** — can take effect a different way. **Business Rules** are where you decide, per direction, exactly *how* and *when* a change happens: the moment it applies, whether money is refunded, and what happens to dependent add-ons. Set it once, and every change of that kind follows the same policy automatically — on the customer portal, in CSR and Sales flows, and through your AI agents.

{% embed url="<https://youtu.be/zhmw32P3_D0>" %}

**Where to find it**

Go to **Rules & Automation → Business Rules**. The list groups your rules by direction — Upgrade, Downgrade, Cancellation, Add-On, Remove Add-On, Retention Discount — and the summary cards show how many apply *immediately* versus *at end of term*.

**Build a downgrade rule that protects revenue**

1. Select **New Rule** and give it a clear name, such as *Downgrades hold to renewal*.
2. Set the **Direction** to **Downgrade** — a customer moving down to a smaller plan.
3. Choose the **Timing** — the key lever. Set it to **End of Term** so the downgrade is scheduled for renewal rather than applied now. The customer keeps the plan they've paid for through the current term, and you keep the revenue you've already earned.
4. Set the **Proration** to **No Refund**, because the plan runs its full term — no mid-cycle money back.
5. Leave it **Active** and **Save**. Every downgrade now follows this policy wherever a change can happen.

**The timing options — and what each one means**

Timing is the heart of a business rule. The same controls apply to any direction:

| Timing                     | What happens                                                                                                         |
| -------------------------- | -------------------------------------------------------------------------------------------------------------------- |
| **Immediate**              | The change takes effect right away. Typical for upgrades — the customer gets more, now.                              |
| **End of Term**            | The change is scheduled for the next renewal. Typical for downgrades and cancellations, so the paid term is honored. |
| **Custom Delay**           | The change applies after a set number of days you specify.                                                           |
| **Grace Period**           | Keeps access for a defined window after a cancellation before it finalizes.                                          |
| **Next Chargeable Period** | Aligns the change to the next billing cycle.                                                                         |

Pair timing with **Proration** — **Full Refund**, **Prorated**, or **No Refund** — to decide how the money is settled when the change lands.

**Going deeper**

* **Applies when the subscription is** — scope a rule by subscription state. Trial subscriptions are blocked from changes by default; open *During a free trial* to allow and shape what trial customers can do.
* **Applies to** — limit a rule to a surface (customer self-service, CSR, or Sales), so staff can be given more freedom than customers get on their own.
* **Applicable products and categories** — narrow a rule to specific plans, or leave it empty to govern every product.
* **Add-on dependencies** — for add-on and remove-add-on directions, a rule can decide whether a dependent add-on is cancelled with its base plan, converted to standalone, or held for a decision — so removing a plan never silently strands what was attached to it.

For hard ceilings a rule must never cross — a maximum discount, a downgrade that should be blocked outright — pair Business Rules with the **Policy Engine**, which enforces block, warn, or approval on top of the timing and proration a rule sets.

> **Tip:** Give each direction its own deliberate policy — upgrades immediate, downgrades and cancellations at end of term — and your revenue timing stops depending on who processed the change or which surface it came from.

**Learn more:** [Rules Overview](/product/rules-and-customizations/rules-overview.md) · [Creating and Managing Rule Sets](/product/rules-and-customizations/rules-overview/creating-and-managing-rule-sets.md) · [Protecting Margin with Policies](/product/rules-and-customizations/rules-overview/protecting-margin-with-policies.md).


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