System designMediumsd-g130

Subject RefundsLevel Mid–Senior~40 minCommon in Distributed systems interviewsIndustries Technology

Question

Design the refund and credit handling for a subscription-billing platform. When a customer downgrades, cancels mid-cycle, or is overcharged, the system must compute prorated credits, decide whether to refund to the original payment method or issue account credit (a credit note applied to future invoices), and stay consistent with the revenue ledger. ~1M subscriptions, lots of plan changes daily. Describe the model and how you keep proration, refunds, credits, and recognized revenue consistent.

What a strong answer looks like

Clarify scale and constraints first. Propose a clean component breakdown, then go deep on the hard parts — data model, bottlenecks, consistency, failure modes — and name the trade-offs you are making.

Learn the concepts

Narrate your design

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Run or narrate your approach, then ask the coach.