> Your organization “xxx” has $xxx Anthropic API credits that will expire on September 03, 2025 UTC.
>
> To ensure uninterrupted service, we recommend enabling auto-reload for your organization. When enabled, we’ll automatically add credits when your balance reaches a specified minimum. You can enable auto-reload in the Anthropic Console.
What they could do is automatically refund the credits to the original account as soon as they expire, but that would mean it’s not the deposit but every API request that would be counted as revenue, which creates a whole lot of other complications. Let alone the fact that refunding after a year is problematic as the original payment methods may have expired, changed, and that you’re still the holder of someone else’s money until the credits are used.
Bottom line: this is industry practice, but given how much flack Anthropic has been getting about the lack of transparency lately, this just adds more fuel to the fire and could be defused by some additional explanation from Anthropic’s side.
This is wrong. You don’t need to do any of that. They paid for a service and it becomes a liability, but there’s no duty to segregate those funds. You do not turn into a money transfer agent just because you sell pre-paid credits to your service.
We ended up revising the contract so that the credits expired after three years. That opened up its own suboptimal outcomes. It was a lesson that was very much learned by us.
On the topic itself - agreed that Anthropic should take a step back and review its policy around comms and good will in general. They’re supposed to be the “good guys” in the AI game - being up front about this stuff is table stakes for them at this point.
Correct.
> If the credits last indefinitely, any unused credits cannot be counted as revenue.
Maybe incorrect? Unless they are cooking the books, the unused credits should reflect as a liability on the books.
When someone pays you for a thing, until they take delivery of it (or use it up if it is a service), you owe them the value of that thing.
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Or is this more just a "this is a convenient free win as a consequence of how we decide to manage our books."
Because the corresponding service hasn't been rendered yet. Conceptually you want the revenue and the costs to generate it recognised at roughly same time else your P/L number is volatile/meaningless
You've gotten the revenue but you haven't paid the cost for that revenue yet. Those are essentially un-cashed checks that the accountants have to keep on the books indefinitely otherwise. Imagine you're chugging along and out of the blue someone shows up with $100M of credits they bought 10 years ago, expecting you to do something for them. Now you're using electricity and displacing new revenue for money that may be long gone.
Then I specifically asked if Anthropic is allowed to expire its prepaid credit for California users. Claude consulted Anthropics credit terms, said the expire in one year, but then said that it's an interesting legal question, and that I might have grounds to complain to the CA Dept of Consumer Affairs!
On the other hand, certainly does cost companies to provide compute.
from https://www.bitsaboutmoney.com/archive/accounting-for-saas-a... :
Accounting for potions: This is fairly easy. If you sell someone a potion, revenue is recognized when they drink the potion. Or use their speed boost. Or skip the progress gate to get to the next dungeon. The fiction doesn’t matter. Reality matters, and the economic reality of the situation is that performance has happened after the temporary thing you’ve promised is delivered. (Technically speaking you do have to recognize the revenue over time if your potions last long enough to be close to monthly SaaS contracts, but practically speaking most are over with in a day and most accounting systems lose precision below that.)
Accounting for swords: If you trade gems for swords then you can ratably recognize the purchase price of the gems when you satisfy your obligation by giving the player a new sword.
Hah, just kidding. That would be way too easy.
You actually need to recognize the prorated cost of the gems exchanged for the sword over the economically useful life of the imaginary sword. “Economically useful life” is a concept with a lot of prior art on it in accounting. You are obligated to, and accountants can point to substantial work on, estimating the economically useful life of factories, cruise ships, CNC machines, bunk beds, Bitcoin miners, dairy cattle, and almost everything else that depreciates.
But there is not a huge amount of prior art on imaginary swords. So you get to pick one of two methods..
The first, by far less commonly used, is to put your head together with very expensive accounting professionals and rigorously answer the question “What events in reality, in the universe we actually live in, would cause the owner of this imaginary sword to believe it had no or de minimis future value to them?” And perhaps that conversation would involve questions like power creep, game balance changes, declining player preference for swords now that you’re offering a sale on imaginary nuclear weapons, etc.
Nobody has time for that conversation or the truly gargantuan amount of implementation engineering required to enforce the decision it comes up with, so they largely use door #2: the economically useful life of a virtual good is by nature upper bounded by the economically useful life of a player’s relationship with our game, so use that instead.
You are required to use your existing data to make a reasonable estimate of how long either the particular player or, failing that, the hypothetical spherical frictionless average player will continue to play the game after the purchase. Then you recognize the price of the sword ratably over that time period.
This causes many virtual goods companies to have bookings (player purchases) diverge sharply from revenue. That depresses the value of their companies, in the real world, and those companies then spend substantial amounts of professional labor taking their frustration out on imaginary swords.
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How would those work?
suppose iTunes gets $1 from every $5 spent there. if Apple sold a $50 gift card, it can pocket $10 and not worry about it. Anthropic, OTOH, sells their API at loss, so unused credits mean losses that await to be materialized. it is unprofitable for them to let you keep the compute bucks forever.
Notice that in some places (with good enough customer protection rules) pre-paid credits can't expire, as expiration itself is a clear abuse of market power: they are forcing out revenue from services not given, even if it is "made clear at buy-time". Especially at such short time horizons like 1-year.
And yet they are supposed to be the good guys.
Of course it is just an excuse to "fuck the customer" and grab the money, but it is not something you should question, because in our society you don't question how companies make money.
And it doesn't matter if you are the offended part, people will just protect the state of affairs,even at their own expense.
Just look how people always find a justification for this crap and look how you are being downvoted for pointing another one.
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This is of course solvable: book the credit as revenue. Transform the dollar credit to points credits that the user can use indefinitely.
Also huge problems (Germany) with yearly payments and how to account for them to minimize liabilities.
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Anthropic tried to charge my card a few weeks back, but fortunately it was declined by my card. I haven't used their service in 6+ months, but they still want to try and take my money
If not, they should refund them. They absolutely should refund them if I close my account.
If I'm going to give you money, I expect something in return for every cent of it. That's just basic decency.
I switched to openrouter but will find out if they do the same
I know gift certificates are not allowed to expire in California and I would hazard a guess that prepaid credits probably wouldn’t be allowed to expire either.
There doesn't seem to be a neutral option here, because it's very hard to account for inflation without the holding party paying dividends at the exact rate to offset it.
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