subscription-integration

name	subscription-integration
description	Guide for implementing subscription billing with Dodo Payments - trials, upgrades, downgrades, and on-demand billing.

Dodo Payments Subscription Integration

Reference: docs.dodopayments.com/developer-resources/subscription-integration-guide

Implement recurring billing with trials, plan changes, and usage-based pricing.

---

Quick Start

1. Create Subscription Product

In the dashboard (Products → Create Product):

• Select "Subscription" type
• Set billing interval (monthly, yearly, etc.)
• Configure pricing

2. Create Checkout Session

import DodoPayments from "dodopayments";

const client = new DodoPayments({
  bearerToken: process.env.DODO_PAYMENTS_API_KEY,
});

const session = await client.checkoutSessions.create({
  product_cart: [{ product_id: "prod_monthly_plan", quantity: 1 }],
  subscription_data: {
    trial_period_days: 14, // Optional trial
  },
  customer: {
    email: "[e-mail]",
    name: "Jane Doe",
  },
  return_url: "https://yoursite.com/success",
});

// Redirect to session.checkout_url

3. Handle Webhook Events

// subscription.active - Grant access
// subscription.cancelled - Schedule access revocation
// subscription.renewed - Log renewal
// payment.succeeded - Track payments

---

Subscription Lifecycle

┌─────────────┐     ┌─────────┐     ┌────────┐
│   Created   │ ──▶ │  Trial  │ ──▶ │ Active │
└─────────────┘     └─────────┘     └────────┘
                                         │
                    ┌────────────────────┼────────────────────┐
                    ▼                    ▼                    ▼
              ┌──────────┐        ┌───────────┐        ┌───────────┐
              │ On Hold  │        │ Cancelled │        │  Renewed  │
              └──────────┘        └───────────┘        └───────────┘
                    │                    │
                    ▼                    ▼
              ┌──────────┐        ┌───────────┐
              │  Failed  │        │  Expired  │
              └──────────┘        └───────────┘

---

Webhook Events

Event	When	Action
subscription.active	Subscription starts	Grant access
subscription.updated	Any field changes	Sync state
subscription.on_hold	Payment fails	Notify user, retry
subscription.renewed	Successful renewal	Log, send receipt
subscription.plan_changed	Upgrade/downgrade	Update entitlements
subscription.cancelled	User cancels	Schedule end of access
subscription.failed	Mandate creation fails	Notify, retry options
subscription.expired	Term ends	Revoke access

---

Implementation Examples

Full Subscription Handler

// app/api/webhooks/subscription/route.ts
import { NextRequest, NextResponse } from "next/server";
import { prisma } from "@/lib/prisma";

export async function POST(req: NextRequest) {
  const event = await req.json();
  const data = event.data;

  switch (event.type) {
    case "subscription.active":
      await handleSubscriptionActive(data);
      break;
    case "subscription.cancelled":
      await handleSubscriptionCancelled(data);
      break;
    case "subscription.on_hold":
      await handleSubscriptionOnHold(data);
      break;
    case "subscription.renewed":
      await handleSubscriptionRenewed(data);
      break;
    case "subscription.plan_changed":
      await handlePlanChanged(data);
      break;
    case "subscription.expired":
      await handleSubscriptionExpired(data);
      break;
  }

  return NextResponse.json({ received: true });
}

async function handleSubscriptionActive(data: any) {
  const {
    subscription_id,
    customer,
    product_id,
    next_billing_date,
    recurring_pre_tax_amount,
    payment_frequency_interval,
  } = data;

  // Create or update user subscription
  await prisma.subscription.upsert({
    where: { externalId: subscription_id },
    create: {
      externalId: subscription_id,
      userId: customer.customer_id,
      email: customer.email,
      productId: product_id,
      status: "active",
      currentPeriodEnd: new Date(next_billing_date),
      amount: recurring_pre_tax_amount,
      interval: payment_frequency_interval,
    },
    update: {
      status: "active",
      currentPeriodEnd: new Date(next_billing_date),
    },
  });

  // Grant access
  await prisma.user.update({
    where: { id: customer.customer_id },
    data: {
      subscriptionStatus: "active",
      plan: product_id,
    },
  });

  // Send welcome email
  await sendWelcomeEmail(customer.email, product_id);
}

async function handleSubscriptionCancelled(data: any) {
  const {
    subscription_id,
    customer,
    cancelled_at,
    cancel_at_next_billing_date,
  } = data;

  await prisma.subscription.update({
    where: { externalId: subscription_id },
    data: {
      status: "cancelled",
      cancelledAt: new Date(cancelled_at),
      // Keep access until end of billing period if cancel_at_next_billing_date
      accessEndsAt: cancel_at_next_billing_date
        ? new Date(data.next_billing_date)
        : new Date(),
    },
  });

  // Send cancellation email
  await sendCancellationEmail(customer.email, cancel_at_next_billing_date);
}

async function handleSubscriptionOnHold(data: any) {
  const { subscription_id, customer } = data;

  await prisma.subscription.update({
    where: { externalId: subscription_id },
    data: { status: "on_hold" },
  });

  // Notify user about payment issue
  await sendPaymentFailedEmail(customer.email);
}

async function handleSubscriptionRenewed(data: any) {
  const { subscription_id, next_billing_date } = data;

  await prisma.subscription.update({
    where: { externalId: subscription_id },
    data: {
      status: "active",
      currentPeriodEnd: new Date(next_billing_date),
    },
  });
}

async function handlePlanChanged(data: any) {
  const { subscription_id, product_id, recurring_pre_tax_amount } = data;

  await prisma.subscription.update({
    where: { externalId: subscription_id },
    data: {
      productId: product_id,
      amount: recurring_pre_tax_amount,
    },
  });

  // Update user entitlements based on new plan
  await updateUserEntitlements(subscription_id, product_id);
}

async function handleSubscriptionExpired(data: any) {
  const { subscription_id, customer } = data;

  await prisma.subscription.update({
    where: { externalId: subscription_id },
    data: { status: "expired" },
  });

  // Revoke access
  await prisma.user.update({
    where: { id: customer.customer_id },
    data: {
      subscriptionStatus: "expired",
      plan: null,
    },
  });
}

Subscription with Trial

const session = await client.checkoutSessions.create({
  product_cart: [{ product_id: "prod_pro_monthly", quantity: 1 }],
  subscription_data: {
    trial_period_days: 14,
  },
  customer: {
    email: "[e-mail]",
    name: "John Doe",
  },
  return_url: "https://yoursite.com/welcome",
});

Customer Portal for Self-Service

Allow customers to manage their subscription:

// Create portal session
const portal = await client.customers.createPortalSession({
  customer_id: "cust_xxxxx",
  return_url: "https://yoursite.com/account",
});

// Redirect to portal.url

Portal features:

• View subscription details
• Update payment method
• Cancel subscription
• View billing history

---

On-Demand (Usage-Based) Subscriptions

For metered/usage-based billing:

Create Subscription with Mandate

const session = await client.checkoutSessions.create({
  product_cart: [{ product_id: "prod_usage_based", quantity: 1 }],
  customer: { email: "[e-mail]" },
  return_url: "https://yoursite.com/success",
});

Charge for Usage

// When usage occurs, create a charge
const charge = await client.subscriptions.charge({
  subscription_id: "sub_xxxxx",
  amount: 1500, // $15.00 in cents
  description: "API calls for January 2025",
});

Track Usage Events

// payment.succeeded - Charge succeeded
// payment.failed - Charge failed, implement retry logic

---

Subscriptions with Credit Entitlements

Attach credit entitlements to subscription products to grant credits each billing cycle:

Setup

1. Create a credit entitlement (Dashboard → Products → Credits)
2. Create/edit a subscription product
3. In Entitlements section, click Attach next to Credits
4. Configure: credits per cycle, trial credits, proration, low balance threshold

Checkout with Credits

// Product has credit entitlement attached (e.g., 10,000 AI tokens/month)
const session = await client.checkoutSessions.create({
  product_cart: [{ product_id: "prod_pro_with_credits", quantity: 1 }],
  subscription_data: {
    trial_period_days: 14, // Trial credits can differ from regular amount
  },
  customer: { email: "[e-mail]" },
  return_url: "https://yoursite.com/success",
});

Credit Lifecycle per Cycle

Each billing cycle:

1. New credits issued — credit.added webhook fires
2. Usage deducts credits — Automatically via meters or manually via API
3. Cycle ends — Unused credits expire or roll over based on settings
4. Overage handled — Forgiven, billed, or carried as deficit

Handle Credit Webhooks in Subscription Context

case 'credit.added':
  // Credits issued with subscription renewal
  await syncCreditBalance(data.customer_id, data.credit_entitlement_id, data.balance_after);
  break;
case 'credit.balance_low':
  // Notify customer or suggest upgrade
  await sendLowBalanceAlert(data.customer_id, data.credit_entitlement_name, data.available_balance);
  break;
case 'credit.deducted':
  // Track consumption for analytics
  await logCreditUsage(data.customer_id, data.amount);
  break;

Plan Changes with Credits

When customers upgrade/downgrade, credit proration can be enabled:

• Proration enabled: Remaining credits are prorated based on time left in cycle
• Proration disabled: Credits continue as-is until next cycle

Plan Changes

Upgrade/Downgrade Flow

// Get available plans
const plans = await client.products.list({
  type: "subscription",
});

// Change plan
await client.subscriptions.update({
  subscription_id: "sub_xxxxx",
  product_id: "prod_new_plan",
  proration_behavior: "create_prorations", // or 'none'
});

Handling subscription.plan_changed

async function handlePlanChanged(data: any) {
  const { subscription_id, product_id, customer } = data;

  // Map product to features/limits
  const planFeatures = getPlanFeatures(product_id);

  await prisma.user.update({
    where: { externalId: customer.customer_id },
    data: {
      plan: product_id,
      features: planFeatures,
      apiLimit: planFeatures.apiLimit,
      storageLimit: planFeatures.storageLimit,
    },
  });
}

---

Access Control Pattern

Middleware Example (Next.js)

// middleware.ts
import { NextResponse } from "next/server";
import type { NextRequest } from "next/server";

export async function middleware(request: NextRequest) {
  // Check subscription status
  const session = await getSession(request);

  if (!session?.user) {
    return NextResponse.redirect(new URL("/login", request.url));
  }

  const subscription = await getSubscription(session.user.id);

  // Check if accessing premium feature
  if (request.nextUrl.pathname.startsWith("/dashboard/pro")) {
    if (!subscription || subscription.status !== "active") {
      return NextResponse.redirect(new URL("/pricing", request.url));
    }

    // Check if plan includes this feature
    if (!subscription.features.includes("pro")) {
      return NextResponse.redirect(new URL("/upgrade", request.url));
    }
  }

  return NextResponse.next();
}

React Hook for Subscription State

// hooks/useSubscription.ts
import useSWR from 'swr';

export function useSubscription() {
  const { data, error, mutate } = useSWR('/api/subscription', fetcher);

  return {
    subscription: data,
    isLoading: !error && !data,
    isError: error,
    isActive: data?.status === 'active',
    isPro: data?.plan?.includes('pro'),
    refresh: mutate,
  };
}

// Usage in component
function PremiumFeature() {
  const { isActive, isPro } = useSubscription();

  if (!isActive) {
    return <UpgradePrompt />;
  }

  if (!isPro) {
    return <ProUpgradePrompt />;
  }

  return <ActualFeature />;
}

---

Common Patterns

Grace Period for Failed Payments

async function handleSubscriptionOnHold(data: any) {
  const gracePeriodDays = 7;

  await prisma.subscription.update({
    where: { externalId: data.subscription_id },
    data: {
      status: "on_hold",
      gracePeriodEnds: new Date(
        Date.now() + gracePeriodDays * 24 * 60 * 60 * 1000
      ),
    },
  });

  // Schedule job to revoke access after grace period
  await scheduleAccessRevocation(data.subscription_id, gracePeriodDays);
}

Prorated Upgrades

When upgrading mid-cycle:

// Dodo handles proration automatically
// Customer pays difference for remaining days
await client.subscriptions.update({
  subscription_id: "sub_xxxxx",
  product_id: "prod_higher_plan",
  proration_behavior: "create_prorations",
});

Cancellation with End-of-Period Access

// subscription.cancelled event includes:
// - cancel_at_next_billing_date: boolean
// - next_billing_date: string (when access should end)

if (data.cancel_at_next_billing_date) {
  // Keep access until next_billing_date
  await scheduleAccessRevocation(
    data.subscription_id,
    new Date(data.next_billing_date)
  );
}

---

Testing

Test Scenarios

1. New subscription → subscription.active
2. Renewal success → subscription.renewed + payment.succeeded
3. Renewal failure → subscription.on_hold + payment.failed
4. Plan upgrade → subscription.plan_changed
5. Cancellation → subscription.cancelled
6. Expiration → subscription.expired

Test in Dashboard

Use test mode and trigger events manually from the webhook settings.

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Resources

• Subscription Guide
• On-Demand Subscriptions
• Webhook Events
• Customer Portal
• Credit-Based Billing
• Credit Webhook Events