This doesn’t sound legal in California at least.
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.
Tell HN: Anthropic expires paid credits after a year
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Re: Tell HN: Anthropic expires paid credits after a year
#12Accounting rules. If the credits last indefinitely, any unused credits cannot be counted as revenue. Ran into this at my last company when we signed a big contract and gave them hundreds of thousands of dollars in non-expiring credits. Our accountant went nuts when we told him.
Correct, then you effectively become a holder of someone else’s money, which creates all kinds of legal trouble (you need to put that money into a separate, third party’s account that shields it from bankruptcy etc). 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, whi…
Exactly, now you’re a bank (or maybe selling unlicensed securities, either way it’s jeopardy).
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.
Re: Tell HN: Anthropic expires paid credits after a year
#13“Oops, we burned through your money, please give us more by this date” - are you serious? Unfortunately they basically can do whatever they want with credits. https://www.anthropic.com/legal/credit-terms
Customers in California and Washington (at least) may beg to differ. In both of those states, prepaid credit (gift certificates, etc.) is not allowed to have an expiry date attached.
Re: Tell HN: Anthropic expires paid credits after a year
#14Happenned the same for me recently with anthropic and before with openai. It's yearly inflation is infinity which is crazy I switched to openrouter but will find out if they do the same
I believe OpenRouter currently does not expire credits, but in their terms, they explicitly reserve the right to expire them after 1 year, so they might do it in the future.
Re: Tell HN: Anthropic expires paid credits after a year
#15“Oops, we burned through your money, please give us more by this date” - are you serious? Unfortunately they basically can do whatever they want with credits. https://www.anthropic.com/legal/credit-terms
Customers in California and Washington (at least) may beg to differ. In both of those states, prepaid credit (gift certificates, etc.) is not allowed to have an expiry date attached.
Is that specific to gift certificates or any kind of credit, whether digital or on paper?
Re: Tell HN: Anthropic expires paid credits after a year
#16Accounting rules. If the credits last indefinitely, any unused credits cannot be counted as revenue. Ran into this at my last company when we signed a big contract and gave them hundreds of thousands of dollars in non-expiring credits. Our accountant went nuts when we told him.
Correct, then you effectively become a holder of someone else’s money, which creates all kinds of legal trouble (you need to put that money into a separate, third party’s account that shields it from bankruptcy etc). 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, whi…
> you need to put that money into a separate, third party’s account that shields it from bankruptcy
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.
Re: Tell HN: Anthropic expires paid credits after a year
#17Genuine question: is this an issue with auto-reload? Why not just keep a smaller amount in there at a time and let it auto-reload?
Re: Tell HN: Anthropic expires paid credits after a year
#18Unfortunately that's what one gets for offloading intelligence into a XaaS (Intelligence as a Service?, we already got IaaS though). The only hope is that "the market / invisible hand" forces actors to implement more forgiving billing mechanisms and rules via competition or eventual diminished demand. I wouldn't hold my breath though. Anyways, a very good reason to not depend that much on these tools. Especially on a…
Definitely Gaas (generation)
Re: Tell HN: Anthropic expires paid credits after a year
#19Happenned the same for me recently with anthropic and before with openai. It's yearly inflation is infinity which is crazy I switched to openrouter but will find out if they do the same
OpenRouter takes its cut though
Re: Tell HN: Anthropic expires paid credits after a year
#20Accounting rules. If the credits last indefinitely, any unused credits cannot be counted as revenue. Ran into this at my last company when we signed a big contract and gave them hundreds of thousands of dollars in non-expiring credits. Our accountant went nuts when we told him.
There are other numbers besides 1 and infinity, though