Service Credits: What They Are and How They Work

Service credits are the financial remedy in most connectivity SLAs. If the provider misses agreed targets, you receive a credit against future invoices. Understanding how credits work helps you set realistic expectations.

How credits are calculated

Credits are typically a percentage of the monthly fee for the affected service, increasing with the amount of downtime. For example, a credit might apply when availability drops below the committed level, with higher percentages for larger shortfalls.

Caps on credits

Most agreements cap total credits — often at a portion of the monthly fee. Credits rarely cover the full business impact of an outage.

Claiming credits

Some providers apply credits automatically; others require you to submit a claim within a set period, with ticket numbers and outage details. Keep good records.

What credits don't cover

Lost sales, staff productivity and reputational damage are generally excluded. Credits are an incentive for providers, not insurance for your business.

Why credits still matter

They create accountability and motivate providers to maintain performance. Consistent credit claims also provide evidence when renegotiating contracts.

Track your own data

Monitor your links and log incidents independently, so you can verify provider reports.

Focus on prevention

Since credits do not compensate for real losses, invest in redundancy, monitoring and strong support relationships.

Negotiation tips

For critical services, discuss credit levels, automatic application and chronic outage clauses that allow you to exit contracts if performance repeatedly falls short.

The bottom line

Service credits create accountability, but resilience protects your business. Use both together.

Learn more about Business SLA & Assurance from UbiFi, or talk to our team.