Author: Eliza

Prefer to see a video? Click here to watch Oli go through the 10 best practises.

Most pre-order advice is generic theory. We analyzed over $85 million in actual Shopify pre-order sales across 1M+ orders to find what really works. This guide shares battle-tested Shopify pre-order best practices based on real data, not guesswork.

Running pre-orders on Shopify can transform your cash flow and validate product demand before committing to inventory. Shopify’s pre-order system lets merchants sell products before they’re available, but execution matters. Some stores see conversion lifts while others deal with high cancellation rates and operational chaos.

The difference comes down to execution. In this guide, you’ll learn 10 proven best practices backed by the last 5+ years of our experience in the space. We’ll include when to charge upfront versus later, how to prevent fulfillment mistakes, and which metrics actually matter. Whether you’re launching your first pre-order or optimizing an existing campaign, these strategies will help you run pre-orders that work.

What Makes a Pre-Order Strategy Successful?

Before diving into specific best practices, it’s worth understanding what separates successful pre-order campaigns from failures. After analyzing 1M+ pre-orders, three pillars consistently appear in high-performing campaigns.

The Three Pillars of Pre-Order Success

Clear customer expectations: Customers need to know exactly when their product ships, how payment works, and what happens if delays occur. Vague language like “coming soon” creates uncertainty that kills conversions.

Smart payment structure: The right payment model depends on your lead times, price points, and risk tolerance. Charge-upfront works great for short timelines but can hurt conversion for longer waits. Charge-later and deposits offer flexibility but require more operational setup.

Operational readiness: Pre-orders touch fulfillment, inventory, customer service, and sometimes your 3PL or ERP. Without proper workflows, you risk shipping too early, overselling, or creating support ticket storms.

Framework: How to Think About Best Practices

The best approach is to start small, test your workflows, then scale what works. List one or two products for pre-order first. Validate your payment flow, customer communication, and fulfillment process. Learn what resonates with your customers before expanding catalog-wide.

Match your strategy to your business model. A fashion brand doing seasonal drops has different needs than a tech accessories company with 90-day production timelines. The following best practices apply broadly, but you’ll need to adapt them to your situation.

Best Practice 1: Choose the Right Payment Model for Your Lead Times

Payment structure is the most critical decision you’ll make. Our data shows 43.8% of pre-order listings use charge-later (vaulted card), making it the most popular approach. But that doesn’t mean it’s right for every campaign.

When to Charge Upfront vs Later vs Deposits

Charge-upfront works best for lead times under 30 days. When products ship quickly, customers are comfortable paying immediately. You get instant cash flow and avoid the complexity of deferred charging. This approach dominates short restocks and quick turnaround launches.

Charge-later shines for longer or uncertain timelines beyond 30 days. Vaulting the customer’s card without immediate capture reduces refund risk for extended waits. If your production timeline shifts or supply chain delays happen, you haven’t charged customers yet. The data backs this up: 43.8% of merchants choose this model.

Deposits reduce barriers for high-ticket items. Taking 10-50% upfront on a $300+ product shows customer commitment while making the purchase more accessible. You get some cash flow now and collect the balance when ready to ship. Our data shows 12.6% of listings use deposits, often concentrated in premium categories.

Payment Model Distribution from 1M+ Pre-Orders

From our data, here’s how merchants actually charge for pre-orders:

• 43.8% use charge-later (deferred capture with vaulted card)
• 28.7% use capture-only (payment links or manual capture)
• 14.9% charge upfront (immediate payment)
• 12.6% use deposits (partial upfront payment)

Your lead time and price point should drive this decision. A beauty brand launching limited-edition palettes in 14 days? Charge upfront. An apparel company with 120-day production runs? Charge-later makes more sense. A premium tech brand selling $500 products? Consider deposits.

Best Practice 2: Set Clear, Specific Shipping Timelines

Generic language hurts conversions. “Ships soon” or “coming soon” creates uncertainty that makes customers hesitate. Specific dates build confidence, even if those dates are months away.

Why Vague Language Hurts Conversions

When customers can’t assess if the wait is acceptable, they bounce. “Ships in March” lets them decide if they’re willing to wait. “Available soon” forces them to guess, and most won’t take that risk.

Clear timelines also reduce customer service volume. When expectations are set upfront, fewer people email asking “when will this ship?” Your team spends less time answering the same question repeatedly.

The Data on Lead Times

28.1% of pre-orders ship within 121-150 days, making four to five months the most common window. But plenty of successful campaigns run shorter (30-60 days) or longer (180+ days).

Pre-order periods between two to six weeks work well for maintaining excitement without losing interest. Shorter feels rushed; longer and customers might forget or lose enthusiasm. But if your production timeline demands 120 days, own it. Transparency beats false urgency.

How to Communicate Delays

Production delays happen. Supply chains shift. The key is proactive communication. Send updates before customers ask. Even “no news” updates showing progress build trust.

Automated email sequences work best here. Set up triggers for key milestones: production started, quality checks complete, items shipped to warehouse, ready to fulfill. Customers appreciate knowing their order hasn’t been forgotten, especially during longer waits.

Best Practice 3: Start With One to Two Products Before Scaling

One of the biggest mistakes merchants make is rolling out pre-orders across their entire catalog too quickly. Start small, learn your workflows, then scale.

Why the “Test Small” Approach Works

Listing one or two products for pre-order lets you validate every touchpoint. You’ll discover friction points in checkout, identify unclear messaging, and find operational gaps before they affect hundreds of orders.

Maybe your fulfillment team needs better pre-order tagging. Maybe customers ask the same question 20 times that should be in your FAQ. Maybe your 3PL doesn’t recognize pre-order holds properly. Better to find these issues with 50 orders than 500.

Starting small also helps you gauge customer appetite. If your first pre-order campaign sees strong uptake, you know the model works for your audience. If conversions lag, you can adjust payment terms, messaging, or timing before expanding.

Common Mistakes When Scaling Too Fast

Operational overwhelm: Your team suddenly manages regular orders and dozens of pre-order campaigns simultaneously. Fulfillment holds don’t get released on time. Customer emails pile up. Mistakes happen.

Customer service spike: Support volume often increases with pre-orders, especially if messaging isn’t clear. Scale before your team is ready, and response times suffer. Negative experiences spread faster than positive ones.

Inconsistent execution: When you’re learning, each campaign teaches you something. Rush to scale, and you repeat the same mistakes across multiple products instead of iterating quickly on a smaller set.

Best Practice 4: Decide on Mixed Cart Strategy Early

Should customers be able to buy in-stock items and pre-orders in the same cart? This operational decision significantly impacts fulfillment complexity.

The Mixed Cart Dilemma

Allowing mixed carts increases average order value. A customer buying a pre-order item might add in-stock accessories, boosting their total spend. From a revenue perspective, it’s attractive.

But mixed carts create fulfillment challenges. Do you split shipments (ship in-stock now, pre-order later)? That doubles shipping costs. Do you hold everything until the pre-order ships? That delays immediate items and frustrates customers who expected them sooner.

The Data: 62% Prohibit Mixed Carts

62.1% of stores prohibit mixing pre-orders with regular inventory in the same cart. The operational simplicity wins for most merchants. Separate carts mean clear workflows: pre-orders follow one path, regular orders another. No confusion, no split shipments, no delayed in-stock items.

The 38% who allow mixed carts typically have sophisticated fulfillment setups. They’ve figured out split shipment logistics or have operational slack to manage the complexity. If you’re starting out, isolated carts are the safer bet.

When to Allow Mixed Carts

Consider mixed carts if you have:

• Automated fulfillment systems that can handle split shipment logic
• Higher margins that absorb dual shipping costs
• Strong operational bandwidth to manage increased complexity
• Customer segments who prioritize convenience over speed

For most Shopify stores, especially early in their pre-order journey, keeping carts isolated reduces headaches. You can always relax this restriction later once your operations are dialed in.

Best Practice 5: Use Fulfillment Holds to Prevent Premature Shipping

The number one operational mistake with pre-orders is accidental early shipment. A pre-order flows into your fulfillment system, someone doesn’t notice it’s a pre-order, and it attempts to ship too early. Now you’ve got an angry warehouse team and a stock/order system mismatch.

How Fulfillment Holds Work

Fulfillment holds automatically block pre-order items from shipping until you explicitly release them. When you create a pre-order listing, the system tags those orders. Your fulfillment system (whether in-house or a 3PL) sees the hold and skips them in processing.

When stock arrives and you’re ready to fulfill, you release the hold. Orders flow into your normal fulfillment queue. This separation keeps pre-orders out of the way until you’re ready.

For Shopify stores, PreProduct automatically applies fulfillment holds at the order level. For BigCommerce and WooCommerce, orders stay entirely out of your platform admin until you release them for fulfillment.

Integration With 3PLs and ERPs

Not all systems understand pre-orders natively. If you use a third-party logistics provider or ERP system, you’ll need to ensure they respect hold states. Some integrations handle this automatically; others require manual workflows initially.

The key is testing before you scale. Place test pre-orders, let them flow through your systems, and confirm they don’t accidentally ship. Managing pre-orders with your 3PL requires upfront coordination but saves major headaches later.

Best Practice 6: Optimize Your Product Page Messaging

Your product page is where conversions happen or don’t. Clear pre-order messaging sets expectations and builds confidence.

What to Display Prominently

“Pre-order” button: Replace “Add to Cart” with “Pre-order Now” or similar. This immediately signals that the product isn’t shipping today. Customers who miss this detail often create support tickets or cancellations later.

Expected ship date: Put this above the fold, impossible to miss. “Ships March 15, 2026” or “Estimated delivery: April 2026” gives customers the information they need to commit.

Payment terms: State clearly how payment works. “Pay now, ships later” for charge-upfront. “Pay 50% now, 50% when shipped” for deposits. “Reserve now, charged when shipped” for charge-later. No surprises.

Copy That Converts

Focus on benefits, not just logistics. Instead of “Pre-order now,” try “Reserve yours before they sell out” or “Lock in early access pricing.”

Use scarcity elements if genuine. “Only 200 units available for pre-order” creates urgency. But don’t manufacture false scarcity; customers see through it and trust erodes.

Include social proof when available. “Over 500 pre-ordered in the first week” validates demand. Customer reviews from previous launches build credibility. Testimonials about your brand’s reliability help overcome pre-order hesitation.

Best Practice 7: Automate Customer Communication

Pre-orders require more customer communication than regular orders. Automated email sequences reduce manual work while keeping customers informed, whether its through your pre-order application or ESP like Klaviyo.

Essential Email Touchpoints

Order confirmation: Immediately after purchase, confirm the order, restate the ship date, explain payment terms, and set clear expectations. This is your chance to address common questions proactively.

Progress updates: For longer waits (60+ days), send periodic updates. “Production underway,” “Quality checks complete,” “Arriving at warehouse next week.” These touchpoints maintain excitement and show the order is progressing.

Shipping notification: When the item finally ships, celebrate it. “Your pre-order is on the way!” Include tracking details and thank them for their patience.

For charge-later or deposit campaigns, also send a “payment upcoming” email a few days before charging the balance. This reduces payment failures and gives customers a heads-up.

Reducing Support Burden

If you’re not using a pre-order app that provides customer portals, add a comprehensive FAQ section (or link to a pre-order policy) to your pre-order product pages. Address common questions:

• When will this ship?
• How does payment work?
• Can I cancel or modify my pre-order?
• What happens if there’s a delay?
• Can I add other items to my order?

Customer portals also help. Let customers check their order status, see estimated ship dates, and view payment schedules without contacting support. Self-service reduces ticket volume significantly.

Proactive communication equals fewer tickets. Every email update prevents 10 “when will this ship?” inquiries.

Best Practice 8: Track the Right Metrics

Revenue matters, but other metrics reveal campaign health and areas for optimization.

Beyond Revenue: What to Measure

Cancellation rate: The industry average is 5.4% annually. If you’re significantly above this, investigate why. Common causes include unclear timelines, poor communication, or payment issues. High cancellation rates signal friction in your process.

Conversion rate versus regular products: Compare pre-order product conversion to in-stock items. Are customers hesitating? The average ecommerce conversion rate sits between 2.5 and 3%, so use that as a baseline. If pre-order conversion lags significantly, test different payment models, clearer messaging, or shorter timelines.

Support ticket volume: Track pre-order-related support requests. If tickets spike, your messaging probably needs work. The most common questions reveal gaps in your product page copy or email communication.

Average order value (AOV): Do pre-orders increase or decrease AOV compared to regular orders? This helps inform mixed cart strategy and bundling opportunities.

Using Data to Optimize

High cancellation rate? Check if your shipping timeline is clear enough. Look at when cancellations happen; if they cluster around payment capture, that’s different friction than early cancellations.

Low conversion? Test different payment options. Some products convert better with deposits; others with charge-later. Run A/B tests on product page messaging. Even small copy changes can move the needle.

Rising support tickets? Audit your FAQs. Add the most common questions to your product page. Improve email communication to proactively address concerns.

Best Practice 9: Be Strategic About Discounting

Here’s a surprise: 90.4% of pre-orders have no discount applied. Pre-orders already offer early access value. You don’t need to discount to drive demand.

When Discounts Make Sense

Early bird incentives: Tiered discounts can accelerate early orders. “25% off first week, 15% off second week, 10% off until launch.” This rewards commitment and helps forecast demand sooner.

Large order commitments: Offering a discount for customers who pre-order multiple units can boost order size. “Buy three, save 15%” works well for products with gift-giving potential or bulk-buy appeal.

First-time launches: If you’re an unknown brand validating a new product, a modest discount can reduce risk perception and get initial traction.

When to Skip Discounts

Already compelling products: If demand is strong without discounting, don’t leave money on the table. Limited editions, highly anticipated releases, and products with strong brand equity don’t need discounts.

Premium positioning: Discounting can signal lower quality or desperation. If your brand trades on premium positioning, maintain that with pre-orders. Full price reinforces value.

Margin-sensitive products: If margins are already thin, discounting hurts profitability. Remember, pre-orders improve cash flow but don’t fundamentally change unit economics.

The data shows most merchants succeed without discounting. Test it, but don’t assume you need to discount to drive pre-order conversions.

Best Practice 10: Plan for Delays and Communicate Proactively

Supply chain issues happen. Production runs late. Shipping delays occur. The difference between a disaster and a minor hiccup is how you communicate.

Reality: Delays Happen

No matter how careful your planning, some pre-order campaigns face delays. Components arrive late. Quality issues require rework. Shipping logistics shift. Accepting this reality lets you plan for it rather than scramble when it happens.

Build buffer into your timelines. If production typically takes 90 days, quote 120 days. Under-promise and over-deliver works better than the reverse.

How to Handle Delays Like a Pro

Communicate early and often: As soon as you know there’s a delay, tell customers. Don’t wait until the promised ship date passes. Proactive transparency builds trust; reactive excuses destroy it.

Explain what happened: Customers appreciate honesty. “Our supplier experienced production delays due to equipment failure” is better than vague corporate speak. You don’t need to overshare, but context helps.

Offer options: Give customers a choice. “We’re delayed by four weeks. You can wait for your order, or we can process a full refund. Let us know.” Respecting their decision maintains trust for future launches.

Provide updates: Don’t go silent after announcing a delay. Send progress updates as the situation evolves. “We’ve received the delayed components and resumed production” shows forward momentum.

Consider compensation: For significant delays, offering a discount on future purchases or a small refund can maintain goodwill. It’s not always necessary, but it’s a tool in your toolkit.

The merchants who handle delays well often retain customer loyalty. Those who go silent or make excuses burn bridges.

Bonus: Advanced Automation With Shopify Flow

Once your manual processes are dialed in, automation can scale your operations significantly. Shopify Flow offers powerful pre-order automation for Plus merchants, but earlier plans also benefit from app-based automation.

When You’re Ready to Scale

Start with simple automations: auto-tagging pre-order customers for segmented email campaigns, triggering customer service notifications when pre-orders are placed, or updating inventory tracking spreadsheets automatically.

Shopify Flow pre-order automation can trigger workflows based on inventory changes. When stock is added to a pre-order product, automatically capture payments and release fulfillment holds. When a pre-order cancellation happens, fire a refund workflow and update your demand forecast.

You can build conditional logic: if a pre-order customer also bought in-stock items (mixed cart), route to a different fulfillment workflow. If a charge fails, send an automated dunning email and schedule a retry.

The Maturity Model

Manual: You create listings, manage holds, trigger charges, and send emails manually. This works great for your first few campaigns and helps you learn the workflow.

Semi-automated: You automate customer emails and basic tagging but still manually manage fulfillment releases and charging. Good middle ground for growing stores.

Fully automated: Inventory triggers charges, fulfillment releases happen automatically, customer communications fire based on events, and reporting updates in real-time. This is where high-volume pre-order merchants operate.

Don’t jump to full automation too quickly. Master the manual process first. Automation only scales what you already understand.

Frequently Asked Questions

What is the best payment method for Shopify pre-orders?

It depends on your lead time. Charge-upfront works best for shipping within 30 days. Charge-later (vaulted card) is ideal for 30+ day timelines or uncertain schedules. Deposits make sense for high-ticket items above $250 to reduce purchase barriers. The data shows 43.8% of merchants use charge-later, making it the most common approach.

How long should a pre-order window be?

Two to six weeks is the sweet spot for maintaining interest without overwhelming customers. However, your production timeline drives this more than ideal preferences. If manufacturing takes 120 days, be transparent about it. The data shows 28.1% of pre-orders ship within 121-150 days, so longer windows can work if expectations are clear.

Should I allow mixed carts with pre-orders and in-stock items?

Most stores (62.1%) prohibit mixed carts to keep fulfillment simple. Mixed carts require either split shipments (higher costs) or holding all items until pre-orders ship (frustrated customers). If you’re starting out, separate carts reduce operational complexity. Consider mixed carts only if you have sophisticated fulfillment systems and margins that support split shipping.

What’s a good pre-order cancellation rate?

The industry average is 5.4% annually. If your cancellation rate exceeds 8-10%, investigate your timeline clarity, payment communication, and customer expectations. High cancellations often signal unclear messaging or unrealistic timelines rather than product issues.

How do I prevent pre-orders from shipping too early?

Use fulfillment holds that automatically block pre-order items from your regular fulfillment queue. These holds tag pre-orders so they don’t accidentally ship when someone processes standard orders. When stock arrives and you’re ready, release the holds to flow pre-orders into fulfillment. This prevents the most common operational mistake: premature shipping.

Start Running Smarter Pre-Orders

These 10 Shopify pre-order best practices come from analyzing $85M+ in actual sales, not theory. Choose the right payment model for your lead times, set clear expectations, start small to test workflows, and scale what works. Track cancellation rates and conversion metrics. Communicate proactively, especially when delays happen.

Pre-orders let you take orders and revenue sooner, validate demand before inventory commitments, and build hype for new launches. But execution separates successful campaigns from operational headaches. Start with one or two products. Master your workflows. Then expand.

Ready to run pre-orders that actually work? PreProduct helps Shopify stores manage everything from payment flexibility to fulfillment holds, with data-backed tools built for founders who need pre-orders to just work.

Prefer to watch a video? Click here, to see Oli explain the 4 options.

Intro

Around 30% of cart abandonment happens because customers can’t afford to pay the full price upfront. Whether you’re launching a new product, restocking bestsellers, or selling high-ticket items, offering flexible payment options can be the difference between a lost sale and a conversion.

Shopify payment plans give your customers the flexibility to pay over time while you maintain control over cash flow. From native solutions like Shop Pay Installments to custom deposit structures for pre-orders, this guide breaks down every option available, when to use each one, and how to implement them in your store.

We’ll cover Shop Pay Installments, third-party payment plan apps, and pre-order specific payment strategies. By the end, you’ll know exactly which payment model fits your products, lead times, and business goals.

What are payment plans

Shopify payment plans let customers split purchases into multiple payments instead of paying the full amount upfront. These payment structures come in several forms, each designed for different business needs and customer preferences.

Types of payment plans

Buy-now-pay-later Installments: Customers pay in 2-4 equal installments over weeks or months, i.e. “buy now, pay later” services (BNPL). Shop Pay Installments is Shopify’s native solution for this, partnering with Affirm to offer interest-free or low-interest payment options.

Split Payments: Customers use multiple payment methods for a single transaction, like paying part with a credit card and part with a gift card. This is primarily available for Shopify Plus merchants or through Shopify POS for in-person sales.

Deposits: You collect a percentage upfront, typically 20-50%, then charge the remaining balance later. This works well for pre-orders, made-to-order items, or custom products where full payment isn’t necessary until the item ships.

Multi-Step Payment Plans: Customers pay according to a custom schedule you or they define, spreading payments across multiple charges. For example, a $1,200 item could be split into 6 $200 payments over six months. Similar to BNPL Installments, but with more flexibility.

Why Payment Plans Matter for Shopify Merchants

Higher Conversion Rates: Merchants offering BNPL Installments saw between 20-40% increases in average order value according to Shopify’s own data. When customers can afford to buy now and pay later, they’re more likely to complete checkout.

Reduced Cart Abandonment: Shop Pay Installments reduces abandoned carts by 28% compared to third-party buy now, pay later solutions. The familiar, trusted Shop Pay interface removes friction at checkout.

Access to Higher-Ticket Purchases: Payment plans make expensive items accessible to more customers. A $800 purchase becomes four $200 payments, opening your products to buyers who couldn’t afford the full price upfront.

Improved Cash Flow for Pre-orders: For products with long lead times, taking deposits or deferred payments lets you validate demand and secure revenue before investing in inventory. Based on data from over 1 million pre-orders, 43.8% of merchants use charge-later models where no payment is taken upfront. Learn more about setting up pre-orders on Shopify to see how payment plans fit into your overall strategy.

Ways to offer payment plans

1. Shop Pay Installments

Shop Pay Installments is Shopify’s built-in buy now, pay later option, powered by Affirm. It’s the simplest way to offer Shopify payment plans if you’re based in the US, Canada, or UK and use Shopify Payments.

How Shop Pay Installments Works

Customers see installment options directly on product pages and at checkout. They can choose to split their purchase into 2 or 4 interest-free payments every two weeks for orders between $50 and $1,000. For larger purchases, monthly installment plans are available.

The merchant receives the full payment upfront from Affirms, even though the customer pays over time. This means you’re not exposed to the risk of failed payments or defaults. Affirms handle all collections, customer communication, and payment processing.

Payment Options Available

Standard Package (available to all eligible merchants):

• 2 or 4 interest-free payments every 2 weeks
• Monthly installments up to 12 months
• Order values between $50 and $17,500

Premium Package (available for higher-volume merchants):

• All standard options
• Interest-free monthly payments up to 12 months
• Monthly installments with interest up to 24 months
• Order values up to $30,000
• Interest rates from 10-36% APR for monthly plans

Eligibility Requirements

To offer Shop Pay Installments, you need to meet these criteria:

• Store based in the United States, Canada, or United Kingdom
• Selling in USD, CAD, or GBP
• Shopify Payments activated
• Shop Pay enabled on your store

For Shopify POS, you’ll need version 8.4.0 or later to accept installments in person using QR codes.

Merchant Benefits

Performance Metrics: One in four merchants saw 50% average order value increases after enabling Shop Pay Installments. Repeat customers using installments complete checkout 30% faster than first-time users.

No Risk to Merchant: Affirms advance the full payment to you immediately. If a customer defaults on their installment plan, that’s Affirms’ problem, not yours. You’re paid in full regardless of what happens downstream.

Seamless Integration: Shop Pay Installments appears automatically at checkout once enabled. No code changes, no theme modifications, no additional setup beyond activating the feature in your Shopify Payments settings.

Limitations to Consider

Geographic Restrictions: Only available in the US, Canada, and UK. If you serve international customers, they won’t see installment options.

Requires Shop Pay Adoption: Customers must use Shop Pay at checkout. If they prefer other payment methods, they can’t access installments through this option.

Not Ideal for Long Pre-Order Lead Times: Shop Pay Installments charges customers immediately and spreads the payments over weeks or months. For pre-orders with 3-6 month lead times, this means customers pay in full long before they receive the product.

Limited Customization: You can’t adjust the installment terms, deposit amounts, or payment schedules. Affirms control the structure based on order value and customer creditworthiness.

2. Third party payment gateway apps

If Shop Pay Installments doesn’t fit your needs, third-party Shopify payment plan apps offer more flexibility. These solutions let you customize installment terms, offer deposit options, and control payment timing in ways the native Shopify option doesn’t allow.

When to Use Apps Instead of Shop Pay Installments

You Need Custom Installment Schedules: Apps let you define exactly when payments happen. Want to charge customers every three weeks instead of every two? Need payments triggered by specific dates or events? Apps give you that control.

Pre-order Specific Requirements: For products with extended lead times, you may want to take a deposit now and charge the balance only when the item ships. Shop Pay Installments doesn’t support this charge-later approach.

You Want Merchant Control Over Terms: With apps, you set the rules. Define deposit percentages, choose how many installments to offer, and decide whether to charge interest or fees.

Payment Flexibility Beyond Credit: Some apps support payment plans for any payment method your store accepts, not just credit cards through Shop Pay.

Non‑Shopify native apps

These solutions break out of Shopify’s native checkout flow entirely, using external payment processors and custom checkout pages.

Example: Paythen (via Stripe)

• Pricing: 2% transaction fee, no monthly subscription
• How it works: Uses Stripe outside Shopify checkout, connected via Zapier
• Best for: Maximum flexibility when breaking outside of Shopify is acceptable
• Technical note: Email-based Zapier workflow due to Shopify API limitations

Trade-offs:

• ✅ Fully customizable payment schedules
• ✅ Works without Shopify Payments
• ❌ Breaks native Shopify checkout experience
• ❌ Orders processed outside Shopify’s native flow
• ❌ More complex setup and maintenance

How to Choose the Right App

Consider Your Product Mix: If you primarily sell in-stock items with immediate shipping, standard installment apps work well. For pre-orders or made-to-order products, you need apps that support deposits and charge-later functionality.

Payment Schedule Flexibility: Do you need simple 2-4 installments, or do you want to define custom schedules? Apps like Paythen and PreProduct offer flexibility, while others provide preset options.

Integration Requirements: If you use Shopify Payments and want the tightest integration, look for apps that use Shopify’s purchase options API. If you use Stripe or other gateways, apps like Paythen are designed for that stack.

3. Third-party invoicing apps

These apps work by sending invoice emails to customers outside the Shopify checkout flow. Customers receive payment links via email and complete payment separately from your store.

Example: SPD Split Payment & Deposit

• Pricing: $17.95/month with 7-day free trial
• How it works: Customers receive email invoices for balance payments
• Best for: Simple deposit workflows where email invoicing is acceptable
• Limitation: Requires customers to take action on emailed payment links

Trade-offs:

• ✅ Works with Shopify native payment gateway
• ✅ Simple setup
• ❌ Customer friction (separate email/link process)
• ❌ Higher risk of non-payment if customers ignore emails

4. Third-party Shopify Purchase Options apps

These apps leverage Shopify’s native purchase options API, keeping everything within Shopify’s checkout while adding flexible deferred‑charge payment capabilities.

Example: PreProduct

• Pricing: Fixed or usage‑based (see PreProduct’s current pricing)
• How it works: Uses Shopify’s purchase options to vault the customer’s payment method, and then trigger charges on an ad‑hoc or scheduled basis.
• Native integration: Orders stay in Shopify admin, native checkout maintained
• Payment plans: Optional multi‑step payment plan offered for products on pre‑order.

Advantages:

• ✅ Fully native Shopify experience
• ✅ Orders appear in Shopify admin immediately
• ✅ Works with Shopify checkout, product pages, and cart
• ✅ Supports charge‑later (vaulted cards) and deposits natively, so further customer actions are not required
• ✅ Optional payment plans feature on top of base payment models
• ✅ No customer friction (stays in native flow)
• ❌ Multi‑step payment plans are only supported for Shopify Plus merchants.
• ❌ Currently only supports products on pre‑order, not in‑stock items

Best for: Merchants who want flexible payment options that don’t require further customer actions while maintaining Shopify’s native checkout experience, especially for pre‑orders.

Payment Plans for Pre-orders

Pre-orders have different payment needs than in-stock products. Lead times matter and your payment model directly impacts both conversion rates and cash flow.

Data from over 1 million pre-orders representing $85 million in sales shows exactly how merchants structure Shopify payment plans for products that aren’t ready to ship yet.

Two Core Pre-Order Payment Models

When it comes to pre-orders, two payment models dominate because they work within Shopify’s native checkout while giving you flexibility on when to collect payment.

1. Charge-Later (Vaulted Card)

What It Is: Customers complete checkout without paying anything upfront. Their payment method is securely stored (vaulted), and you charge them when the product is ready to ship.

Market Adoption: 43.8% of pre-order listings use charge-later, making it the most popular payment model for pre-orders.

Best For:

• Products with long lead times (3+ months)
• New product launches where you want maximum conversion
• Situations where you’re validating demand before committing to production
• Customers hesitant to pay for something they won’t receive for months

Technical Requirement: Only works with payment gateways that support vaulted cards, which means Shopify Payments or PayPal. Other payment providers don’t offer the ability to securely store card details and charge them later without customers re-entering information.

Why It Works: Removing the upfront payment barrier maximizes conversion rates. Customers commit to the purchase without the psychological friction of paying today for something that ships in four months. You validate demand before investing in inventory.

Data Insight: 75,781 pre-order listings in our dataset used charge-later. The vaulted card option wasn’t available until 2022, explaining its rapid adoption in recent years as merchants discovered its benefits.

With Payment Plans: You can split the final charge into multiple installments instead of charging the full amount when ready to ship. For example, charge 50% when stock arrives, then 50% one month later.

2. Deposit Upfront (Partial Payment)

What It Is: Collect a partial payment during checkout, typically 10-50% of the product price, then automatically charge the remaining balance when items are ready to ship.

Market Adoption: 12.6% of pre-order listings use deposits.

Best For:

• High-ticket items ($500 and above)
• Custom or made-to-order products
• Situations where you need cash flow to start production
• Products where customer commitment matters more than maximizing conversion

Why It Works: Deposits secure customer commitment and provide working capital to fund production. A 30% deposit on a $1,000 item gives you $300 per order to invest in materials or manufacturing before the product ships.

Example: A furniture maker selling custom pieces for $2,500 collects a 40% deposit ($1,000) at order time. This covers materials and commits the customer. The remaining $1,500 is charged when the piece is completed three months later.

With Payment Plans: You can split either the deposit or the remaining balance into installments. For example, take 25% upfront, then charge the remaining 75% across three monthly payments.

Multi-Step Installment Plans for Pre-orders

Beyond the above pre-order models, you can offer customers the option to split pre-order payments into multiple installments that trigger automatically on a schedule you define. The payment method is vaulted at checkout, so no further customer actions are required.

How It Works: Customers pay in 2, 3, 4, or more installments. The system automatically processes charges based on your configured frequency: daily, weekly, or monthly intervals.

Example Schedule:

• Order placed: $250 deposit (25%)
• 30 days later: $250 payment
• 60 days later: $250 payment
• 90 days later: $250 final payment
• Total: $1,000 product paid over three months

Customer Experience: Customers see their full payment schedule upfront. A customer portal shows payment history, upcoming charges, and estimated shipping dates. They can also opt to pay early for a discount if you enable that feature.

Technical Requirement: Multi-step payment plans require more sophisticated payment infrastructure. On Shopify, this functionality is available for Shopify Plus stores. PreProduct also offers this for non-Shopify platforms.

Best For: High-ticket items ($1,000+) where even a 30-40% deposit is a significant amount, or alternatively for price sensitive customers who prefer to spread the cost over time.

Choosing Between Charge-Later and Deposits

Here’s how to decide which primary pre-order payment model fits your situation:

Choose Charge-Later When:

• ✅ Lead times are 1+ months (long wait for customers)
• ✅ You want maximum on-site conversion (no upfront payment barrier)
• ✅ You’re validating demand before committing to production
• ✅ Cash flow for production isn’t needed immediately
• ✅ You’re comfortable with vaulted card technology (Shopify Payments or PayPal)

Example: New product launch with 4-month lead time. You want to validate demand without asking customers to pay today for something that ships in the fall.

Choose Deposits When:

• ✅ High-ticket items ($500+) where commitment matters
• ✅ You need working capital to start production
• ✅ Made-to-order or custom products
• ✅ You want to reduce refund/cancellation risk
• ✅ Lead times are 1+ months and you need cash flow before shipping

Example: Custom furniture at $2,500. A 40% deposit ($1,000) covers materials and commits the customer. You charge the remaining $1,500 when the piece is completed three months later.

Offer multi-step payment plans When:

• ✅ Order values exceed $1,000
• ✅ You want to split charges across multiple dates
• ✅ Customers request installment options
• ✅ You’re on Shopify Plus or using an app that supports this

Technical Considerations for Shopify Payment Plans

Understanding the technical requirements behind payment plans helps you avoid implementation issues and choose solutions that actually work with your stack.

Vaulted Card Technology Explained

A vaulted card is a securely stored payment method that can be charged at any future date without the customer re-entering their information. This is in contrast to traditional authorization holds, which have a 7-30 day expiration window.

How It Works:

1. Customer enters payment details at checkout
2. The payment gateway securely stores (vaults) those details
3. You trigger charges against the vaulted payment method up until the product is paid off.
4. Once ready to ship or when all of the product is paid for, you fulfill the order.

Which Gateways Support It: Only Shopify Payments and PayPal offer vaulted card functionality for Shopify merchants. Other payment providers don’t support storing card details and charging them later.

Why It’s Critical: This is the only way to implement true deferred-charge pre-orders without authorization window limitations on native Shopify.

Alternative Approach: If your payment gateway doesn’t support vaulted cards, use invoices or payment links. Customers receive a link to pay when you’re ready to charge them, which lets them use any payment method.

Failed Payment Recovery

When you charge vaulted cards or process installment payments, some will fail due to expired cards, insufficient funds, or closed accounts.

Best-in-class payment-plan apps let you trigger a dunning flow that emails customers, retries the charge, and cancels only after clear notice and a grace period. This protects revenue while keeping ops lightweight. At PreProduct, are flow is comprised of an email sequence that emails customers, retries the charge, and cancels only after clear notice and a grace period.

What customers receive: The default failed charge email includes the specific decline reason (expired card, insufficient funds, etc.) and asks customers to update their payment details so the deferred charge can be retried.

Expected Failure Rates: For deferred charges, expect 5-10% of charges to fail initially. Most resolve after retry or customer update, but plan for 2-3% permanent failures.

Comparing Shopify Payment Plan Solutions: Which Is Right for You?

Now that you understand the potential approaches to Shopify payment plans, here’s how to decide which approach fits your business.

Shop Pay Installments – Best For:

✅ US, Canada, or UK-based stores with Shopify Payments activated
✅ Want a hands-off buy now, pay later solution
✅ Is happy with a schedule of 2 – 4 installments, either bi-weekly or monthly.
✅ Selling in-stock products with immediate shipping
✅ Orders between $50 and $1,000 (or up to $30,000 with premium)
✅ Want to increase average order value without complexity

Cost: Free for merchants (Affirms handle financing)
Setup Time: Minutes (toggle in Shopify Payments settings)
Complexity: Minimal

Third party payment gateway apps – Best For:

✅ Need custom installment schedules beyond Shop Pay’s options
✅ Don’t use Shopify Payments or need more payment gateway flexibility
✅ Want merchant control over payment terms and timing

Cost: $17.95/month OR 2% transaction fees depending on app
Setup Time: 15-30 minutes for most apps
Complexity: Moderate (more configuration options)

Third-party invoicing apps – Best For:

✅ Using a gateway that can’t vault cards but still need to collect later payments
✅ Long or uncertain lead times where you’ll charge only when you’re ready to ship
✅ B2B or high-touch orders that need custom payment schedules per customer
✅ Want to accept any payment method supported by your invoice provider (cards, ACH, wallets)

Cost: Typically standard payment processing fees per invoice (no extra app fee)
Setup Time: Minutes (configure invoicing in your payment gateway or app)
Complexity: Low to Moderate (more manual follow-up unless automated reminders are enabled)

Shopify Purchase Options apps (like PreProduct) – Best For:

✅ Running pre-orders which offer an option to go on a payment plan
✅ Want to maintain Shopify’s native checkout experience
✅ Want to take advantage of Shopify’s ability to ‘vault’ the customer’s payment method, so no further customer actions are required.
✅ Want to offer customisable plans with a range of payment frequencies and intervals.

Cost: Both Fixed and commission only pricing options available
Setup Time: 20-40 minutes for full customisation
Complexity: Moderate (native Shopify integration)
Architecture: Uses Shopify purchase options API, fully native

Best Practices for Implementing Shopify Payment Plans

Once you’ve chosen your Shopify payment plan approach, following these best practices ensures smooth operations and happy customers.

Customer Communication

Set Clear Expectations on Product Pages:

• State whether the product is in-stock or pre-order
• Show estimated shipping or fulfillment dates
• Explain the payment structure (when they’ll be charged)
• Display the payment schedule for installments

Show Payment Details Before Checkout:

• For deposits, show both the deposit amount and remaining balance
• For installments, display the full payment schedule
• Include total cost (never hide fees or final price)
• Explain when each charge will occur

Send Automated Reminders for Upcoming Charges:

• Email customers 1-2 days before charging their vaulted card
• Include the charge amount, date, and reason (product shipping soon)
• Provide a link to cancel or update payment information when needed
• Set expectations for when they’ll receive the product

Provide a Customer Portal for Self-Service:

• Show order status and current fulfillment stage
• Display payment history and upcoming charges
• Allow customers to update payment information
• Enable self-serve cancellations within your policy window

Operational Considerations

Test Manually Before Automating: Start by manually managing your payment plans. Understand how payments flow, when charges trigger, and how your fulfillment process handles holds. Once you’re confident in the process, look into automating the payment plan process.

Set Up Failed Payment Workflows: Before you launch, configure dunning sequences for failed charges. Automate retry logic, notification emails, and eventual cancellation. Don’t handle these manually or you’ll drown in customer service tickets.

Monitor Payment Success Rates: Track what percentage of charges succeed, fail temporarily, or fail permanently. If your failure rate exceeds 10%, investigate whether customers are receiving proper notification about upcoming charges.

Have Clear Refund Policies: Define your refund and cancellation terms upfront. Example: “If you cancel before [production date], we’ll refund your deposit in full. After [date], deposits are non-refundable but can be applied to other products.”

Compliance & Policies

Transparent Terms and Conditions: Your payment plan terms should be visible before customers commit. Include information about when charges occur, refund policies, and what happens if payment fails.

Clear Refund/Cancellation Policies: Make it easy for customers to understand their options. Can they cancel before production starts? Is the deposit refundable? What if the product is delayed?

State-Specific Regulations: Some states have specific laws about payments for products not received straight away. Check regulations in states where you have significant customer bases.

Conversion Optimization

Display Payment Plan Options Prominently: Don’t hide installment options in small text. Feature them near the price on product pages. “Pay in 4 interest-free payments of $75” can boost conversion significantly.

Use “As Low As $X/Month” Messaging: Psychology matters. “$240 per month” sounds more accessible than “$2,880 total price.” Show both, but lead with the monthly amount.

Show Total Cost and Payment Schedule: Transparency builds trust. Always show the full price, how many payments, and when each payment occurs. Never surprise customers with hidden fees or unclear terms.

Reduce Friction with One-Click Payment Plan Selection: Let customers choose installment options with a single click or toggle. The easier you make it, the more customers will use payment plans.

Conclusion

Shopify payment plans give you multiple ways to make purchases more accessible while maintaining control over cash flow. The key is understanding the architectural differences between solutions and choosing the approach that fits your products, checkout requirements, and business goals.

Here are the key takeaways:

Four architectural approaches exist:

1. BNPL Installments apps (such as Shopify’s Shop Pay Installments)
2. Third-party invoicing apps that send invoice emails on a schedule
3. Third-party apps that use Shopify’s native purchase options API to vault the customer’s payment method and trigger charges on an ad-hoc or scheduled basis.
4. Third-party apps that use a third-party payment gateway and checkout, such as Stripe.

Native integration matters: If you want to maintain Shopify’s checkout experience with orders flowing directly to your admin, choose Shop Pay Installments or a solution built on Shopify’s purchase options API (like PreProduct for pre-orders) rather than an external checkout system.

Payment plans are optional add-ons: Both regular buy-now orders and pre-orders can support multi-step payment plans if needed, letting you split charges across multiple dates for high-ticket items.

Technical requirements matter: Vaulted card support (Shopify Payments or PayPal only) enables charge-later functionality. Without it, you’ll need invoicing apps that send payment links via email.

Ready to implement Shopify payment plans in your store? For pre-order specific payment plans with charge-later, deposits, and multi-step installments, explore PreProduct’s pre-order solution.

Prefer to watch a video? Click here to see Oli talk charging later on Shopify.

In analyzing $85 million in pre-order sales data, one payment method stands out: 43.8% of successful pre-order listings use charge-later payments. This approach dominates because it solves a critical problem for Shopify merchants running pre-orders with extended lead times. Here’s why this method works and how to implement it for your store.

Shopify’s standard authorization period creates a significant challenge for pre-orders. You’re forced to either charge customers before their products are ready (increasing refund risk) or pay surcharges to extend authorization holds. Charge-later payments with vaulted cards eliminate this problem entirely, giving you unlimited flexibility on when to collect payment.

By the end of this guide, you’ll understand exactly when to use charge-later payments, how to set them up on Shopify, and how to handle the edge cases that trip up most merchants. We’ll show you the technical setup and the operational workflows, backed by real data from over one million pre-orders.

What is Charge Later on Shopify?

Charge later (also called deferred payments or deferred charges) allows customers to place a pre-order and complete checkout without being charged immediately. Instead, their payment details are securely vaulted with Shopify Payments, PayPal, or Stripe, and you trigger the charge when you’re ready to fulfill, whether that’s 30 days, 90 days, or six months later.

The customer goes through a normal checkout experience at the time of pre-order. They agree to a future charge, their card details are saved securely, and you collect payment when stock lands or production completes. This is different from a traditional authorization hold, which expires after 7-30 days and incurs surcharges.

How Vaulted Card Technology Works

When a customer checks out for a charge-later pre-order, Shopify creates a payment mandate. This represents the customer’s permission for you to charge their saved payment method at a future date. The card details are stored securely (vaulted) by the payment processor, not by you or your pre-order app.

The technical foundation uses Shopify’s selling plan API and payment mandate system. Your pre-order app configures billing policies that specify “charge at a future date” rather than “charge now.” When you’re ready to collect payment, you trigger the deferred charge through the orderCreateMandatePayment mutation.

For merchants, this means you maintain complete control over payment timing without worrying about authorization periods expiring. For customers, it means they can commit to a purchase without the immediate financial outlay.

Why Charge Later Matters for Pre-orders

Authorization periods create artificial constraints on pre-orders. Shopify Payments provides a standard 7-day authorization window. After day seven, you pay an additional 1.75% surcharge on top of regular processing fees. The maximum authorization period is 30 days, even with surcharges.

This doesn’t work for most pre-orders. If your production timeline is 60 days, 90 days, or longer, authorization holds fail completely. You’d need to charge customers immediately or risk losing the authorization entirely.

Charge-later payments solve this by removing time constraints. You pay standard Shopify Payments rates (typically 2.9% + 30¢) regardless of when you charge, whether that’s three days or three months after checkout. There’s no surcharge for waiting, and no expiration date on the vaulted card.

From a customer psychology perspective, charge-later also converts better for longer lead times. Being charged when the product ships rather than months before feels fairer and builds trust. According to our data, 56.4% of merchants prefer charge-later methods over charge-upfront, making it the most popular pre-order approach.

How Charge Later Works: The Technical Foundation

Understanding the technical mechanics helps you set up charge-later pre-orders correctly and troubleshoot issues when they arise.

Shopify’s Vaulted Card System

Vaulted cards rely on Shopify’s purchase options framework, which was introduced to support pre-orders, try-before-you-buy programs, and subscriptions. As a merchant, you won’t be interacting with this framework directly; instead, you’ll be using it via a pre-order app like PreProduct. The system uses three key components:

Selling Plans define the payment structure. For charge-later pre-orders, the selling plan specifies a billing policy with a future charge date or interval. This can be a specific date (“charge on March 15”) or relative to checkout (“charge 30 days after purchase”).

Payment Mandates represent the customer’s authorization to charge their vaulted payment method. When a customer completes checkout for a deferred payment, Shopify creates a mandate that links their saved card to the specific order.

Payment Terms indicate when payment should be collected. You can query the PaymentTerms object to check the due date and remaining balance, then use the orderCreateMandatePayment mutation to trigger the charge.

Currently, both Shopify Payments and PayPal support deferred charges for Shopify stores. Any credit card type that functions in standard checkout can be vaulted for later charging. Stripe also supports vaulted cards for headless or custom implementations.

The Customer Experience

From the customer’s perspective, charge-later checkout looks nearly identical to a standard purchase. They add the pre-order item to their cart, proceed to checkout, and enter their payment information as usual.

The key difference is messaging. Best practices require clear communication that they’re agreeing to a future charge. This typically appears as a purchase options agreement label at checkout: “You agree to be charged the full amount when your order is ready to ship.”

After completing checkout, the customer receives an order confirmation email. The order appears in their Shopify account with a status indicating deferred payment. Many pre-order apps provide customer portals where buyers can view their order status, estimated ship date, and upcoming charges.

When you trigger the charge later, customers should receive an “upcoming charge” notification a few days before the payment processes. This gives them time to update payment methods if needed and sets clear expectations.

The Merchant Backend

In your Shopify admin, charge-later pre-orders appear as regular orders but with specific indicators that payment is deferred. The order status typically shows “Payment pending” or similar until you trigger the charge.

Your pre-order app (like PreProduct) provides the interface to manage deferred charges. You can trigger charges individually per customer, in bulk by listing, or through automated rules based on inventory levels.

When you’re ready to collect payment, you trigger the deferred charge. The system attempts to charge the vaulted card and updates the order status based on success or failure. Successful charges move the order to “paid” status and can proceed to fulfillment. Failed charges require retry attempts or customer contact to update payment methods.

For Shopify stores, fulfillment holds prevent pre-order items from shipping before payment collection. The order remains on hold until you both charge successfully and release the fulfillment hold, giving you complete control over the timing.

Charge Later vs Other Payment Methods

Choosing the right payment method for your pre-orders depends on lead time, product price, customer preferences, and operational capacity. Here’s how charge-later compares to alternatives:

Method	Best For	Pros	Cons	Processing Cost
Charge-Later	30-180 day lead times	Lower refund risk, no time limits, customer preference	Potential failed charges, no upfront revenue	Standard (2.9% + 30¢)
Charge-Upfront	Under 7 days	Immediate cash flow, funds verified	Higher refund risk, customer hesitation	Standard (2.9% + 30¢)
Authorization Hold	7-30 days*	Funds verified, standard flow	1.75% surcharge after day 7, 30-day max	Higher (4.65% + 30¢ after day 7)
Capture-Only	Uncertain timelines	Maximum flexibility, no payment until ready	Manual payment links, extra customer step	Standard (2.9% + 30¢)
Deposits	High-value items ($300+)	Secures commitment, improves cash flow	More complex, still need balance charge	Standard (2.9% + 30¢)

*Only Shopify+ has access to the extended 30 days authorization period.

When to Choose Charge-Later

Charge-later works best when:

Lead times extend beyond 30 days. This is the sweet spot where authorization holds become expensive or impossible, but shipping is too far out to charge upfront.

Product margins support cancellations and failed charges. While the cancellation rate is typically low (under 5%), you need enough margin to handle occasional losses from expired cards or insufficient funds.

You want to maximize quantity of pre-orders. For lead times over 30 days, we see charge-later pre-orders converting better on the product page than charge-upfront, due to customers not having to part with any money today.

You can communicate effectively. Charge-later requires clear messaging about payment timing, estimated ship dates, and charge notifications. Your pre-order app should faciliate this with clear messaging and notifications.

When Charge-Upfront Works Better

Some scenarios favor charging immediately:

Very short lead times mean customers are more comfortable paying upfront, as it’s essentially a regular order with slightly longer shipping times.

Critical cash flow needs require revenue now rather than later, especially for smaller businesses funding production.

Low refund risk products with proven demand and reliable timelines see fewer cancellations.

Established customer relationships with high trust may prefer to pay upfront and wait for delivery.

The Deposit Hybrid Approach

Taking a deposit upfront, then charging the balance later combines advantages of both methods. You collect 10-50% at checkout to secure commitment and improve cash flow, then charge the remaining balance when ready to ship.

According to our data, 12.6% of pre-orders use the deposit-upfront vaulted card method. This approach works particularly well for higher-ticket items ($300+) where full upfront payment feels like too much commitment, but a deposit demonstrates serious buyer intent.

The Data: Who Actually Uses Charge Later?

Real merchant behavior reveals what works in practice, not just theory.

Adoption Statistics

Analyzing one million pre-orders representing $85.3 million in sales, charge-later emerges as the clear favorite:

43.8% of pre-order listings use charge-later (75,781 listings), making it the single most popular payment method. This beats charge-upfront (14.9%), capture-only payment links (28.7%), and deposit-upfront arrangements (12.6%) combined.

47.8% of pre-orders are charged within 30 days of checkout, while 25.0% are charged immediately (day zero). This timing distribution shows merchants use charge-later flexibly based on their specific production and shipping schedules.

Notably, vaulted card functionality wasn’t available until 2022, showing rapid adoption since introduction. The technology has clearly solved a real pain point for pre-order merchants.

Why It’s the Most Popular Method

Several factors drive charge-later adoption:

Customer conversion advantages. For lead times over 30 days, asking customers to pay months before receiving their product creates psychological resistance. Charging when ready to ship feels fairer and reduces perceived risk.

Operational flexibility. Manufacturing and shipping timelines shift. Charge-later gives you room to adjust without refunding customers or dealing with expired authorizations.

Cost efficiency. Compared to extended authorization periods with 1.75% surcharges, charge-later costs the same as a regular transaction regardless of delay.

Risk mitigation for long lead times. If production delays force you to push dates back, customers who haven’t paid yet are typically more understanding than those who paid months ago.

The success rate for deferred charges is generally high (over 95% for merchants with good communication practices), making the approach both merchant-friendly and low-risk.

How to Set Up Charge Later Pre-orders on Shopify

Implementing charge-later pre-orders involves technical setup, operational configuration, and customer communication planning.

Prerequisites

Before you can offer charge-later pre-orders, verify these requirements:

Shopify Payments or PayPal must be enabled as your payment processor. Third-party gateways don’t support vaulted cards through Shopify’s native checkout. If you’re using a different processor, you’ll need to switch or use capture-only payment links instead.

Your store must use the current checkout (not legacy checkout.liquid). Vaulted cards aren’t compatible with older checkout customizations. If you’re on Shopify Plus with checkout.liquid customizations, you’ll need to migrate to Checkout Extensibility.

You need a pre-order app that supports deferred charges. Not all Shopify pre-order apps offer charge-later functionality. Apps like PreProduct are built specifically to handle vaulted card workflows.

Your theme should be compatible with app blocks or willing to accept minor template changes for pre-order buttons and messaging.

Step-by-Step Setup Guide

Step 1: Verify Shopify Payments is Active

Navigate to Settings > Payments in your Shopify admin. Confirm Shopify Payments shows as your active payment provider. If you’re using PayPal, ensure PayPal automatic payments are enabled.

Step 2: Install a Pre-order App with Vaulted Card Support

Visit the Shopify App Store and install a Shopify pre-order app that supports charge-later functionality. PreProduct, for example, provides charge-later, deposit, and multi-step payment plan options.

After installation, the app will guide you through adding its app block to your theme via the theme customizer, or provide a code snippet to add manually.

Step 3: Create Your First Charge-Later Listing

In your pre-order app dashboard, create a new listing and select “charge-later” or “deferred payment” as the payment type. You’ll configure:

• Which product or variants to include
• Lead time or estimated ship date
• Custom messaging for the product page, cart, and checkout
• Whether to allow mixed carts (pre-order + regular items)
• Charge trigger conditions (manual or automatic based on inventory)

Step 4: Customize Product Page Messaging

Clear communication is critical. Your product page should explicitly state:

• This is a pre-order item
• When the item is expected to ship
• That payment will be charged when ready to ship (or specific date if known)
• Terms and conditions for the pre-order

Example messaging: “Pre-order now. Your card will be saved securely and charged one week before your estimated ship date of March 2026.”

Step 5: Set Up Charge Trigger Automation

Decide how you’ll trigger charges:

Manual triggering gives you complete control. When inventory arrives, you log into your pre-order app and trigger charges by listing or customer.

Inventory-based automation monitors your Shopify inventory levels. When stock reaches a threshold, the system automatically triggers charges for waiting pre-orders.

Shopify Flow automation (for Scale and Scale Plus plans) lets you build custom workflows. For example: “When variant inventory > 0 AND order has tag ‘pre-order-march’, trigger deferred charge.”

Step 6: Test the Complete Flow

Before launching to customers, run test orders:

• Place a test pre-order as a customer would
• Verify checkout messaging is clear
• Confirm the order appears correctly in Shopify admin
• Trigger a test charge and verify it processes
• Check that fulfillment holds work as expected

Best Practices for Implementation

Set Realistic Lead Times

Underpromise and overdeliver. If you think 60 days, say 60-75 days. Delays happen, and customers who haven’t been charged yet are more forgiving than those waiting months after payment.

Send “Upcoming Charge” Notifications

Email customers 1-3 days before charging. This gives them time to update payment methods if their card expired or contact you with questions. Apps like PreProduct automate these notifications.

Make Payment Timing Crystal Clear

Don’t bury payment terms in fine print. State clearly on the product page, in the cart, at checkout, and in order confirmation emails when payment will be collected.

Plan Your Charge Workflow

When inventory arrives, how will you process hundreds of deferred charges? Set aside time for this, monitor charge success rates, and be ready to handle failed payments quickly.

Enable Customer Self-Service

Customer portals that show order status, estimated ship dates, and payment schedules dramatically reduce support tickets. Let customers see when they’ll be charged and update payment methods themselves.

Advanced Strategies: Combining Charge Later with Deposits

Deposit-based pre-orders with vaulted card balance charging offer a middle ground between full upfront payment and pure charge-later.

The Deposit + Charge Later Hybrid

With this model, customers pay a portion (typically 20-50%) at checkout as a deposit, then you charge the balance when ready to ship. The deposit accomplishes several goals:

Secures buyer commitment beyond just vaulted card authorization. Someone who has paid a deposit is less likely to cancel than someone with only a saved payment method.

Improves short-term cash flow while still deferring the majority of revenue until fulfillment. This helps fund production without requiring full upfront payment.

Reduces perceived risk for high-ticket items. A $100 deposit on a $400 product feels more reasonable than $400 months before delivery.

The balance charge works identically to a full charge-later pre-order, using the same vaulted card system. When you trigger the charge, the system collects the remaining amount automatically.

When to Take Deposits vs Full Charge-Later

Use deposits for:

• Products over $300 where full payment feels like too much commitment
• First-time buyers or new product launches where you want to gauge serious interest
• Longer lead times (90+ days) where full charge-later might see higher cancellation rates
• Custom or made-to-order items where you’re investing upfront in production

Use full charge-later for:

• Established products with proven demand
• Price points under $200 where deposits add complexity without much benefit
• Short to medium lead times (30-60 days)
• Restock campaigns where customers know exactly what they’re getting

According to our data, 12.6% of pre-orders use the deposit-upfront vaulted card method. While less common than pure charge-later, it fills an important niche for higher-value pre-orders.

Calculating Optimal Deposit Percentages

The right deposit amount balances commitment, cash flow, and customer psychology:
5-30% deposits work for low-priced items ($50-$300). Enough to show commitment without being a major barrier.

30-50% deposits make sense for higher-ticket items ($300-$1000+). Customers expect to put more down for expensive purchases.

50%+ deposits for very high-value items (over $1000) or custom work where you’re investing significantly in production.

Test different deposit percentages and monitor your cancellation rates. If deposits are too low, you’ll see more cancellations. Too high, and you’ll reduce conversion at checkout.

Multi-Step Payment Plans

For Shopify Plus stores, PreProduct offers multi-step payment schedules that spread charges across multiple dates, X days apart, for example:

• 25% at checkout
• 25% at 30 days
• 25% at 60 days
• 25% at 90 days (fulfillment)

This installment approach works particularly well for high-ticket pre-orders ($500+) where even a 50% deposit feels substantial. It also improves cash flow throughout the production cycle rather than all at fulfillment. It’s also a great approach for particuarly price sensitive customers.

Multi-step plans use the same vaulted card system, just with multiple scheduled charges. Each charge triggers automatically on its scheduled date. Customers can view their payment schedule and upcoming charges in their customer portal.

Handling Failed Payments & Edge Cases

When using the vaulted card approach, some charges will fail. Having a recovery process is essential.

Why Payments Fail

Expired cards are the most common issue. If your lead time is 90+ days, a percentage of customers’ cards will expire before you charge them. Credit cards typically expire every 3-4 years, so longer pre-order windows see higher expiration rates.

Insufficient funds happen when customers’ accounts don’t have enough funds to cover the charge. This can happen for a variety of reasons, including financial situations changing between checkout and charge.

Fraud detection blocks occur when the charge amount or timing triggers the card issuer’s fraud alerts. Sometimes a large charge months after the original authorization looks suspicious.

Bank authorization issues include various technical problems: closed accounts, card blocked for online purchases, international transaction restrictions, etc.

Dunning Process & Recovery

A dunning process is your system for recovering failed payments. Here’s an effective approach:

Immediate retry: When a charge fails, your system should automatically retry 24 hours later. Many failures are temporary (network issues, daily spending limits reached, etc.) and resolve themselves.

Customer notification email: After the first retry fails, send an email explaining the charge failed and providing a link to update payment methods. Make this easy with a customer portal where they can enter new card details.

Second retry: 3-5 days after the first failure, retry again. By now, customers who received the email have had time to update their information.

Final notice: 7-10 days after the initial failure, send a final notice that their order will be cancelled if payment can’t be collected within X days.

Automatic cancellation: After a peiord of retries, consider automatically canceling the order and release the inventory. Some merchants give customers even longer, but each day the inventory is held is a day it can’t be sold to someone else.

Good pre-order apps handle this dunning sequence. PreProduct, for example, handles retry schedules and customer communication, while giving you visibility into charge success rates and recovery efforts.

Failed Charge Best Practices

Send “upcoming charge” emails 3-7 days before charging. This catches card expiration issues before they become problems. Customers can update payment methods proactively.

Make payment method updates easy. Customer portals that let buyers update cards without contacting support dramatically improve recovery rates.

Be understanding in communication. Failed payments are often embarrassing for customers. Use supportive language: “We weren’t able to process your payment” rather than “Your card was declined.”

Consider flexible timelines. If a customer needs an extra week to resolve payment issues and you have the inventory flexibility, extending the deadline builds loyalty.

Learn from failure patterns. Track which products or lead times see higher failure rates. Extremely long lead times might need deposit models or shorter charge windows. Remember its your choice if deposits are refundable or not.

Edge Cases & Solutions

Customer requests cancellation before charging:

This is straightforward with charge-later. You haven’t collected payment yet, so you simply cancel the order in your system and release the inventory. No refund processing needed.

Production delays extend beyond promised dates:

Update customers about the delay, most likely over email. Since you haven’t charged them yet, they’re typically more understanding than if they’d paid months ago. Offer the option to cancel or wait.

Partial inventory arrives:

If you can fulfill some but not all orders, trigger charges only for customers you can ship to. Prioritize based on order date, or offer the option to wait for the next batch. Auto-charge automations often work on a first-come, first-served basis.

Customer wants to change order details:

Before charging, order modifications are simpler. Update the order details in your system. After charging, you’re dealing with refunds and reorders.

Inventory arrives early:

You can charge earlier than originally promised as long as you communicated that payment would be collected “when ready to ship” rather than a specific date. Best practice is to notify customers the charge is coming even if it’s early.

Shopify Authorization Period vs Charge Later

Understanding the authorization period problem helps explain why charge-later emerged as the preferred solution.

The Authorization Period Problem

When a customer places a regular Shopify order, Shopify Payments authorizes their card. This puts a hold on the funds, verifying the card is valid and has sufficient balance. The merchant then has a window to capture (collect) that payment.

For Shopify Payments, the standard authorization period is 7 days. After day seven, you can extend the authorization, but Shopify charges an additional 1.75% surcharge on top of standard credit card fees (which are typically 2.9% + 30¢).

So an extended authorization costs 4.65% + 30¢ instead of the standard 2.9% + 30¢. That’s nearly 60% higher in percentage fees.

The maximum authorization period, even with surcharges, is 30 days (Shopify+ only, otherwise 7 days). After that, the authorization expires completely and you can’t collect payment at all.

For pre-orders with lead times beyond 30 days, authorization holds simply don’t work. You’re forced to either:

1. Charge customers immediately (if lead times are short enough)
2. Use capture-only models with manual payment links later (adding friction)
3. Use vaulted cards to charge later without authorization period limits

How Charge Later Solves This

Vaulted cards with deferred charges eliminate the authorization period problem entirely. There’s no time limit on when you can charge the saved payment method. Whether your lead time is 30 days, 90 days, or six months, you pay standard processing fees with no surcharges.

The cost structure is identical to a regular transaction: 2.9% + 30¢ for standard Shopify Payments, regardless of how long you wait to charge.

This flexibility is particularly valuable when timelines are uncertain. Manufacturing delays, shipping disruptions, or supply chain issues don’t force you to charge early or deal with expired authorizations.

Cost Comparison: Authorization vs Vaulted Cards

Let’s compare the real costs for a $100 pre-order with different lead times:

0-7 days (authorization within window):

• Authorization: $2.90 + $0.30 = $3.20 (2.9% + 30¢)
• Vaulted card: $2.90 + $0.30 = $3.20 (2.9% + 30¢)
• Winner: Tie

8-30 days (extended authorization):

• Authorization: $4.65 + $0.30 = $4.95 (4.65% + 30¢)
• Vaulted card: $2.90 + $0.30 = $3.20 (2.9% + 30¢)
• Winner: Vaulted card (saves $1.75 per transaction)

31+ days (authorization expired):

• Authorization: Not possible without manual payment links
• Vaulted card: $2.90 + $0.30 = $3.20 (2.9% + 30¢)
• Winner: Vaulted card (only option that works)

For a store processing 1,000 pre-orders at $100 each with 45-day lead times, vaulted cards save $1,750 compared to extended authorizations.

When Authorization Still Makes Sense

Authorization holds aren’t obsolete. They work fine for:

• Very short pre-orders (under 7 days)
• Restock campaigns where inventory is expected within days
• Test runs where you want to verify funds before committing to production

The key is matching the tool to the timeline. Authorization is simple and built-in for short windows. Vaulted cards are essential for anything longer.

Limitations & When NOT to Use Charge Later

Charge-later isn’t the right solution for every scenario. Understanding limitations helps you choose appropriately.

Platform Restrictions

Local payment methods aren’t compatible. Vaulted cards work with credit and debit cards through Shopify Payments or PayPal. Local payment methods (Sofort, iDEAL, Bancontact, etc.) can’t be vaulted for future charges. If you rely heavily on these payment methods, charge-upfront or capture-only models work better.

Draft orders don’t support deferred charges. If you create orders manually via draft orders (common for wholesale or custom quotes), you can’t use vaulted card deferred payments. You’d need to collect payment upfront or send a payment link later.

B2B checkout has limitations. Shopify’s B2B checkout and net payment terms don’t fully integrate with consumer-facing vaulted card workflows. Enterprise merchants with complex B2B needs may need custom solutions.

Legacy checkout.liquid isn’t compatible. If you’re on Shopify Plus with extensive checkout.liquid customizations, you’ll need to migrate to Checkout Extensibility before using vaulted cards.

Business Scenarios Where Charge-Upfront is Better

Very short lead times (under 7 days) make charge-later unnecessary. If you’re shipping within a week, just charge upfront. The refund risk is minimal and you avoid any potential failed charge issues.

Immediate cash flow needs sometimes override other considerations. If you need revenue today to pay for production, you must charge upfront regardless of slightly higher refund risk.

Proven products with extremely low refund rates might not benefit from charge-later. If you know from experience that cancellations are under 1%, the administrative overhead of deferred charging might not be worth it.

Established customer relationships with high trust can make upfront payment feel natural. Your repeat customers who know and love your brand may prefer to pay and forget about it rather than worry about a future charge.

Alternatives to Consider

Capture-only for maximum flexibility: With this model, you don’t charge cards at checkout at all. Orders are captured in your pre-order system with contact information only. When ready to fulfill, you send payment links via email. This gives ultimate flexibility but adds friction (customers must click the link and pay).

According to our data, 28.7% of pre-orders use capture-only payment links, making it the second most popular method after charge-later. It works particularly well when timelines are very uncertain or you want to offer customers maximum optionality.

Deposits for higher commitment: As discussed earlier, taking 20-50% upfront combines some immediate cash flow with deferred balance charging. This middle ground often makes sense for expensive items or long lead times where pure charge-later might see more cancellations.

Charge-upfront with generous refund policies: Some merchants simply charge immediately but make refunds effortless if customers change their minds. This works when you have good cash reserves and can afford to process refunds without disruption.

The right approach depends on your specific business model, product type, customer base, and operational capacity.

Customer Communication Best Practices

Clear communication throughout the pre-order journey reduces support tickets, builds trust, and improves charge success rates.

Setting Clear Expectations

Product page messaging is your first opportunity to set expectations. Don’t hide that this is a pre-order or when payment will be collected. Example:

“This item is available for pre-order and will ship in March 2026. Your payment method will be saved securely and charged one week before shipping. You can cancel anytime before we charge your card.”

Checkout flow transparency ensures customers understand what they’re agreeing to. Shopify’s purchase options agreement label appears at checkout for deferred charges. Make sure this clearly states when payment will be collected.

Confirmation email templates should repeat key information:

• Thank you for your pre-order
• Estimated ship date
• When payment will be collected
• How to update payment methods or cancel
• Link to customer portal for order status

Pre-charge notification is critical. 3-7 days before charging, send an email: “Your pre-order is almost ready to ship! We’ll charge your payment method on [date]. If you need to update your card, click here.”

This simple email dramatically reduces failed charges by catching expired cards before the charge attempt.

Building Trust Through Communication

Explain the “why” of charge-later. Customers sometimes worry that deferred payment means the business might not follow through. Frame it as customer-friendly: “We won’t charge you until your order is ready to ship because we respect your money and your trust.”

Update emails during production maintain excitement and connection. Monthly or milestone updates (“Your order is in production,” “Your order has shipped from the factory and is in transit to our warehouse”) keep customers engaged during long lead times.

Handling delay communication is the hardest but most important communication. If you need to push dates back, notify customers immediately with:

• Honest explanation of why (supply chain delay, quality issue, etc.)
• New estimated date
• Option to cancel with no charge if they prefer
• Apology and perhaps small compensation (discount on next order, upgraded shipping)

Because you haven’t charged them yet, customers are typically more understanding of delays. “I haven’t paid yet, so I don’t mind waiting another month” is a common response.

FAQ content for product pages preempts common questions:

• When will I be charged?
• Can I cancel before being charged?
• What if my card expires?
• How will I know when my order ships?
• What if I need to change my address?

Answering these upfront reduces support volume and increases customer confidence.

Customer Portal Features

A self-service customer portal is invaluable for charge-later pre-orders. Customers should be able to:

View order status and estimated ship dates. Real-time visibility into where their pre-order stands in the production process.

See upcoming charge dates and amounts. Transparency about when they’ll be charged and how much builds trust.

Update payment methods. Let customers change their card details before the charge attempt without contacting support.

Modify shipping addresses. Particularly important for long lead times where customers might move.

Cancel if needed. Self-service cancellation before charging reduces support burden and gives customers control.

Apps like PreProduct provide customer portals as a core feature, recognizing that self-service reduces support tickets by 40-60% for pre-order merchants.

Conclusion

Charge-later pre-orders with vaulted cards solve the fundamental problem of Shopify’s authorization period limitations. By letting you collect payment when ready to fulfill, regardless of timeline, charge-later reduces refund risk, improves customer conversion, and gives you operational flexibility.

The data speaks clearly: 43.8% of pre-order listings use charge-later, making it the most popular method by a significant margin. Merchants prefer it for lead times beyond 30 days, and customers appreciate not paying months before receiving their products.

Here are the key takeaways:

Use charge-later for pre-orders with 30+ day lead times. This is where it provides the most value by avoiding authorization period costs and expiration issues.

Set up clear communication workflows. Product page messaging, checkout transparency, and pre-charge notifications are essential for success.

Plan for failed payments with a dunning process. Automated retries and easy payment method updates recover 80-90% of initially failed charges.

Consider deposits for high-ticket items. Combining a partial upfront payment with charge-later balance collection can improve commitment while maintaining flexibility.

Test before launching. Walk through the complete customer experience, verify charge triggers work correctly, and confirm fulfillment holds are functioning.

Ready to start taking charge-later pre-orders on your Shopify store? PreProduct makes it simple to set up deferred charges, automate fulfillment holds, and manage customer communication. Start for free and only pay a percentage of pre-order revenue, or upgrade to Scale plans for advanced automation and Shopify Flow integration.

FAQ

Does Shopify natively support charge-later payments?

Shopify provides the underlying vaulted card technology and payment mandate system, but you need a pre-order app like PreProduct to configure and manage charge-later pre-orders. The native Shopify checkout doesn’t include pre-order functionality or deferred charge management on its own.

What payment processors work with charge-later?

Shopify Payments and PayPal currently support deferred charges and vaulted cards through Shopify’s native checkout. Stripe also supports vaulted cards for headless or custom implementations. Third-party gateways integrated through Shopify don’t support vaulted card deferred payments.

How much does charge-later cost compared to regular payments?

Charge-later costs exactly the same as a regular transaction: 2.9% + 30¢ for standard Shopify Payments rates (rates vary by country and plan). There are no additional fees regardless of how long you wait to charge.

Can I use charge-later for any product type?

Technically yes, but it’s most effective for pre-orders, made-to-order items, or backorder situations. Regular in-stock products don’t benefit from charge-later, you’d just charge immediately. Physical products work best; digital products don’t typically need deferred charging since there’s no production or shipping delay.

What happens if a deferred charge fails?

Your pre-order app should support retrying the charge. If it fails again, customers receive an email notification asking them to update their payment method. Most systems retry 2-3 times over 7-14 days before canceling the order. Good apps provide customer portals where buyers can easily update their card details.

How long can I wait before charging a vaulted card?

There’s no technical time limit on vaulted cards. You can charge 30 days, 90 days, 6 months, or even longer after checkout. However, longer windows increase the chance of card expiration or insufficient funds. Most successful pre-orders charge within 90 days of checkout.

Can customers cancel after checkout but before charging?

Yes, and this is one advantage of charge-later. Since you haven’t collected payment yet, cancellation is simple: you just cancel the order and release the inventory. No refund processing needed. Clear cancellation policies and easy self-service cancellation reduce support burden.

Is charge-later better than taking deposits?

It depends on your situation. Charge-later works well for medium to long lead times (1 – 6 months) and price points under $300. Deposits work better for high-ticket items ($300+), very long lead times (90+ days), or when you need some immediate cash flow. Some merchants combine both: take a deposit now, charge the balance later.