Ask HN: Can someone explain why OpenAI credits expire?

[jemiluv8]

I was surprised to find out only recently that some credits I bought about a year a go were unusable because they had expired. I find this a bit concerning because it seems as though I'm being forced to use the credits.

In my part of the world, that tactic is used by telcos to sell "broadband data". You buy internet bundle of about $1 and they give you expiry of about a week. This drives up the "real" price of these purchases because of the time constraint. Ultimately, if you had 1GB of data left after a week, it is all gone and you have to purchase again - further driving sales. Since this is a third world country we're talking about and telco's tend to be oligopolies and tend to also do some form of price collusion among themselves, it was generally accepted as "just how things were".

But I always found it to be unfair because people should be allowed to take their time consuming whatever product they purchased.

I wonder if this is general practice for all llm apis? Am I missing something? Is this really how things should be? I can't seem to fathom why "purchased" llm credits should have an expiry date - however generous. Especially when the same credits can be used to access any of their available models.

[nivertech]

For credits to not be considered a money substitute, they must be non-transferable, non-refundable, and have an expiration date. Without an expiration date, unused credits cannot be accounted for as revenue, but as a liquid asset similar to cash.

Best practice is to set a long expiration date, such as 1-2 years. There are different regulations about it in different states. After that unused credits can be accounted as breakage revenue.

If a company treats credits as money, it will have to comply with numerous financial regulations. For example, if a company compensates for SLA breaches with cash rather than credits, this could be considered insurance.

[klez]

> This drives up the "real" price of these purchases because of the time constraint.

I'd say you answered your own question.

> telco's tend to be oligopolies and tend to also do some form of price collusion among themselves, it was generally accepted as "just how things were"

So are LLM companies, at this stage

> Am I missing something?

Not really

> Is this really how things should be?

No, this is how thing are. I'm more than interested in ways to change the status quo, though.

[_wire_]

- Skirts credit speculation and arbitrage

- Prevents hoarding

- Allows freedom for sales promotions while controlling service commitments

- Marginally increases revenue per unit of service

- Provides stable pricing in shorter term while accommodating price changes over longer term

- Excites engagement

[jamessb]

> - Skirts credit speculation and arbitrage

> - Provides stable pricing in shorter term while accommodating price changes over longer term

How? If you pre-pay $5, your account is credited by $5, and when you make an API request you get charged at whatever the rate is for the model you called at the time you used it. You aren't buying some virtual currency or locking in a specific price.

> - Excites engagement

More accurately, irritates customers by keeping their money without providing any service in return.

[gus_massa]

For accounting it's better to give things an expiring date. Perhaps 5 year would have been better than 1 to keep people happy, but I don't know why they decided 1 year (or whatever is the exact number).

[jemiluv8]

I suppose I can understand for accounting purposes to some extent. Once a purchase is done, they receive their cash immediately but perhaps actual revenue is deferred until actual usage since that will end up leading to the "actual" rendering of service by openai. Makes accounting sense.

Even though it gives me the vibes of something the fictional " Sirius Cybernetics Corporation", would do.

[ManlyBread]

This is a complete nonsense given I have video games with virtual currencies in them that I've purchased for real money and the currency is still sitting there well over a decade later.

[shoo]

yes. see also this thread from 4 months ago discussing accounting for credits, in the context of 1 year expiry for anthropic credits

https://news.ycombinator.com/item?id=44793827

[jaredsohn]

My guess is this is so OpenAI can treat it as annual recurring revenue which helps with their stock valuation. I've seen non-LLM API vendors do this with their credits as well.

[7bit]

Because someone at openAI decided it so and the CEO approved it.

[Bender]

Can someone explain why OpenAI credits expire?

Just guessing but probably to bring it up to par with a coin operated car wash to get more monies.

- Insert Duckets [1]

- Start Washing Car

- Insert More Duckets to Rinse Car.

[1] - slang, Items of a lootable nature, usually looted off fools.

That, or they don't want criminals building up a cache of credits from stolen credit cards, stolen accounts and reselling the credits / accounts but I prefer to think it's to be a car wash.