Definition
Service credits are pre-agreed refunds a vendor owes when it misses a service level agreement, usually as a percentage of fees.
Service credits are rarely a real remedy: a few percent of monthly fees won't cover the business impact of a serious outage, and they often require you to claim them. Treat them as a signal of the vendor's confidence, not as insurance.
Go deeperHow to negotiate a SaaS contract from a position of strengthRelated terms
Benchside turns service credits into the exact questions, exclusions, and lock-in math for your specific vendor - your first project is free.