Microsoft’s Skype shutdown sparks backlash as users lose prepaid funds

Microsoft’s Skype shutdown sparks backlash

Microsoft will shut down its once-pioneering Skype video and voice calling service on May 5, and longtime users are discovering that they won’t be refunded for leftover prepaid balances — a decision that’s sparking frustration and raising concerns about how tech companies handle discontinued services, the Washington Post reported.

Every Tuesday morning since 2009, Karen Griffin has used Skype to catch up with a close friend in Italy. The retired attorney has also relied on Skype to call her son abroad and coordinate international travel. So when Microsoft announced the shutdown, she felt a pang of nostalgia — and then anger.

Griffin, like many loyal users, had money sitting in her Skype account, prepaid for discounted international calls. “They’re no longer offering this service that I prepaid for, and now they’re not giving me my money back,” she said. “There’s a lot of people out there who are going to lose money.”

An abrupt end to a once-ubiquitous service

Launched in 2003, Skype helped popularize internet-based calling and video chat. Microsoft acquired it in 2011 for $8.5 billion, but the service has faded in popularity as apps like FaceTime, WhatsApp, and Zoom gained traction. Microsoft is now encouraging users to switch to Microsoft Teams, which has a free version for personal use.

However, users like Griffin say Teams lacks the simplicity of Skype. “We tried Teams and found it cumbersome,” she said. She and her friend have since migrated to Google Meet.

What happens to your Skype balance?

Skype allowed users to buy credits for calling landline and mobile numbers internationally. Microsoft now says it won’t refund unused credits unless they were bought very recently, even though the core service is ending. Instead, the company says users can apply balances to calling features in Teams, though details remain unclear.

“Refunds make more sense if you took away something,” said Amit Fulay, Microsoft’s vice president of product for Skype and Teams. “We’re not.” He emphasized that Microsoft still offers similar calling services through Teams.

But many users feel the transition isn’t a like-for-like replacement. Griffin suggested Microsoft could at least allow Skype credits to be applied toward other Microsoft services, like her $110 annual Office subscription. Fulay said that wasn’t technically feasible.

Consumer advocates say Microsoft can do better

Consumer Reports’ Stacey Higginbotham said Microsoft’s stance is disappointing. “The best way: give people their money back. The second-best way: give people a credit to all of your services,” she said.

She pointed to companies that handled product shutdowns more responsibly. When Amazon discontinued its Halo fitness tracker, it offered refunds for both hardware and unused subscriptions. In contrast, Spotify and Humane left customers with largely useless devices when they recently shuttered products, offering minimal compensation.

Microsoft hasn’t said how much money remains in inactive Skype accounts, but critics say the company could easily afford to offer refunds or credits, especially given the loyalty of longtime users.

Alternatives to Skype for calls and chats

As Skype fades out, users looking for replacements have a variety of options:

• WhatsApp and Signal: Both support free video and voice calls, along with group chats. WhatsApp is more common; Signal is privacy-focused.
• Google Meet, Zoom, FaceTime, Microsoft Teams: Widely used for video calls but come with device limitations or time restrictions unless you have a paid plan.
• Google Voice: Offers cheap international calling (from $0.01/minute) via a virtual number, though users must preload at least $10.
• Traditional phone carriers: Still an option but typically more expensive for international calls without a specific plan.

Griffin’s weekly catch-ups with her friend continue — just not on Skype. She hopes other companies learn from Microsoft’s handling of the shutdown. “They could earn a lot of goodwill if they were just a little more generous,” she said.