Move to a lower plan; the instance moves to a smaller machine, keeping its data and its address

The machine cannot shrink, so the instance is moved onto a smaller one: its data is copied across and its address goes with it, so every connection string and every DNS record of yours keeps working. Expect the instance to be down for the length of the copy. The daily backups belong to the machine being left and do not come along; a snapshot of it is kept, and the new machine's own daily backups start the next day. The unused part of the bigger plan comes back as credit on the next invoice, which is the payment provider's proration and not a refund, and the smaller price applies from then on.