waqas_

[thorn flicker]

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• waqas-checkout-feecalculation, 1 hour ago, 18 messages

[zealous acorn]

hello! I assume you're talking about destination charges. To be clear, the refund always takes the balance from the platform. The reverse_transfer (as its name implies) reverses the transfer made to the connected account.

[lilac abyss]

So if reverse_transfer is false, the platform would pay the full refund from its balance, but if it set to true, it will take that balance from the connected account?

Yes referring to destination charges

With destination charges, the funds are transferred to the connected account right

So if we want to refund a payment made with destination charge, and we would want that to be taken from the connected account, we should set reverse_transfer to true?

[zealous acorn]

it will reverse the transfer made to the connected account. The amount that is reversed may not cover the full amount of the refund

i.e. it will only reverse the amount that was transferred

for example if the customer made payment for $10, and you only transferred $5 to your connected account. You'll only get back $5 when you reverse_transfer=true

[lilac abyss]

Ah okay

For example in this case

const paymentIntent = await stripe.paymentIntents.create({
  amount: 1000,
  currency: 'usd',
  automatic_payment_methods: {
    enabled: true,
  },
  transfer_data: {
    destination: '{{CONNECTED_ACCOUNT_ID}}',
  },
});

The destination connect account receives $10

Now if I create a refund for that full payment intent amount, with reverse_transfer as true, the entire amount will be refunded from the connected account's balance right?

[zealous acorn]

i don't think the destination account receives $10 for that snippet you shared

[lilac abyss]

oh?

[zealous acorn]

have you tried running it to see if the connected account receives $10?

[lilac abyss]

No ^_^ I just took this from the docs as an example

From here: https://stripe.com/docs/connect/destination-charges

[zealous acorn]

hrm, okay, it works, my bad!

you should try running it and see how it works

[lilac abyss]

I do have a running version with checkout sessions

and the full payment does transfer to the connect account

But I was confused about the refunds

[zealous acorn]

yep, then have you tried running the refunds?

[lilac abyss]

Yes

I don't want the platform to cover the refunds, and want the entire refund to come from the connect account

But its a bit hard to see where the refund amount is taken from, from the dashboard

Or that info isn't shown anywhere

[zealous acorn]

for context, you as the platform, will be charged Stripe fees. If you transfer the full amount to the connected account, how will you account for Stripe fees?

[lilac abyss]

A refund with reverse_transfer it takes the full amount back from the connect account

But I was wondering if that is set to false, will the refund be taken from the platform's balance?

My usecase is this:

People pay to other businesses (connect accounts) and so they may request a refund from the business

So when creating the refund, I want it to be taken from the business balance and not the platform

We just charge a transaction fee in the process

[lilac abyss]

We use the application_fee_amount parameter in the API for this

so it transfer the full amount minus the application_fee

Follow up question: What if the connect account has $0 balance, and the payment has been payed out already, if someone requests a refund from the business (connect account) and I create it with reverse_transfer will that work?

[zealous acorn]

what's your connected account type : Express / Custom / Standard?

[lilac abyss]

Express

[zealous acorn]

We use the application_fee_amount parameter in the API for this

Then when you do the refund with reverse_transfer, you'll get the amount minus the application_fee

Follow up question: What if the connect account has $0 balance, and the payment has been payed out already, if someone requests a refund from the business (connect account) and I create it with reverse_transfer will that work?

Yes, it'll work. You'll want to read these guides about it though :
https://support.stripe.com/questions/reserves-for-connect-platforms-and-connected-accounts
https://support.stripe.com/questions/connect-reserves-faq
https://stripe.com/docs/connect/account-balances

[lilac abyss]

Thanks!