#taylorcooney
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- taylorcooney, 6 days ago, 6 messages
grim prairie
hello! if you reach out to Stripe Support - https://support.stripe.com/contact, they'll be able to advise you on your question! We mainly help with developers who want to integrate directly with the Stripe API here on this channel
outer swan
Hi @grim prairie, this question is about integrating directly with the Stripe API - specifically, how we can set the status of a refund to pending at creation time if the connected account's balance is insufficient [0].
[0] https://stripe.com/docs/connect/direct-charges#issuing-refunds
grim prairie
It's not possible via the API to force the refund object to a status of pending if the connected account’s balance is sufficiently negative at creation time instead of taking the funds from our platform. You're probably using destination charges and your connected accounts are either Express/Custom. The platform is liable for negative balances on Express and Custom accounts.
The flow of destination charges is such that the payment is done on the platform first and the money for the payment lends in your platform balance first. So for a refund, to reverse the flow, the fund is always taken from the platform balance as well. We allow you to reverse the transfer from the connected account to recoup the funds, but in essence, the money for the refund is still from the platform.
Since the platform is liable for negative balances on Express and Custom accounts, a reserve is placed on the platform if the Express/Custom account goes into a negative balance
outer swan
Understood. That is simliar to what is described here in the best practices for going live with Connect [0] documentation
[0] https://stripe.com/docs/connect/best-practices#impact-from-chargebacks-and-negative-balances
So relating to or along a tangent here with the above documentation, could you help me better understand this section here, "You can check the connected account’s balance to see if you can cover the refund with retrieve in the API. If their balance can’t cover the refund, you can reverse the transfer without issuing the refund (which results in a negative balance on the account)."
grim prairie
hrm, that paragraph could be improved. I have no idea what it means as well.
i'll pass on the feedback
outer swan
No worries. I'll contact Support. I guess my ultimate goal is to mimic this behaviour, "If you're using Shopify Payments and you issue a refund, then the amount is deducted from your next available payout." [0]
I was wondering if that would be acheived through the Stripe API, or if Shopify is recording a local refund in a pending state, and using a cron job to periodically check the connectec account's balance before making the call to Stripe to create the refund.
grim prairie
I'm not sure I fully understand the concern here. Issuing refunds to customers in a timely manner is important since if you don't do so, it could turn into a dispute and you the platform, will be liable for the amount for the dispute as well. Right now, when you issue a refund, the funds are taken from your platform account, and the transfer is reversed to recoup the funds from the connected account. If the connected account currently has insufficient funds, they go into a negative balance and a reserve amount is placed on the platform. Once the connected account recoups funds, the reserve amount is released from your platform.
outer swan
Well the concern is that we cannot keep having our platform have funds withdrawn from it; we can't keep a dynamic float in our bank account to cover refunds on behalf of our customers. So we are trying to explore different options, such as issuing refunds based on certain parameters. For example, you can wait until the account’s balance is no longer negative to issue refunds or immediately issue the refund knowing that future payments can cover the amount.
This is suggested in the documentation for best practises for going live with Connect [0]
[0] https://stripe.com/docs/connect/best-practices#impact-from-chargebacks-and-negative-balances
grim prairie
I'm probably missing something here, but you should have sufficient funds in your Stripe balance to perform the refund. Or are you saying that you consistently don't have sufficient balance in your Stripe account and Stripe is debiting your bank account to cover for the refunds?
outer swan
Correct -- its the latter