#ikushch_best-practices
forest kernelBOT
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stoic lantern
Hi there
A connected account is trying to make a refund of the amount that was paid out a week ago
proud moth
hi
stoic lantern
Do you have an exact request ID or an account ID I can look at?
stoic lantern
Sorry for the delay!
stoic lantern
Ah, hm, this is an odd configuration. This platform is making direct charges on Custom accounts, which is not a recommended flow. With direct charges, refunds come from the connected account's balance. Platforms are responsible for the negative balances of their Express/Custom accounts, so whenever there’s a negative balance we have to hold a reserve from the Platform’s available balance.
proud moth
so what will be our recommendation? How should we change it?
stoic lantern
For this refund, you won't be able to process this refund until the connected account's balance has enough funds or until your platform's balance is not negative
For direct charge flows, we reserve a portion of your account's available balance for cases like this but your current balance is not sufficient to cover this. More details are here: https://docs.stripe.com/connect/account-balances#understanding-connected-reserve-balances
proud moth
so the only way is to have reserved funds for that kind of situations?
stoic lantern
Correct
proud moth
so there is no way to set it this way so the connected account is charged from their bank account?
stoic lantern
No, the only way this refund will be allowed is with positive balances for both the platform and the connected account.
proud moth
for this one yes but how to set up so all other refunds will go from connect's account bank of stripe balance is $0?
stoic lantern
If you retrieve this custom account, is settings.payouts.debit_negative_balances currently false?
stoic lantern
Correct. You can also retrieve the account via the API
stoic lantern
I see. It looks like the piece that's failing is the application fee piece. refund_application_fee: "true" is attempting to refund the 0.90 amount from your platform to the connected account but the platform balance is negative.
forest kernelBOT
proud moth
So how should it be set?
barren vine
you need to have sufficient funds in your Platform account balance.
Is there a reason why you're not setting reverse_transfer=true when performing this refund? Yet are reversing the application_fee?
barren vine
ah, sorry, disregard what I said earlier. You are creating direct charges, so reverse_transfer isn't applicable in this case.
If you really want to perform the refund right now, you can try setting refund_application_fee=false, but will need to refund the application fee separately at a later point in time once your platform balance has sufficient funds
proud moth
Sure, but what are the proper settings so we wont have same issues in a future?
barren vine
the key problem here is really that you don't have sufficient funds in your platform account. There are no settings that you can toggle for this.
You could possibly perform a https://docs.stripe.com/connect/top-ups to add funds to your balance. You'll want to talk more to Stripe Support - https://support.stripe.com/contact for advice about that
proud moth
so no way to get charged for a fee from platform's bank account?
barren vine
you are attempting to reverse the application fee i.e. transfer funds taken as an application fee back to the connected account. No, there's no way that I'm aware of
proud moth
what about stripe's fee? it will be refunded as well right?
so the main issue right now is that I don't have .90c on my platform balance right?
barren vine
no, Stripe fees are not refunded.
so the main issue right now is that I don't have .90c on my platform balance right?
yes, that's correct
one option that you have is to perform the refund without reversing the application fee first. Reverse the application fee later when your platform has sufficient balance.