Refund on Stripe Connect Platform with Disconnected Standard Account

[Alex G.]

I have a Stripe Connect platform with hundreds of connected Standard accounts. I create charges with a destination account as well as a platform fee, which means I (the platform) am responsible for refunds, chargebacks, etc. Normally, when I need to refund a charge, I simply refund the charge and reverse the associated transfer. 

From time to time, a provider (i.e. Standard account) will disconnect from the platform for various reasons. What happens when I need to offer a refund and the Standard account that received the transfer is no longer connected to my platform? 

Thanks!

[Remi J.]

Hey Alex!

Since you created the Charge before the platform was disconnected you can still refund it and reverse the transfer. You won't be able to access the data on their account anymore though.

We highly discourage using `destination` charges with Standard accounts. Instead, you really should rely on Direct charges instead to avoid any issues down the road. I'd recommend discussing your business model and integration with our support team directly to ensure you're taking the correct approach.

Best,

Remi

--
You received this message because you are subscribed to the Google Groups "Stripe API Discussion" group.
To unsubscribe from this group and stop receiving emails from it, send an email to api-discuss+unsubscribe@lists.stripe.com.
To post to this group, send email to api-d...@lists.stripe.com.
Visit this group at https://groups.google.com/a/lists.stripe.com/group/api-discuss/.

[Alex G.]

Thanks Remi! 

1. Why is this model now discouraged? Back when we launched in late 2015 (I know, a lifetime ago), this was the suggested model. We (the platform) want to be able to control refunds and such. 
   
   
2. We're looking to move to the model of separating charges and transfers, as described here. So the platform would create and collect the charges, and then as appropriate, send transfers to our connected Standard accounts. But it also says that "It is only possible to reverse a transfer if the connected account’s available balance is greater than the reversal amount or has connected reserves enabled." Does that mean that if we needed to refund a charge and reverse the appropriate transfers, we'd only be able to do so if 1) the connected standard account is still connected, and 2) the balance in the connected standard account is enough to cover the reversed transfer? That seems like it would be a deal breaker for almost any marketplace. 

Thanks!

Alex

On Tuesday, February 20, 2018 at 6:41:02 AM UTC-8, Remi J. wrote:

Hey Alex!

Since you created the Charge before the platform was disconnected you can still refund it and reverse the transfer. You won't be able to access the data on their account anymore though.

We highly discourage using `destination` charges with Standard accounts. Instead, you really should rely on Direct charges instead to avoid any issues down the road. I'd recommend discussing your business model and integration with our support team directly to ensure you're taking the correct approach.

Best,

Remi

On Tue, Feb 20, 2018 at 2:27 AM, Alex G. <guirg...@gmail.com> wrote:

I have a Stripe Connect platform with hundreds of connected Standard accounts. I create charges with a destination account as well as a platform fee, which means I (the platform) am responsible for refunds, chargebacks, etc. Normally, when I need to refund a charge, I simply refund the charge and reverse the associated transfer. 

From time to time, a provider (i.e. Standard account) will disconnect from the platform for various reasons. What happens when I need to offer a refund and the Standard account that received the transfer is no longer connected to my platform? 

Thanks!

--
You received this message because you are subscribed to the Google Groups "Stripe API Discussion" group.

To unsubscribe from this group and stop receiving emails from it, send an email to api-discuss...@lists.stripe.com.

[Remi J.]

Hey Alex,

1. Why is this model now discouraged? Back when we launched in late 2015 (I know, a lifetime ago), this was the suggested model. We (the platform) want to be able to control refunds and such. 

We've always discouraged using Destination charges when you are a platform with Standard accounts (previously called Standalone). Destination charges were built for Custom accounts (previously called Managed). We've always recommended using Direct charges instead in your situation.

Doing so still lets you control refunds or help with disputes via the API. It also lets the owner of the account have more visibility into their customers and charges. With destination charges, all they see is the corresponding payment (py_XXXX) with little to no information about the original charge, the customer, where the refunds come from etc.

I'd recommend discussing this directly with our support team though: https://support.stripe.com/email

1. We're looking to move to the model of separating charges and transfers, as described here. So the platform would create and collect the charges, and then as appropriate, send transfers to our connected Standard accounts. But it also says that "It is only possible to reverse a transfer if the connected account’s available balance is greater than the reversal amount or has connected reserves enabled." Does that mean that if we needed to refund a charge and reverse the appropriate transfers, we'd only be able to do so if 1) the connected standard account is still connected, and 2) the balance in the connected standard account is enough to cover the reversed transfer? That seems like it would be a deal breaker for almost any marketplace. 

That is correct and is another reason why this is not a good fit for platforms using Standard accounts. This is a better fit for platforms using Custom or Express accounts where you have a lot more control over the accounts, the onboarding experience and the payout schedule.

If you contact our support team and take the time to describe your business model and what you're looking to achieve, they can help guide you in the best approach.

Thanks!

Alex

On Tuesday, February 20, 2018 at 6:41:02 AM UTC-8, Remi J. wrote:

Hey Alex!

Since you created the Charge before the platform was disconnected you can still refund it and reverse the transfer. You won't be able to access the data on their account anymore though.

We highly discourage using `destination` charges with Standard accounts. Instead, you really should rely on Direct charges instead to avoid any issues down the road. I'd recommend discussing your business model and integration with our support team directly to ensure you're taking the correct approach.

Best,

Remi

On Tue, Feb 20, 2018 at 2:27 AM, Alex G. <guirg...@gmail.com> wrote:

I have a Stripe Connect platform with hundreds of connected Standard accounts. I create charges with a destination account as well as a platform fee, which means I (the platform) am responsible for refunds, chargebacks, etc. Normally, when I need to refund a charge, I simply refund the charge and reverse the associated transfer. 

From time to time, a provider (i.e. Standard account) will disconnect from the platform for various reasons. What happens when I need to offer a refund and the Standard account that received the transfer is no longer connected to my platform? 

Thanks!

--
You received this message because you are subscribed to the Google Groups "Stripe API Discussion" group.
To unsubscribe from this group and stop receiving emails from it, send an email to api-discuss...@lists.stripe.com.
To post to this group, send email to api-d...@lists.stripe.com.
Visit this group at https://groups.google.com/a/lists.stripe.com/group/api-discuss/.

--
You received this message because you are subscribed to the Google Groups "Stripe API Discussion" group.

To unsubscribe from this group and stop receiving emails from it, send an email to api-discuss+unsubscribe@lists.stripe.com.

[Andrew Cooney]

Hi Remi, Alex G

Apologies for jumping in here but I have a similar model in place (I create charges on my platform then transfer the balance to the 3rd party after taking a fee).

I went down that route because my platform's shopping cart may contain multiple vendors' products at the same time.

Refunds are an issue - I keep a float held back to fund these and if that's empty I have the vendor top it up.  This is an overhead and cumbersome.


It was my understanding that I couldn't use direct charges with this business model.  But maybe I'm wrong?  I want to charge the customer's card once only of course.

I'd appreciate your thoughts, Remi

Many thanks,

Andrew

[Remi J.]

Hey Andrew,

Direct charges are usually the right solution in this case but it means you have to create one charge per vendor in that case. If you want to create one big charge for all items then the only solution is to create the charge on the platform and then transfer the right amount to each vendor.

For any follow up questions, I'd recommend reaching out to our support here: https://support.stripe.com/email

Best,

Remi

--

[Blair Gemmer]

We use a single charge but you don't associate a product, you simple charge and give a description of the charge. As long as the customer has a card, it will succeed.

--