Slate Payments - Refunds

Introduction

This article only discusses refunding of payments made through Slate Payments.

If you are using an external payment processor, refunds need to be initiated in that external processor's system. Notifications for those external refunds are not sent to Slate, so payment refund activities must be added manually.

Initiating and processing refunds right from inside Slate is one of the many conveniences and efficiencies of using Slate Payments. While refunds are usually handled seamlessly, the refunding process does have some intricacies and can sometimes lead to further inquiries from your customers. Many questions can be handled in a self-service fashion. Please review the following more detailed sections carefully before reaching out to us.

Please review Slate Payments - Account balances for a more detailed discussion on terminology and options.

Initiating a Refund

Simply adding a 'payment refund' activity to a record does not initiate a refund.

In order to refund a payment, you must have the "Payment Refund" permission. To refund a payment made through Slate Payments:

1. Open the Payment Received activity or interaction on the person record. You will see a "Refund" link, which you can click to initiate a refund.

Once a refund is initiated it cannot be cancelled.

When a payment is refunded through Slate Payments, the transaction fee will also be refunded (by the payment processor). The payer will receive the total amount they paid, but your Slate Payments deposit account will only be debited for the net amount you originally received. In other words, when using 'Slate Payments,' you do not lose any money by accepting and then refunding a payment.

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2. When you click the 'refund' link, you will see the actual 'Refund Payment' pop-up window, where you will confirm your decision. You can refund any amount up to the original charge amount (never more than that).

Slate will display the currently available balance of the relevant Slate Payments deposit account. When initiating refunds, you will generally want that balance to be positive.

A red warning label will be displayed when this balance is negative. You may still be able to initiate the refund, but certain limitations may apply depending on your account setup and the volume and size of the refund activities.

In general, we recommend adjusting the payout settings for your Slate Payments deposit account such that withdrawals can be made directly from your external bank account (at the scheduled payout interval) to cover a negative balance (the two-way payout setting).

If you are planning to issue multiple refunds on a given day and the sum of all refunds will leave your account with a negative balance (and assuming that you are still receiving incoming new funds), consider breaking the refunds apart and initiating them over several days.

Frequently Asked Questions

Where do the monies for my refund come from?

Your Slate Payments Deposit Account includes a holding account with Stripe (a connected account) where your funds are 'held' until they are scheduled to be transferred to you. Funds are collected, held, and paid out in separate sub-balances depending on the source of the payment (credit card charge vs. ACH payment). If there are funds (of the relevant funds source) currently in that account when you make a refund, those funds are used.

If there are not sufficient funds in the account, the refund will be initiated anyway, and the balance in that account (or sub-balance) will become negative. Whenever an account balance (or sub-balance) is negative (at the cutoff time), regularly scheduled payouts (for that funds type) are suspended.

If you are planning to issue a large number of refunds (or a substantial individual transaction), you may encounter limits or NSF scenarios that impact the timing of your refunds. The transactions will show as "Refund Pending" in the payment history.
What does the status 'Refund Pending' mean?

'Refund Pending' means that the refund process was initiated with Stripe. Still, no funds have been released, and the counter-party financial institution has not been notified about a refund. No ARN would exist in this case, regardless of timing.

If there are insufficient funds in your deposit account, a refund will generally be attempted and initiated anyway, and the balance (or sub-balance) in that deposit account will become negative. In many cases, especially if you have the (recommended) two-way payout setting enabled on your deposit account (and are not on a daily transfer schedule), the refund will ultimately be processed normally.

If you are issuing a large number of refunds (or a substantial individual transaction), you may encounter limits or NSF scenarios that impact the timing of your refunds. The sum of all initiated refunds (on a given day) might lead to such a large negative balance in your deposit account that it will trigger a 'fraud detection' threshold (on that specific deposit account - this is not per database/institution. Each deposit account should be considered a separate and distinct record). In this case, all refunds are halted. The transactions affected by any of these scenarios will show as "Refund Pending" in the payment history.

What is the timing for receiving a refund? Can you trace a refund?

Once you initiate a refund, the payment processor contacts your customer’s bank or card issuer to complete the refund requests. Your payer or applicant sees the refund as a credit approximately 5-10 business days later, depending upon the bank.

(This timing is assuming that your deposit account had a positive balance at the time of refund initiation. More complicated scenarios may come into play when attempting to issue unusually large numbers of refunds or a substantial single refund. If you see a 'Pending Refund' in the payment history, the process was initiated, but no funds have been released. 

An applicant or payer may contact you if they don’t see the refund. First, remember all the timing guidelines from above. Make sure you are counting business days and account for bank holidays.

A refund may not be visible to the customer for several reasons:

  • Refunds issued shortly after the original charge generally appear as a reversal instead of a refund. In the case of a reversal, the original charge drops off the customer’s billing statement, and a separate credit is not issued.
  • Refunds can fail if the customer’s bank or card issuer has been unable to process them correctly. The bank returns the refunded amount to Slate Payments, and we add it back to your connected account balance. This process can take up to 30 days from requesting the refund.

If a payer is asking about a refund (again, keeping the general timing guidelines in mind), it can be helpful to give them the Acquirer Reference Number (ARN) corresponding to the refund. An ARN is a unique number assigned to a card transaction as it moves through the payment flow. Your applicant or payer can then take the ARN to their bank, which will provide more information about when the refund will be available. A reference number can also increase your customer’s confidence that the refund has been initiated.

ARNs are available under the following conditions:

  1. They are only supported for Visa and Mastercard card transactions.
  2. It takes 1-3 business days after initiating the refund for the processor to receive the ARN from downstream banking partners.
  3. An ARN is not available in the case of a reversal since the original charge is not processed.

Assuming that 5-10 business days have passed since you initiated the refund, you can reach out to us via a Service Request. We will attempt to locate the ARN corresponding to the refund (if available).

Are there 'time-based limitations' on initiating refunds?
  • There is no set time limit for credit card refunds.
  • Refunds for checking account payments (ACH) must be made within 90 days of the original payment. The ACH network sets this limit. It is not possible for us to adjust this or grant exceptions.
A Refund was initiated to a closed payer account. What now?

A payer may have closed the card or bank account the original payment was made. It is important to note that in many cases, it may take up to 30 days before the result of a 'failure to refund' scenario is surfaced back to a processor from the downstream banking partner.

If there is still an open card account for that customer with that bank (or some other business relationship), the funds will usually get routed automatically to the new card. If that is not possible, the bank will often attempt to issue a check directly to their former card customer.

For Visa and Mastercard card payments, an ARN reference number (usually available 2-3 business days after the refund is issued) can be used to locate funds. We can retrieve an ARN for you to share with your customer, which they can then share with their bank to locate the funds. 

You cannot send or direct a refund to a different bank account or card account.

If a payer is merely concerned that the expiration date on the credit card that was originally used has now passed (i.e., the original physical card is expired), you can generally reassure them that the payment processor will be aware of and able to locate the current version of the card. No further action is usually required.

Are there 'other' limitations for refunds?

You can't send or direct a refund to a different bank account or card account (or payment method).

Only funds that were taken via the original charge can be sent back to a card (via refund), i.e. refunding more money than was initially charged is not possible due to restrictions placed by the card issuing companies (this is not something that Technolutions or Stripe can adjust or circumvent).

Refunds must be equal to or less than the amount of the original charge amount. As such, partial refunds are possible. Enter the partial refund in the Refund Amount box in the Refund Payment Pop-up window as displayed above.

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