How Fees for Refunds Work
When a transaction occurs (for example $100) the member is billed $100, and the space receives a portion of this minus processing fees—in this case $0.30 + 2.9%—so the space's portion is $96.80.
If that transaction is refunded, Stripe withdraws $96.80 from the space but returns the full $100 to the member. Stripe puts Proximity on the hook for this gap created by the processing fees. At this point the space balance on this transaction is $0.00 and Proximity's balance is negative $3.20. We charge this fee back to the space unless the transaction was the result of an error in our platform. So, in this example, the total cost to the space to refund the transaction is $3.20—in other words they simply pay the original processing fees for the transaction.
The example below assumes a CC payment with processing fees of $0.30 + 2.9%, that the customer had $1,000 in their bank account before the transaction, that the space and Proximity had $100.00 in their account before the transaction, and that no other transactions have taken place when calculating balances.
|Step||Customer Balance||Space Balance||Proximity Balance|
|Before a Transaction||$1,000||$100.00||$100.00|
|Transaction Processed for $100.00||$900||$196.80||$100.00|
|Proximity Recoups Processing Fee||$1,000||$96.80||$100.00|