What Happens After You Issue a Refund

What Happens After You Issue a Refund

When you issue a refund to a parent, the parent is paid back right away, before any money is collected from you. We then recover your portion of that refund from your account over the following days. This is automatic, and in almost every case there is nothing for you to do. This article explains the behind-the-scenes sequence so that if you ever see a refund-related charge on your bank account or card, you know exactly what it is. To issue a refund in the first place, see Processing Refunds and Cancellations.

The short version

The parent gets their money back first. We front the refund so it reaches the family quickly, no matter what your balance happens to be that day. Then we collect your portion from your account in the background. The amount we collect from you matches the amount the parent received. We do not claw back the payment processing fees in this flow.

Step by step

  1. The parent is refunded right away. The refund goes back to the parent's original payment method. This happens regardless of your current balance, so the family is never left waiting on you.
  2. We collect your portion from your account a day or so later. This is the same account your payouts go into. When it settles, it appears in your Payout Report as a refund line under the originating payout.
  3. If your account is quiet, we retry daily for about 7 days. This is common in the off-season, when there is no recent activity to draw from. As soon as funds are available, the collection succeeds on its own. Nothing for you to do.
  4. If it still cannot collect, we charge it to your card on file through an automatic invoice. This is the charge you may notice on your card. It is your portion of a refund the parent already received, not a new fee.
  5. The rare case we need you: only if that card charge fails, or there is no card on file. You will receive one email titled "Action needed: refund clawback invoice" with a link to pay the invoice. Adding or updating a card in your billing settings lets the next automatic attempt collect it for you, with no further action.

What a charge on your account means

If you notice a refund-related deduction or charge, here is how to read it:

What you seeWhat it is
A refund line in your Payout Report, under a payoutYour portion of a refund, collected from your account the normal way. The standard outcome.
A charge on your card on fileYour portion of a refund we could not collect from your account balance, so it was billed to your card instead. Same money, different route.
An email: "Action needed: refund clawback invoice"The card charge did not go through, or there is no card on file. Pay the linked invoice, or add a card so the next attempt collects it automatically.

FAQ

Why was the parent refunded before you collected from me?
So the family is never left waiting on your balance. We front the refund and recover your portion afterward. This is the same in every case.

Is the card charge a new fee?
No. It is your portion of a refund the parent already received. It only goes to your card when we could not collect it from your account balance over about 7 days.

Do you also take back the processing fees when I refund someone?
Not in this flow. We collect only your portion, which matches what the parent received. Refunding the fees too is a separate, opt-in choice you make at the time of the refund. See Understanding Your Fees as a Provider.

I issued a refund in the off-season and nothing came out of my account. Did it work?
Yes. The parent was refunded. Collecting your portion waits until there are funds to draw from, retrying daily for about 7 days. If it still cannot collect by then, it moves to your card on file.

What do I do if I get the "Action needed" email?
Either pay the invoice from the link in the email, or add or update a card in your billing settings. If you add a card, the next automatic attempt collects the amount for you and the invoice closes on its own.

Will the parent's refund be reversed if you cannot collect from me?
No. The parent keeps their refund. Collecting your portion is handled separately and never affects what the family received.

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