Stripe Split pay – Direct Charges

[pdishman]

Hello,
I just need to be sure of how stripe split pay works. I would like my vendors to be responsible for all merchant fees/transaction fees and refunds, so I want all the funds to go in their accounts. My vendors pay a flat monthly fee, so there is no reason for me to take a commission if the vendor is paying all the fees.

So if I use “Direct Charges” option and set the commission to 100% to vendor, will that work? Just need to know that Admin doesn’t get charged any merchant fees and vendor gets all the funds, shipping, taxes, etc. and handles refunds.

Yes?

Thanks for your help!

[sdel_nevo]

Hi pdishman

that’s how I’m doing it, but I’m guessing that we would still be responsible for chargebacks.

when I have been testing this, when the commission is set to 100% stripe showed me that I (as the admin) got know commission, I could see from my other test stripe account that they only paid the stripe fee, now application fee was applied

hope this helps

steve

[sdel_nevo]

Hi again

just to confirm this is from stripes documantation

https://stripe.com/docs/connect/charges

Direct charges
We recommend that you create direct charges on the connected account when using Standard accounts, although this approach is also appropriate for some Express and Custom accounts.

Using this approach:

The connected account is responsible for the cost of the Stripe fees, refunds, and chargebacks
The payment itself appears as a charge in the connected account, not in your platform account
Charges directly increase the connected account’s balance
Your platform’s balance is only increased via application fees

so to confirm, what you are asking will work 🙂
and looking at this, the connected accounts (the vendor account) are responsible for the chargebacks

the application fee in the documentation is the commission you charge as the site admin

Steve

[pdishman]

Thanks Steve, the info you provided is very helpful! 🙂

[sdel_nevo]

You’re most welcome

Steve

[Unai]

Hey,

Just stumbled upon this and wanted to say this is rather helpful man. I have been driving myself crazy trying to devise a way to deal with chargebacks appropriately, and this solves it.

Because (as I understand it) when using split pay, I could make the vendors stripe account the “main” one let’s say, right? I’m not using a flat fee but a commission type system, but that doesn’t really matter for what I’m asking I think.

On another note, do you guys have any idea of how to deal with refunds when a split payment method is enabled? I mean like within the WCFM Dashboard/back-end.

Because as far as I know, vendors have no way to deal with refunds themselves. The Admin has to do this, even if the vendor has the actual money that is requested to be refunded, which makes no sense. Have you guys found a way around this? Am I missing something?

Thanks!

[sdel_nevo]

Hi

I have to admit that the refund process does seem to be off as the vendor can administer refunds, but I guys it would be the site admins job as the money travels first through there account before being passed to the customers.

The way I do it is to request a refund through stripe, log into your stripe dashboard find the payment and refund it.

The money is pulled back out of the vendors linked account

Steve

[Unai]

Hey Steve,

Oh really? So even though you connect the vendors account as the “main one”, your Stripe account (which basically acts as an intermediary) is able to force a refund?

So just to clarify, things would work like this (more or less):

1- You receive a refund request from a customer. The vendor gets a notification as well.
2- You tell the vendor to talk to the customer and find out what’s wrong etc (you could advise about doing this in your terms and conditions or something, I dunno). Because feedback and engaging with customers is always good and whatnot. Or maybe you don’t bother with this, doesn’t really matter.
3- You tell the vendor that if after talking to the customer the customer does indeed still want to request a refund, to let you know so you can refund it.
4- You go to your Stripe account. find the transaction and force a refund. The money gets automatically pulled from the vendors account, and goes directly to the customer’s.

Is that right? Or did I get something wrong?

Anyways, I still think that vendors should have a tab similar to our refund page, so they can deal with refunds on their own. It could be enabled or disabled from our settings dashboard for example, but the option should be there.

Thanks!

[sdel_nevo]

Hi

yes that’s how I have been testing it, to be honest
it’s not great, and perhaps I’m doing it wrong

currently, my site is not live but in testing, and this is the workflow I follow

I agree about the vendor’s tab though, it would cut out a lot of hassle

now to be totally honest, I have both vendors and main admin stripe account and i can switch between the two when logged into the stripe, so it’s working for me but I can’t guarantee it would work in a live environment to be totally honest, so I would have to get intouch with the vendor and request they refund

and yes I would point them to point 2

steve

[Unai]

I was thinking that if you disable refund requests from the customer side and suggest (somewhere) that customers wishing to request a refund should talk directly to the vendor, then maybe you would be left out of the equation until vendors request the refund themselves. This would save you from some of the hassle.

So, it would go like this:

1- On a page (or wherever) you say that customers should contact vendors directly through the inquiry button about problems with products, refund requests etc. No direct request refund button for them.
2- The vendor then HAS to talk to the customer, ask what’s wrong and basically try to make things right.
3- If the customer still wants to go through with the request, then the vendor would request it from their dashboard.
4- You get the notification, and all you have to do is track the transaction on your Stripe account, write it down and wait until the vendor marks it as “complete”. I’m actually not sure if vendors can change the status of the refunds, but if not, then I will be asking for that feature to be implemented. *
5- When that happens, then you look for the transaction and “force” the refund.

You could also say somewhere that if vendors are refusing to refund an order for no good reason, or are not answering emails or whatever, then customers should contact you directly so you can deal with the rogue vendor.

* The reason I say that you should wait until the vendor marks it as complete is because there are laws (at least here in the UK) saying that (as a minimum) you should have a refund policy of 14 days after the product arrives to the customer. If a refund is requested, then you should arrange (not you, but the vendor since you are not selling anything) for the product to be returned to you (if you want to do so). And that you should be refunding the money the customer paid after a maximum of 14 days after you received the returned item.

So it’s very important that vendors have the ability to change the status of refunds, so you can know if the item has been returned, it’s on its way, or what.

[sdel_nevo]

Hi

on my t’s and C’s I have stated that customers need to get in touch with the vendor directly

the workflow you suggest looks good to me, like you im in the UK (sunny old Gloucestershire) and to be honest when you say

So it’s very important that vendors have the ability to change the status of refunds, so you can know if the item has been returned, it’s on its way, or what.

your bang on their mate 🙂

steve

[Mike_H]

Hi, I’m having similar questions and the devs are not replying, so apologies for jumping in here.

Does the direct setting work for multiple-vendor carts? I think it should, but I am seeing something weird. If I add a product from two different vendors, whichever vendor’s product added to the cart second seems to take the shipping and attribute it to the admin’s account even though everything is set to 100% Vendor, Vendor gets shipping, vendor gets tax. But on payment, Vendor 1 gets all their product and shipping, but vendor 2 only gets the product, not the shipping. It’s not the vendor settings as it is the same if you picked vendor 2’s item first, then vendor 1. Vendor 1 would then not receive the shipping!

Thanks for any help

[sdel_nevo]

Hi

yes direct charges work for multiple vendor carts,

When I tested I must admit I didn’t get the error with the shipping as you describe, I did however have other errors randomly being created in relation to the second vendor payment failing

I will test again and get back to you in regard to the shipping issue

Steve

[Mike_H]

Thanks for the reply. The devs finally got back to me and after some to and fro they disabled the per-product shipping and it started behaving!

I will do some testing this weekend to see if the payments behave now 🙂

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