Issuing refunds with negative balance + debit card is sub-optimal

[aheckler]

Describe the bug

If a merchant uses a debit card to receive deposits with, and somehow their account balance becomes negative, WC Pay can mislead them into thinking refunds were successful, when in fact they will not be (until the balance becomes positive again through new sales).

To Reproduce

I'm not sure it's possible to reproduce this in test mode, but real merchants have run into this before, most recently detailed here: paJDYF-7oz-p2

A rough outline of how the situation is encountered:

1. Be a WC Pay merchant.
2. Use a debit card to receive your deposits.
3. Make a few sales which are paid out. Now you have a $0 balance.
4. Try to issue a refund or multiple refunds.
5. Your balance goes negative.
6. Your card won't be debited. We don't do that for debit cards, only bank accounts.
7. If you don't make new sales, the refunds won't be issued to customers.
8. However, WC Pay will act like the refunds worked:

9. Later on, the customers whom you "refunded" will dispute the charge, since their refund never actually arrived.

WC Pay should watch for refunds that come through with the status set to pending. This means the refund was not in fact sent yet, it just will be sent automatically in the future when the balance becomes positive again. However, as we've seen, this might not happen in time to prevent disputes for low volume merchants.

[aheckler]

cc @jrodger since I spoke with you about this on the linked P2 thread above. Not sure which team would be best to look at this, but you will know better than me. :P Thanks!

[aheckler]

Another wild idea: maybe we can somehow detect merchants who have added a debit card and warn them with an email or inbox notification thing? The debit card + negative balance situation is very tricky/dangerous for merchants with lower volume.

[csmcneill]

Just confirming that this is a scenario that I have seen several times, though I cannot grab any specific examples.

[elizaan36]

So the refund is in the Pending state until the balance account becomes positive again. Will WCPay retry the refund immediately once the balance is positive?

[aheckler]

Will WCPay retry the refund immediately once the balance is positive?

I believe so, yes, though I have never tested that specifically.

[elizaan36]

I think the pending refund status would be enough of an indication to the merchant, with additional context in the order note if possible.

Refund is pending until account balance is positive.

[kalessil]

@dmvrtx: as you deep into topic this week, can you please share insights on #5986 (comment)? Thanks!

[dmvrtx]

So the refund is in the Pending state until the balance account becomes positive again. Will WCPay retry the refund immediately once the balance is positive?

It will be Stripe who will retry refund once account gets updated. However, if refund stays "pending" for a certain amount of time, Stripe will cancel it. I haven't checked yet how such event will be handled on WooPayments side.

[francoishvz]

7271643-zd-a8c

[zmaglica]

This issue impacts Refunds, so assigning to Pulsar (based on team responsibilities Pc2DNy-3z-p2) @kalessil . Assigning as part of Gamma Triage process PcreKM-yM-p2.

[CGA8C]

Hey @haszari can we take another look at this one?

This came up in 7845102-Zen, and has caused some major confusion.

It's notable that this doesn't just affect Debit Card users: some EEA Banks don't allow Debits, or can turn them off, which was the case here.

[haszari]

@CGA8C – this is in payments acceptance focus area, so best folks to triage & prioritise are @mjdeacon / Gamma. Let me know if there's something specific I can do to assist.

[CGA8C]

Thank you! I saw you touched this last, so I made an incorrect assumption that it was Helix related somehow 😬