Merchant Services - Adyen

So that leaves your question of why...

Hi all,

Let me try to answer this.

The funds available for refund at any given point in time is the sum of four amounts. 

1. Funds that have been taken in and not yet settled--because Merchant Services pays out every week day, that would typically be the amount taken in so far on that day. 
2. Funds that are in queue to be paid out but net yet sent to your bank--Merchant Services payouts occur 2 business days after the transaction so typically you would have an entire day's worth of sales (yesterday's) available for refunds. 
3. Any reserve amount that you as a member may have manually put on deposit with Merchant Services. This is entirely optional 
4. A 5,000 Euro (about $5,400 USD right now) negative balance that is always available as a float amount for each member.  This float amount is available to draw upon when funds in the first three buckets aren't sufficient.  The negative reserve is then automatically topped up the 5,000 Euro amount of payments that come in after it is drawn down.

So in your first question, yes $10,000 would be available for your contribution refund.  If the sum of the four amounts is greater than the refund request at the time of authorization, the refund will go through.

Second question:  A manual bank transfer typically takes two days.  I don't understand the part about reclaiming this from Adyen--the funds you deposit in your reserve account will be spent down for the refunds.  If the question is "what if I transfer too much into reserves; how do I get that back?"  I will have to do a bit of research on that.  As I said, so far we have only worked with a few manual transfers for refunds in the whole time we've been working with Merchant Services.

Third question:  I'm think I'm going to agree with you that this is an accounting issue on your side.

Fourth question: With Merchant Services in the case you describe, if a customers gives you a card number to refund to (you don't already have the card on account), you are able to do that through a terminal.

Thanks!

Chuck Reif, thanks for that breakdown.  That is extremely helpful as we get ready to move to TMS ourselves.  But, and I think Gawain Lavers is hinting around this, but let me ask this question then.

Hypothetical Situation:  (numbers have been simplified for the ease of mental math and forum questions)

Let us say we are notified that our performances by John Smith need to be cancelled and completely refunded because he fell down the stairs and broke both his legs.  Now, we want to get a jump on this because communication is key.  We know we do, on average, $25,000 in ticket sales per day, so would have approximately $25,000 in your #2 line.  We got the notice about the cancellation at 10:00 AM, just as we opened, so we know that we have taken in only about $5,000 thus far in online sales from your #1 line.  We predetermined that we wanted $50,000 in reserve with TMS, so that is sitting there in your #3 line.  And, we have an additional $5,000 (+ $400) in your #4 line.

Thus, in total, we have $85,000 available for refunds ($50,000 + $25,000 + $5,000 + $5,000).  If that is incorrect, please let me know where I made my mistake.

But, John Smith happened to be a BIG seller for us, and his booking took in a total of $150,000.  Now, we always have outstanding issues that need to be delayed, which will probably result in about $25,000 worth of tickets that are not going to be refunded that day.  But the other $125,000, we would like refunded.

Question:  I think the question is, how should we bridge THAT gap?  Can we do a quick transfer to TMS/Adyen of an additional $40,000 to make up the gap between $85,000 and $125,000?  Or are we stuck at $85,000 that day?  And then how quickly can we put the additional $40,000 into action?  What about replenishing the initial $50,000 we had in reserve?

Just trying to make sure I know exactly how this works so as to best advise my staff.  On the whole, assuming I understand things correctly as you describe, I am NOT worried at all about our organization running into too many issues here.  But, in the vein of the Boy Scouts, I like to be prepared.

Thanks!

John A. Moskal II

Some additional information on question #2.  In the case where a member wants to reclaim extra funds that may be have been added to the reserve account but not used, it is possible for Tessitura Payment Support to set the reserve amount to 0 (or some other value) which will result in the overage being added to the next payout.

Chuck Reif said:

I don't understand the part about reclaiming this from Adyen--the funds you deposit in your reserve account will be spent down for the refunds.

We don't know how many payments we will be able to refund by reference until after we have run the Event Cancellation Utility.  The failures from that utility then have to be addressed manually.  Some of that might be doing a direct refund (although it sounds like that's not going to be as broadly possible with TMS as it is with Windcave) which would also potentially draw down from the reserve, but then the rest of it would have to be cut checks, so we would then need that money back from Adyen to direct to campus finance.

Thanks for the easily understandable example!  In this case, you would have to either do the refunds in tranches over a couple of days or you could top up the reserve account.  That process, however, can take up to two days.  So in the case where you have a fairly steady income stream on a daily basis it might just be easier to split up the refunds.  However, if you want to process them all in a single day, then doing a reserve top up from your bank and waiting the couple of days might be the better answer.

We are working on several things with Adyen to improve the product.  First, we would love to see this information available in Essentials so that you always are able to look at your balance.

Second, we are looking to provide a way to have automatic reserve top ups.  So that if you always wanted to maintain (in your example) a $50,000 reserve for refunds, that amount would be automatically topped up from your bank on a nightly basis when it falls below a certain percentage of that amount. 

On the longer term side we are working on with Adyen is the ability to further automate this process in some way--either automatic bank transfers when additional refund amounts are needed, or the ability to have something like a line of credit for such circumstances.  Solutions like these are much bigger changes that will take a lot of investigation so I really don't have any idea what or when or if we will be offering something like that.

Since the Event Cancellation Utility allows a List of Constituents to Include or Skip, it appears to me that we need a method for identifying a list of constituents that paid with a credit card and the amount of that payment minus any refunds.

Are there any existing reports that would help with this?

Also, since you said payouts are only done on weekdays, would the "Yesterday's cc" amount include BOTH Saturday's and Sunday's amounts for line #2 (Yesterday's CC)?

Using JAM 3.0's example, I'd want a set method of computing how much we can refund on any given day/moment.Something as simple as this:

You can get a lot of this information from running the Event Cancellation Utility in Preview mode.  If you save it as a .csv (Excel won't work because of the formatting) you will have sortable columns that will help you identify groups of customers.  Since dollar figures weren't important to us before I don't know if it has useful numbers for that.  When computing the numbers you have to be mindful of the possibility of refunding fees.  As I expect many organizations with per-order fees do, we refund the ticket amount, and if the order only contained refunded tickets, we refund the fee as well.  The Utility handles all that nicely, if it can just run on it's own without any concern over the amounts.

Even though such an event would likely be off sale and otherwise locked down, I wouldn't particularly want to run the Utility, sum up the expected refund total, then sit on it for two days hoping none of the numbers change.  And even then you won't know ahead of time if any of the cards you're attempting to refund have been cancelled or are otherwise unavailable.

Depending on the size of the event or events, of course, you could expect the float amount to cover minor discrepancies, and missing cards will just result in having your money sitting in Adyen's pocket for a few days/weeks.