The refund reserve is used to cover for credit card charges you may need to refund. Whenever you process a credit card refund, your Xola account balance is drawn down by the refund amount. If you have a balance that can cover this refund, the refund is processed successfully. However, if your balance is less than the refund amount, the refund will be rejected.
For example, if you had a balance of $100 and are attempting the refund $120, the refund will be rejected because your balance cannot cover the refund amount.
To mitigate against your refunds being rejected, we recommend that you configure a refund reserve that can cover worst case days. Depending on your business, this might mean reserving a day's worth of bookings, or several day's worth of bookings -- this is entirely predicated by the type of business you run and you will be the best judge of what is an appropriate refund reserve.
Configure the Refund Reserve
- Go to the Payout Report (Reports > Payouts)
- You'll see the Refund Reserve value at the top of the page. If you've never configured it before, the value will be $0. Click on the refund reserve value.
- Click on the Edit Refund Reserve button.
- A modal opens that lets you configure the minimum balance you wish to maintain.
- Click Save to confirm your setting.
Refund Reserve Report
The Refund Reserve Report will display all transactions that are currently held in your Refund Reserve.
The following conditions are used when deciding which transactions to reserve:
- The refund reserve logic triggers whenever a Xola payout cycle begins.
- If the expected payout amount will drop your balance below the configured Desired Balance, Xola will hold transactions such that the desired balance is retained.
- For example, lets say the desired balance is $200, your current balance is $400, and you have 3 transactions to be paid out ($100, $120, and $50). This brings the expected payout amount to $270 and the balance after payout would be $400-$270 = $130. Since $130 is less than the desired balance, Xola determines that at least $70 ($200-$130) needs to be held in reserve. The first transaction of $100 will be held. This will make the new payout amount $120+$50 = $170.
- Only credit card transactions will count towards your Refund Reserve.
- Transactions to be held will be considered from oldest to newest.
- Reserved transactions are held in full (never partially).
- For example, if the reserve is $200 and a $500 transaction is the oldest transaction, Xola will hold the entire $500 in the Refund Reserve. No partial payouts will be done.
When you initially setup your refund reserve, there may be insufficient transactions to cover your desired balance. In this case, your report may look like this:
Once the balance is met, the report will look like this:
Refund Reserve Confirmation Email
Anytime you make changes to your Refund Reserve, Xola will notify the primary account owner of the change with the following email.
- This email is only sent out when the Refund Reserve amount is edited.
- No email is sent:
- When transactions are refunded in Xola and the reserve balance goes down.
- When Xola continues to fill the reserve that you have set with new transactions, as needed.
Frequently Asked Questions
Let's assume the desired refund reserve is set at $200 for the answers below.
Is the Refund Reserve a separate account?
No. The refund reserve configuration informs Xola of the minimum balance you want to maintain in your Xola account. This ensures that whenever a payout happens, Xola never pays out an amount that would reduce your balance below the desired amount.
How do Transactions create my Refund Reserve?
Your refund reserve is funded/de-funded just before a payout. If the expected payout amount will drop your balance below the configured Desired Balance, Xola will reserve transactions such that the desired balance is retained.
For example, if the desired balance is $200, your current balance is $400, and you have 3 transactions to be paid out ($100, $120, and $50). This brings the expected payout amount to $270 and the balance after payout would be $400-$270 = $130. Since $130 is less than the desired balance, Xola determines that at least $70 ($200-$130) needs to be held in reserve. The first transaction of $100 will be held. This will make the new payout amount $120+$50 = $170.
How does the reserve balance work when the Xola Balance is $0?
When the reserve is set and the Xola balance is $0, initially nothing will happen. At the time of your next scheduled payout, if there were any new transactions, they will be reserved such that your balance remains at at least $200. If your new transactions total less than $200, then the payout is deferred
How will my Transactions, Earnings, and Payouts reports look after setting up Refund Reserve?
Nothing changes to Xola's existing reports. There is a new report in the Refund Reserve view that lists the reserved transactions. Payout reports won't contain these reserved transactions.
If my first transaction is $500, will a partial $200 be reserved or the entire amount?
If the $500 transaction is the oldest transaction that has not been sent in a Payout, then Xola will hold this full amount in the Refund Reserve. Xola cannot payout a partial portion of any transaction.
How can I un-reserve some of my reserved transactions?
There may be situations where certain transactions are held in reserve for very long periods of time. This may happen if your daily income is consistently less than your desired balance. If you want to get paid out for some of your older transactions, you will need to temporarily disable you refund reserve.
- Configure your Desired Balance to be $0.
- Wait overnight for your payout to happen.
- The following day, re-configure your Desired Balance.