Managing your Refund Reserve
Last updated: January 22, 2025
Languages: English, Español
Your Refund Reserve allows you to hold money in FareHarbor to use specifically for refunds. We recommend keeping money in your Refund Reserve to ensure that any refunds can be processed as quickly as possible. You cannot set up the Refund Reserve until your bank has been added and verified.
Note: If you have a bank account based outside of the United States, or if you have not yet verified a bank account in FareHarbor, your options will be different. See the Non-US or pending bank accounts section below.
How does the Refund Reserve work?
Think of the Refund Reserve as a way to store money for refunds. You can manage how money goes into your Refund Reserve by either initiating one-time transfers or setting up recurring transfers.
For example, if you want $100 dollars in your Refund Reserve, you can set up a recurring transfer of $25 with an autofill limit of $100. Each day, $25 will be moved from your daily sales into your Refund Reserve. In four days, your Refund Reserve will have reached your $100 autofill limit and daily transfers will stop.
Transfers will only begin again if your Refund Reserve drops below your limit of $100, and daily transfers will only occur when you have sufficient funds from your daily sales. You can customize your autofill limit and daily transfer amount to make sure you have what you need to issue refunds quickly and easily.
Tip: You can check how much you currently have in your Refund Reserve by navigating to Settings > Bank & Payments, and selecting the Refund Reserve tab. The “Total available for refunds” is how much you have available in your Refund Reserve.
Managing recurring transfers
Recurring transfers are used to manage the amount maintained in your Refund Reserve. By default, recurring transfers will be set to off. You can use recurring transfers to automatically set aside a portion of future payouts to be transferred into your Refund Reserve. Recurring transfers will only occur when the Refund Reserve balance drops below the autofill limit.
To set up recurring transfers:
- Go to the Settings > Bank & Payments section of your Dashboard.
- Choose the Refund Reserve tab.
- Select Manage recurring transfer.
- Set “Recurring transfer status” to On.
From the next dropdown, select whether you want to set a percentage or fixed amount, and enter the preferred maximum transfer amount.
Set a “Refund Reserve autofill limit”.
If reached, recurring transfers out of your future payouts will stop until the amount in your Refund Reserve drops below the autofill limit.
Select Save.
Note: If you have a recurring transfer set up, you will see a pending transfer in the “Payouts” report.
What should I set my recurring amount to? What should my Refund Reserve autofill limit be?
It depends on your business. Use the questions below to think about how the Refund Reserve can work best for you:
- How often do you issue refunds?
- What is the average refund dollar amount you process?
If you want help or additional guidance, feel free to reach out to us at support@fareharbor.com.
One-time transfers
In addition to automatic recurring transfers, you can also initiate one-time transfers. Transfers can move money from future payouts into your Refund Reserve, from your Refund Reserve into your future payouts, and, for US banks, from your bank directly into your Refund Reserve.
To initiate a transfer:
- Go to the Settings > Bank & Payments section of your Dashboard.
- Choose the Refund Reserve tab.
- Select Transfer money.
Choose your source and destination for your transfer.
Enter the amount to transfer.
- Optional: Add a note.
- Click Transfer.
Keep in mind that it may take from 3-7 business days or longer for transfers to or from your bank account to reflect in your bank statement.
Autofill limits and one-time transfers
If you make a one-time transfer from your Refund Reserve to your future payouts and your Refund Reserve amount is below the autofill limit, your Dashboard will automatically try to fill your Refund Reserve back to the autofill limit, meaning that your one-time transfer may get automatically put back into your Refund Reserve.
Let’s look at an example and say your Dashboard has the following:
- Your Refund Reserve is currently at $1000.
- Your future payouts is currently at $0.
- Your autofill limit is $1000.
- Your maximum to transfer from payouts is $100.
You decide to make a one-time transfer and move $100 from your Refund Reserve to your future payouts. Your Refund Reserve balance is now $900 and your future payouts balance is $100. However, because your autofill limit is $1000, your Dashboard will automatically take the $100 in your future payouts and transfer it back to your Refund Reserve.
To avoid this scenario to make a one-time transfer and bypass your Refund Reserve:
- Turn off your recurring transfers.
- Make your desired one-time transfer.
- Once that future payout is sent, turn the recurring transfers back on.
Non-US or pending bank accounts
If you have a bank account based outside of the United States, use Payoneer, or have not yet verified a bank account in your Dashboard, keep in mind that FareHarbor won’t be able to debit your bank account to process a refund (this is because our payment processor currently only supports ACH transfers for banks based in the United States).
To guarantee you have enough money in FareHarbor to cover refunds, we recommend transferring money to your Refund Reserve by following the steps above.
Note: If you do not have enough money in your Refund Reserve or Future Payouts balance to issue a refund, you have two options:
- Wait for bookings to come into your Dashboard. Once you have enough money in your Future Payouts balance, issue the refund.
- Transfer funds to FareHarbor via a bank transfer. To learn more about this process, please contact FareHarbor Support.
If you have questions or would like assistance with this process, please contact FareHarbor Support.
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FareHarbor Admin features
Transfer money from bank to FareHarbor’s main account: This feature allows transfers from a company’s bank account directly to FareHarbor’s main account (Note: This option is only available for US bank accounts).
Note: You cannot set up the Refund Reserve until the bank has been added and verified.
Permissions required for Refund Reserve
To see the Refund Reserve tab, a user must have the “Payouts, Refunds, & Debits” permission enabled. To enable this, go to the permission group for a user, select Edit>>, then select Reporting, and under “Reports”, select Payouts, Refunds, & Debits and select Save.
To transfer money from a bank account to the refund reserve (if it’s a US company), a user must have “Transfer money from bank account to refund reserve” permission enabled. To enable this, go to the permission group for a user, select Edit>>, then select Setup > Manage bank accounts, payment setup, and transfers > Transfer money from bank account to refund reserve, and select Save.
Who should use this?
Everyone! This feature is especially useful for all non-US clients and tier 0’s and 1’s (US).
How should clients set this up?
Ask the client these questions (empower the client to make their own decision based on their business and encourage them to switch it up if something changes. There are no correct amounts):
- How often do you issue refunds? (for example: twice a week)
- What is the average refund dollar amount you process? (for example: $500)
- Example answer: “Since you process about $500 on average twice a week – I’d recommend starting out with $1000 as your refund reserve autofill limit. The percentage or dollar amount for the recurring transfer depends on how fast you want to get to that $1000.”
Best Practices
- Pre-Live: AE and Trainer should educate the client on the feature.
- Post Go-Live
- FareHarbor (Marketing) will send out blast reminder email to let them know about this feature – pushing them to turn it on (email list: Non-US clients that have bank added/verified that DON’T have recurring transfers on).
- Once a month, Business Intelligence (BI) runs a report to show accounts that have a verified bank account but recurring refund reserve is off. We will send these accounts reminder emails via Mailchimp.
- For Support, when existing clients call in about refunds generally, have Support use this opportunity to tell them about the feature if it’s not currently turned on. If clients have any questions about the new feature, Support should be able to answer all questions. If not, send the ticket to Payment Operations.
- Notes
- Non-US companies need to turn this on
- US companies can turn this on (not 100% necessary)
- Companies can change up their settings to see what works best for them at any time.
- Suggestions for autofill limit / maximum transfer from future payouts based on tier: Click here
Video tutorials
Refund Reserve Basic Overview
Watch this video for a basic walkthrough:
See this Recordit for a simplified walkthrough. Or watch this longer video with audio for a walkthrough.
Refund Reserve: Reports
Watch this video for a tutorial on Reports and Refund Reserve:
See this Recordit for a walkthrough on Old vs New reports regarding Refund Reserve.
EMEA/APAC Basic Overview
Watch this video for a tutorial on EMEA/APAC-specific Refund Reserve:
Non-US/pending accounts
We always recommend that non-US companies (or companies with a pending bank account) check to make sure they have enough in their refund reserve before issuing a refund. Setting up a recurring transfer is the easiest way to do this.
Top Up Transfer – A client may need to deal with a huge influx of refunds at one time due to unique circumstances (i.e. global pandemic, natural disasters, etc), which is where the “refund reserve top-up” comes into play. We can top-up a client’s Refund Reserve after the client has transferred the funds to FareHarbor via a bank transfer.
If a client does not have enough money in their refund reserve to process a refund, in addition to the two steps mentioned on the client-facing page, it is also possible to enable “Payout only after availabilities have ended” in advanced company settings, essentially allowing clients to be paid after the availability takes place, letting them refund bookings anytime before the availability. Check with the client’s AE/AM before suggesting or proceeding with this option.
If a client needs to make a direct booking, ask them to make it for more than the amount they want to refund (to account for credit card processing fees).
Keep in mind:
- For a full refund, FH refunds the CC processing fee in its entirety.
- For partial refunds, the refund process is different:
- For a partial refund, FH keeps the 30c from the original charge and prorates the 1.9% of the refunded amount (assuming the cc rate on their dash is 1.9% + 30c, which is not always the case). So let’s say that a direct booking comes in for $100. The client nets out 97.80 after cc processing costs, and the money is paid out to the client’s bank account. A few days go by, and the end user cancels and the Non-USD bank account client wants to refund $50. Unfortunately, the Non-USD bank account client has no money in their refund reserve to issue a partial refund. The client swipes their own credit card to add money to their refund reserve so they can issue a refund, but now only net out $48.75 (assuming the cc rate on their dash is 1.9% + 30c). But the client wants to issue a refund for $50. Keep in mind, FH will contribute 95 cents to the refund (this is 1.9% of the $50 they want to refund), but not the 30c (because the original cc charge still occurred). So the client contributes 48.75, FH contributes .95, for a total of 49.7, and the refund can not go through. For this reason, it is always best for a Non-USD bank account client whose refund reserve and Future Payouts balance is 0 that wants to add money to their dashboard to swipe their card for more than the amount they wish to refund.
Payoneer and Wise accounts
If you’re unsure whether a company has a Payoneer account or not, you can check in the Bank & Payments section of their Dashboard for more info. Payoneer always shows up as “First Century Bank” under Bank Accounts:
For Information about Wise (formerly known as Transferwise) see this page.