[tebbers]

I think this is a real issue as I suffered from a very similar issue with Stripe Connect (see my post below) yet support seemed oblivious that you could fall into this trap. In my case, refunds were going through even when we were checking the available balance was greater than the refund amount on our server before permitting the refund request to be sent to Stripe. I do understand and agree with Edwin that a Stripe Connect custom account is responsible for its users but it just feels a bit un-Stripe that it's really not clear how to handle refunds and what the edge cases are.

Only when I realised Stripe was treating funds that were already allocated to an upcoming payout as 'available' or 'cleared' did the penny finally drop. So the refund for $100 would go through, the payout of $200 would then go through and then the customer account would be $100 in the red which would be deducted from our company Stripe account. Now we have learned to count the value of upcoming payouts as unavailable when working out the balance available for refunds.

Luckily for me this didn't happen too many times and I was lucky that my customers were billing enough that the shortfall on their accounts was cleared within a few days/weeks, but I can easily see how this could spiral into a big problem for a startup where customers are not billing so much.