Hello,
We would like to ask for clarification on the correct way to handle refunds, as one specific case resulted in a negative balance on our side and we are not entirely sure where the process went wrong.
Case details:
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The merchant (ID: 93246554458) installed our app (ID: 6953501) on August 8, 2025 at 9:07 PM.
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On August 8, 2025 at 9:08 PM, the merchant activated an annual subscription (ID: 55761863002).
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On September 6, 2025 at 7:28 AM, a charge of $149.99 USD was processed.
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After discussions, the merchant decided to cancel the app, and at the merchant’s request we issued a refund on October 30, 2025 at 3:02 PM for $149.99 USD.
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The app was uninstalled by the merchant on October 31, 2025 at 8:23 AM.
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The merchant then reinstalled the app on December 16, 2025 at 10:03 PM.
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A few days later, on December 19, 2025 at 2:31 PM, the merchant activated a new annual subscription with a 20% discount.
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Shortly after that, on December 19, 2025 at 2:54 PM, a transaction of –$98.21 USD appeared, described as
type: ApplicationDowngradeAdjustment.
As a result of this flow, our current balance is negative.
We do not fully understand:
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why a transaction of type ApplicationDowngradeAdjustment was generated in this scenario,
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at which point in our refund handling process we are acting incorrectly,
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and what the recommended flow is for handling refunds and app reinstalls in order to avoid negative payouts in the future.
We would appreciate guidance on the recommended best practices for handling these situations on the app side.
Thank you in advance for your help.