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A refund is not just money leaving your account. It is an accounting event that touches four numbers at once: the ride's recorded revenue, the tax you owe, the GMV your Levy fee is calculated on, and the payout your partner is owed. Get the mechanics right and all four stay in sync automatically. Get them wrong, and you can hand a rider $4 back while quietly overpaying your partner, over-remitting sales tax, and corrupting the one record your entire settlement runs on. This lesson shows you the single rule that prevents all of that, the difference between a fare adjustment and a refund, and exactly when to reach for each.
The stakes are sharpest on Levy's revenue-share model. On the Managed plan you pay 20% of GMV (15% of GMV at 100 to 249 active vehicles on qualifying annual or approved terms), with a $250 per month platform minimum credited against your fees, and you pay when riders pay. GMV is defined as gross rider payments before taxes, government fees, refunds, and tips, so refunds sit outside GMV by design. That is the whole point of doing this correctly: when a refund is recorded against the ride, your GMV, the fee you owe Levy, the tax you remit, and the partner payout base all move together and stay consistent. When it is not, they drift apart, and you find the gap weeks later during reconciliation.
Operational guidance, not tax or accounting advice
This lesson explains how Levy's refund and fare-adjustment mechanics keep your ride records, sales tax, and partner payouts in sync. It is not tax, accounting, or legal advice. Sales-tax rules, remittance obligations, and revenue recognition vary by jurisdiction, so confirm your own treatment with a qualified accountant or tax professional before you rely on any of it.
The one rule that keeps your books correct
Here is the rule, and it is not negotiable: always adjust against the ride, never credit the wallet directly. The ride is the source of truth for every dollar of financial accounting on your fleet. The rider wallet is just where money lands after a correction. It is never the starting point.
Every refund and every fare correction has to be recorded against the ride itself. When you do that, the platform recalculates tax, updates the ride's net revenue, and (if the rider overpaid) credits the wallet as a downstream consequence of the ride adjustment. The wallet credit is the result, not the cause.
If you skip the ride and just push a credit into the wallet, the ride record still says the rider paid full price. The net revenue that partner payouts are calculated from stays inflated. Your partner gets overpaid on money the rider no longer paid. Tax gets remitted on a fare that no longer stands. And none of it shows up until your numbers stop tying out.
Never credit the wallet directly
Do not hand a rider goodwill by adding a manual wallet credit, and do not "fix" an overcharge by topping up their balance. A raw wallet credit bypasses the ride entirely, so the ride's recorded revenue, its tax, and the partner payout base all stay wrong. Every correction starts at the ride. The wallet only ever receives money that the ride's accounting produced.
Why the ride is the source of truth
Partner payouts are calculated from the net revenue recorded on each ride, and your partner share defaults to 80% for any subaccount without an explicit value set (the complement of Levy's 20% Managed fee). "Net revenue" here means what is left after Stripe processing (Levy's volume pricing of 2.6% plus $0.20 per transaction), with those processing costs shared proportionally. So the ride's recorded net is the direct input to what your partner gets paid and what tax gets remitted.
Walk the chain through once:
- Overstate the ride, overpay the partner. If a ride records $12 of revenue that should have been $8, your partner is paid their share of $12. At an 80% default share that is roughly $3.20 paid out on a fare the rider never actually owed.
- Overstate the ride, over-remit tax. Tax is calculated on the ride's fare. Leave the fare at $12 and you remit tax on $12, not on the $8 the rider really paid.
- Bypass the ride, break reconciliation. Refund through the wallet and the ride still says $12 while your bank says $8 went out. That gap is invisible until month-end, and then you are reverse-engineering it across hundreds of rides.
Do the correction against the ride and the reverse happens automatically: the fare drops to the truth, tax recalculates, the payout base falls to match, and GMV reflects reality. One action, four numbers corrected.
Fare adjustment versus refund: which one, and when
There are two correct tools, and picking the right one is the second half of doing this well. Both end with the rider getting money back, but they answer different questions.
Fare adjustment: the fare itself was wrong
Use a fare adjustment when the charge was incorrect and you are setting it to the right number. The fare was too high, and you are lowering it to what the ride should actually have cost. Classic triggers:
- GPS drift inflated the recorded distance or time, so the meter overcharged.
- A vehicle fault cut the ride short but the rider was billed for the full trip.
- The wrong rate or a stale promo applied at unlock.
- A duplicate or partial charge left the total higher than the real fare.
A fare adjustment lowers the ride's total cost to the corrected amount, recalculates tax on the new, lower fare, and credits the difference to the rider's wallet if they overpaid. Because the ride total itself moves down, the partner payout base and your GMV follow it down automatically. This is the tool whenever the ride's number is wrong.
Refund: the fare was right, the rider still deserves money back
Use a refund when the fare was calculated correctly but you have decided to give money back anyway. The math was accurate. This is a service or goodwill decision, not a metering correction. Classic triggers:
- The rider had a genuinely bad experience (a vehicle that was hard to find, a mid-ride interruption you want to make right) and you want to give a partial or full credit.
- You are settling a complaint to keep a good customer, even though the charge was legitimate.
- You are waiving a fee you had every right to charge, such as reversing an abandonment fee after the rider explained the situation.
A refund returns money against what was actually paid on the ride (to the wallet or back to the card), in full or in part, and records that refund against the ride. The ride's fare stays where it was because it was correct, but the refund is booked against the ride, so the net revenue that drives payouts and tax still reflects the money you actually kept.
The quick test: if the fare is wrong, adjust it. If the fare is right but you are giving money back anyway, refund it.
| Fare adjustment | Refund | |
|---|---|---|
| Use when | The fare itself is incorrect (overcharge) | The fare is correct, you are giving money back anyway |
| What it changes | Lowers the ride's total cost to the right number | Returns money against what was actually paid |
| Tax | Recalculated on the new, lower fare | Handled against the amount refunded |
| Destination | Credits the wallet if the rider overpaid | Wallet or card, full or partial |
| Recorded as | A corrected ride total | A refund booked against the ride |
| Net effect | Ride total drops to the truth | Ride total stands, refund recorded against it |
Both paths keep the partner payout base and tax correct, because both run through the ride. That is the common thread. Neither one ever starts at the wallet.
Wallet or card: choosing the destination
When you issue a refund (not a fare adjustment), you also choose where the money lands. This is a business decision, not an accounting one, because both destinations are recorded against the ride the same way.
- Refund to the wallet. The money stays inside your ecosystem as rider credit. It is effectively instant, there is no card round-trip, and it nudges the rider toward another ride instead of walking with cash in hand. This is the sensible default for small goodwill gestures and minor corrections where the rider is likely to ride again.
- Refund to the card. The money returns to the rider's original payment method. Use this when the rider explicitly wants their money back, when the amount is large, or when the relationship is ending and wallet credit would just sit unused. Card refunds route back through Stripe, where Levy's volume pricing runs 2.6% plus $0.20 per transaction.
Choose full or partial to match the situation. A rider overcharged by $4 on a $12 ride gets a $4 correction, not a $12 giveaway. Generosity is fine when the relationship is worth it, but decide it on purpose, not by fat-fingering the amount.
A worked example: the $12 ride that should have been $8
Make it concrete. A rider is billed $12. Your telemetry review shows GPS drift inflated the distance and the true fare was $8.
The right way. You open the ride and adjust the fare to $8. The platform recalculates tax on $8, drops the ride's recorded total to $8, and credits the $4 overpayment (plus the tax difference) to the rider's wallet. The partner payout base falls from $12 to $8, tax is remitted on $8, and your GMV reflects $8. Every number is correct in one action.
The wrong way. You leave the ride at $12 and drop a $4 credit into the wallet to "make it even." The rider is happy, but the ride still says $12. Your partner is paid their 80% share of $12, roughly $9.60, when it should have been about $6.40 on $8 (a $3.20 overpayment), you remit tax on $12, and at reconciliation the $4 that left your account has no ride to explain it. Same rider, same $4, completely different books. The only difference is whether you started at the ride or at the wallet.
These dollar figures are round numbers picked to make the mechanism obvious. In practice your real payout base is net revenue after Stripe processing (2.6% plus $0.20 per transaction, shared proportionally), so a true 80% share runs a little under a flat 80% of the gross fare. Treat any "80% of gross" figure as a conservative estimate, not an exact payout. The point that does hold exactly: correct against the ride and every downstream number follows, leave the ride wrong and every one of them drifts.
Handling fare disputes and chargebacks
Not every disagreement is one you resolve quietly in the dashboard. There are two shapes of dispute, and they take two different paths.
An informal dispute is a rider messaging support to say they were overcharged or want money back. You investigate, decide, and resolve it yourself with the right tool: a fare adjustment if the meter was wrong, a refund if you are choosing to give money back. Fast, in-house, and fully recorded against the ride.
A chargeback is different. Here the rider skipped you and disputed the charge directly with their bank or card issuer. This is a formal financial process with evidence, deadlines, and a win-or-lose outcome. On the Managed plan, this is exactly the kind of work Levy runs on your behalf: managed payments include disputes, chargebacks, collections, and dunning, so you are not personally assembling evidence packets against a card network. Your job is to keep clean ride records, because those records are the evidence. If you have been correcting against the ride all along, your dispute posture is strong, because your records match reality. If you have been papering over problems with wallet credits, your records lie, which is the worst position to defend from.
Investigate before you refund
Before you correct anything, look at the ride: the telemetry, the route, the start and end, the end-of-ride parking photo, and the fee breakdown. Many "overcharges" are real fares the rider misread, and some "correct" fares are genuine metering errors. Choosing between a fare adjustment and a refund starts with knowing which one you are actually looking at. The billing and payments help center covers how fares, fees, and reconciliation are calculated.
A repeatable refund decision workflow
Turn all of this into a routine your support team can run the same way every time, without guessing.
Open the ride and read what actually happened
Start at the ride, always. Review the telemetry, distance, duration, rate, and fee breakdown. Decide whether the fare is wrong or the fare is right. That single determination sends you down one of two paths.
If the fare is wrong, adjust the fare
Set the ride to the correct total. The platform recalculates tax, lowers the ride's recorded revenue, and credits any overpayment to the wallet. Do not also issue a separate refund on top, or you double-refund. The adjustment already returned the difference.
If the fare is right, decide whether to refund
The charge was legitimate, so this is a business call. If the relationship is worth it, issue a refund against the ride, full or partial, and pick the destination: wallet to keep the money in your ecosystem, card to return it to the rider.
Never touch the wallet directly
No manual wallet credits, ever. If you find yourself about to add balance to a rider without going through the ride, stop. That is the exact move that corrupts payouts and tax. Route it through the ride instead.
Note the reason and move on
Record why you made the correction. Clean reasons keep your reconciliation legible, strengthen your chargeback defense, and let you spot patterns (one vehicle throwing GPS drift, one zone generating complaints) worth fixing at the source.
Frequently asked questions
Why this is a margin decision, not a clerical one
Refunds are not customer-service housekeeping. Every one flows straight into the numbers that decide your unit economics: what you keep, what your partner is paid, and what you remit in tax. A fleet that corrects cleanly against the ride knows its true margin ride by ride. A fleet that patches problems with wallet credits is slowly lying to itself, and that lie compounds until reconciliation forces a reckoning. For how these numbers roll up, read the profitability fundamentals for a scooter rental business, where utilization and clean accounting decide the margin.
Billing and payments help center
How fares, fees, taxes, and reconciliation are calculated, with step-by-step guidance for corrections and disputes.
Start at the ride, pick the correct tool, choose the destination on purpose, and let the platform keep GMV, tax, and payouts in sync. Want to see how the refund, adjustment, and payout flow works for your fleet size and vehicle mix? Book a demo and we will walk it through with your numbers.