Race Reserve Requirements
The Coronavirus is impacting us all. We did a webinar that explains chargeback liability as well as these new reserve and payment policies back in March. Some things have changed but the dynamics are still valid. If you want to hear the logic behind all of this, please watch the webinar.
Also note that we are not alone in implementing these types of procedures. Eventbrite announced they are holding all funds until after an event successfully completes. We are trying to implement policies that allows cash to flow to event producers yet still uphold both our obligations and your obligations to credit card holders as a payment processor.
- 5% on all Races
- 0% on Donations, Memberships and Invoices
- 2.5% on Payment Accounts
There is a requirement for both the 5% race reserve and the 2.5% payment account requirements to be met before additional funds are transitioned to your payment account. These also apply to virtual races as these traditionally have risk associated with them, and there is not a good way to track shipments and results. Let’s look at the various use cases:
Scenario 1: You list a new race with a new payment account. In your first week, you collect $1,000 in race registrations and $500 in donations.
We will pay 95% of registration revenue and 100% of donations on the regular schedule. So, in your first week, you will be paid 95% of the race registrations ($950) plus all of your donations ($500) for a total of $1,450 transferred to you on Tuesday (for weekly payments). $50 will be held in reserve. The reserve will be paid according to the Post-Race Reserve Requirements below.
Scenario 2: You have a multi-race payment account in which Race A has $10,000 of race fees and has a $500 reserve. Race B has $30,000 of race fees but a reserve of $400.
While Race A has met its reserve requirement and looks like it would only have 5% held moving forward, there is also an overall payment account requirement of 2.5%. For this account of two races ($10,000 + $30,000) = $1,000 reserve requirement. So if Race A gets $1,000 of registrations, it will not have the full 95% released because an additional $100 is needed to meet the overall payment account reserve of $1,000.
This type of cross race catch-up payment will most likely come into effect only if there are significant refunds or chargebacks on one of the linked races that get the reserve out of compliance.
Post-Race Payment Policy
- For most races the standard reserve policy (currently 5%) will remain in effect for the week after the race. This means that if a race was already at the required reserve and received registrations between Tuesday and Saturday then 95% of those fees would be paid on Tuesday after the race.
- Manual Review by RunSignup to set reserve requirements to go into effect 8 days after the race. For example, if a race happens like the normal days with 80% of participants showing in the check-in app, results posted, happy Facebook comments, etc. then the reserve would be reduced to 0% and all funds would be released on the Tuesday 8-9 days after your Saturday or Sunday race. If our team is unable to verify the race status, participant satisfaction or shipment of materials for a virtual race then the hold remains in place. Chargebacks would trigger a delay (see below).
- Three weeks after the 8 day hold, the balance will be paid. Again, this is subject to the chargeback trigger.
- If a chargeback is received for the race, during either the 8 day hold or the 3 week hold, then it triggers a further 3 week delay in payment from the date of the chargeback.
This new algorithm for post-race payments is now our standard process and will apply to races by default.