refund Gratipay 1.0 balances

[chadwhitacre]

In Gratipay 2.0 we state the following:

You have until August 19, 2015 (90 days) to migrate your incoming payments from your Gratipay user account to a new Gratipay Team; this will also pay out your current balance. On that date, we intend to clear all remaining payments to Gratipay users, and to clear the balance of any user that is not an owner or member of a team, by refunding the money back to the sources it originally came from.

Since that was published, we've added a way to cash out 1.0 balances, so that's another option folks have before the big refund. We've also pushed the date back to October 1.

Notify

• https://gratipay.freshdesk.com/helpdesk/tickets/3103

[chadwhitacre]

We should notify affected people about this 30 days out, on Monday, July 20.

[chadwhitacre]

Draft 1

You are receiving this message because you are carrying a balance of $__.__ on Gratipay.

Three months ago, prompted by legal concerns with our old terms of service, we wrote new terms of service and relaunched as Gratipay 2.0. As mentioned in the 2.0 announcement, we intend to clear out remaining Gratipay 1.0 balances by sending funds back to the original donors to the extent possible. The date for this will be August 20, thirty days from today.

If you would like to withdraw your Gratipay 1.0 balance rather than having it refunded to your original donors, then you have two options:

1. Apply for a new Gratipay Team.
2. Apply for a one-time payout.

In either case, if we approve your application, we will pay out your balance during the next weekly payment cycle. There are five more payment cycles from today before we refund remaining balances. Whatever we are unable to refund to the original donor, we will donate to Watsi.

[chadwhitacre]

August 19 is a Wednesday. Let's push back a day to August 20, to give people that extra payment cycle to get in on payouts.

[chadwhitacre]

That would put 30 days out at Tuesday, July 21. We should send a second email a week out, on August 13. And of course we should send a final email when it's done.

[chadwhitacre]

Here's what we should get done before we send out the 30 day email:

• Make team applications suck less.
• Implement a one-time payout application.

[chadwhitacre]

Should we try and pull off #3378 as part of this?

[chadwhitacre]

We should also make August 20 the deadline to migrate tips to a new team.

[chadwhitacre]

A precedent, from two weeks after we launched:

As a result, most of the money we collected—over 90%—has gone unclaimed. As of today there’s nearly $150,000 in earmarked money sitting in a separate, untouched bank account.

http://blog.readability.com/2012/06/announcement/

[chadwhitacre]

First draft: "Flushing the Lines."

[chadwhitacre]

@mattbk Can you read that over and see if it makes sense from a support point of view? What questions are people going to ask? Does this post give you the info you need to be able to answer their questions?

Also, I think we should push back the date on this. We need to get some stuff done before we can make an announcement:

• Clean up more Pivot bugs, ideally all of them. We want lots of traffic to Gratipay with this post, and we want to not confuse people with bugs when they show up.
• Implement the application process for Option 2 (should include email notifications as appropriate), and finish implementing the process for Option 3, which now is supposed to include Option 2 as well as streamline team review #3568. We want @mattbk to be able to manage the review queue for Option 2.
• Pin down the escrow work we want to get done and budget enough time for it. I want to come out of this with a reviewed (find a CPA inside.gratipay.com#285), double-entry-accounted-for (refactor for double-entry accounting #3618) escrow, with minimal escrow sources (escrow the minimum possible #1383).
• Check on https://github.com/gratipay/legal/issues/10 about donating remainder to charity, and review regulatory references.

Let's do this right, people.

[mattbk]

Questions people may have on first reading:

• Flushing money? That sounds scary.
• What's a tip graph?
• Takes until end of 2nd paragraph to know where the money is going (back to donors or to charity).
• That "subscriptions" word pops up again.
• I still don't know what a tip graph is, and why that makes it impossible for me to apply for a team.
• "refund your balance back upstream to the donors it originally came from" You're taking my money and giving it back to the original donors?

Most people are interested in one thing: "What's happening to my money?" If they have to wade through a lot of details, they'll skip reading everything and end up confused. I suggest you keep the first paragraph (or variation), then skip to "Your Options" section, then include the rest of the first section in details somewhere. This will let people get the information they need up-front, but also be able to dig into details and motivations if they really want to.

[stevepiercy]

Option 3 does not resolve an issue that I reported in FreshDesk ticket #2427. Specifically, that I don't want to create a new (and second) PayPal account for a Team when I already have one for my current ~user. I don't want to do create a new PayPal account for KnopProject (e.g., [email protected]) because it would require putting my personal information into an organization's PayPal account, and PayPal can and does freeze organization assets.

[mattbk]

I think the confusion here lies in the fact that you have a ~user account set up to be the owner of your team, when ideally you would just use your own ~user account as the owner. That way all payouts go to the owner (~user).

This is predicated on the plan to bring back payroll, wherein a team would be made up of multiple ~users (one of them being owner), and all divying up of funds would happen within Gratipay.

If payroll never comes back, there would be a case for having a separate ~user owner for each team (but it would be a poor representation of a team), because that ~user owner would be responsible for receiving payouts and distributing them among the team members, which adds a lot of friction.

[stevepiercy]

@mattbk nailed it.

For me, as the owner of a Team, bringing back payroll is a requirement to use Gratipay. I am concerned, however, that ~PersonUser should not assume the liability of taxes, labor law, and reporting requirements for distributing funds to Team's Members.

I'm not certain about the current transition state, but I'm patient and will wait for good things to come.

[mattbk]

I already sent this to @stevepiercy, but copying this here from gratipay/inside.gratipay.com#242 (comment) for clarification:

Does a ~user/owner assume liability for reporting income to the team to the government, in the same way an employer must?

Yes. That's section 5.iii of the new terms.

You are responsible for paying any taxes and withholdings associated with your use of the Service. Team Owners, and not Gratipay, are responsible for compliance with all laws, as well as any taxes and withholding requirements, applicable to payments made to Team Members (whether through the Payroll feature or otherwise), including without limitation payroll tax, unemployment insurance, and worker compensation insurance payments. Team Owners are also responsible for providing any required tax and other documentation to employees, independent contractors, tax authorities, or any other person.

[stevepiercy]

@whit537 For the purposes of this draft, and for those who wish to become Team Owners, I think it is important to emphasize section 5.iii in the new terms. Assuming the role of Team Owner has greater responsibility and more duties than an ordinary User, and constitutes a significant change from the ordinary User perspective. Currently the draft has no mention of tax or other additional responsibility for this role. Thanks for your consideration.

[chadwhitacre]

I've shared the blog post with The Changelog and Pycoder's Weekly.

[mattbk]

What will happen to ~users who have a balance but who are unable/unwilling* to create a PayPal account before refunds happen? Is it even possible we'd have a bank payout available before October 8th?

*Unable may be due to local laws, e.g., PayPal is not available in South Africa.

[chadwhitacre]

@mattbk There's a slim chance we could have U.S. bank payouts before Oct. 8, if someone implements Dwolla (#726), but certainly not non-U.S. If someone in South Africa needs a payout we would have to find an alternative. E.g., we used Transferwise for the first time recently: gratipay/inside.gratipay.com#249. I think we should take this on a case-by-case basis since most people will probably be fine with PayPal. Sound right?

[mattbk]

We have a number of participants with a 1.0 balance less than PayPal's minimum payout of $0.50. How are we going to pay them out? Dwolla (#726)?

https://gratipay.freshdesk.com/helpdesk/tickets/3103 says she doesn't want it. The ~user is marked as "too little" but would it go to donation if I changed that to "completed"? User also wants to close account, otherwise this wouldn't matter.

[chadwhitacre]

@mattbk Leave it as pending-application. That's what we'll use to determine what to refund on Oct 8. I think she'll need to wait until Oct 8 to close her account, maybe start a "Notify" list?

[mattbk]

Can't use pending-application, there's no payout route.

[mattbk]

If someone in South Africa needs a payout we would have to find an alternative. E.g., we used Transferwise for the first time recently: gratipay/inside.gratipay.com#249. I think we should take this on a case-by-case basis since most people will probably be fine with PayPal. Sound right?

Sounds right.

[chadwhitacre]

Can't use pending-application, there's no payout route.

Sorry ... too-little is also fine.

[chadwhitacre]

Just got off the phone with Matin. Walked him through our situation. Take-aways:

• Balanced is still on track to have the refund API open until October 9. No problem from that perspective.
• Whatever is left in our Balanced escrow account after October 9 will be sent to our bank account.
• Issuing lots of tiny, old refunds is very likely to trigger risk checks at multiple levels: with Balanced's banking partner, with the card brands, and with the issuing banks.
• Therefore, we need to:
  • Try to payout as much as possible, to reduce the need to refund.
  • Sort refunds according to age and size, and only issue refunds above some threshold, to be determined together based on an analysis of the money left in the system.

[chadwhitacre]

@mattbk If I make a dashboard page listing pending-application ~users by balance, would you be willing and able to reach out to them personally to encourage them to apply for a payout?

[chadwhitacre]

Matin mentioned a legal term, escheat, which has to do with disposing of unclaimed property, and could be relevant to how we handle the money we're left with on October 10.

[chadwhitacre]

To: Matin

Thanks for the call, Matin. Here's my summary:

#3539 (comment)

Feel free to subscribe to that ticket for updates if you like. I'll email you again once I have data.

[chadwhitacre]

Submitted to HN:

https://news.ycombinator.com/item ?id=10255117

(URL intentionally broken according to HN Referer lore).

Let's get a couple upvotes so it gets some traction?

[chadwhitacre]

We need the money in our Balanced account in order to do the refunds.

We have $28,402.62 in there right now. That's enough for the ~$10,000 in advance fees next week (#3763).

We need to decide how much we need in there for the rest—and how we're going to handle payouts once we don't have enough cash to float the PayPal transfer week to week. We should start moving money on Monday.

[chadwhitacre]

To: Matin

Quick note to say we're behind on the refund lists, and we may not get to the refunds on Balanced at all. I'll keep you posted.

[chadwhitacre]

We should start moving money on Monday.

We didn't start moving money on Monday. Therefore, we only have $28,402.62 in our Balanced account, and it takes 3-5 business days to add money. The most we can refund is $28,402.62, well short of the ~$130,000 we were targeting to refund before tomorrow.