Chained payments and refunds

Question

I have a question regarding chained payments and refunds. We are developing an application that sets up a chained payment, with ourselves as the primary receiver and the provider of the service as the secondary receiver. We provide a mechanism for the secondary receiver to refund the complete payment.

What we want to know is what happens when the secondary receiver has no funds in their paypal account? From testing this in the sandbox and from what we've read, it seems that the secondary receiver component of the refund becomes pending (we assume, as funds are pulled down from an associated bank account). Three things:

1. Has the primary receiver paid the refund in full and is now waiting to get the payment from the secondary receiver. Implying that, at this point in time, the primary receiver is out of pocket?

2. What happens if funds cannot be pulled down from the secondary receivers associated bank account?

3. What happens if we attempt a refund from an unverified user with no funds in their paypal account? Once again, does the primary receiver pay the refund in full and hope to collect the secondary receivers portion when they do have funds?

Answer 1

Extrapolating from the documentation:

1. The primary receiver does not initiate a refund until it receives the secondary receiver's refund.
2. If the funds cannot be pulled down from the secondary receiver's bank account (or the secondary user has no bank account linked) the refund request is cancelled.

The documentation is explicit in saying that it refunds the secondary to the primary before initiating a refund from the primary. Lack of documentation to the contrary suggests they handle the rest of the problems in this situation the same way they handle other refund problems.