Stripe Connect refunds can silently drain platform revenue due to two default flags

When Stripe Connect platforms issue refunds, two boolean flags — refund_application_fee and reverse_transfer — determine whether the application fee and the fund transfer to the connected account are also reversed. Both flags default to false, meaning a standard refund only credits the customer while the platform's fee and transferred funds remain unrecovered. This silent discrepancy never triggers an error in Stripe's logs, surfacing only as a mismatch between the amount refunded and what actually returns to the platform's balance. Platforms can audit this exposure using a read-only Stripe API token to compare expected versus actual balance changes across past refunds. Setting both flags to true during a refund is the recommended fix to ensure a net-zero outcome for the platform.