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If Etsy charges you a fee that cannot be covered by your store's balance, they will recoup the difference by charging it to your credit or debit card.
Your store's balance will be increased by the recoup amount that Etsy takes from your credit card. This means that even though a recoup is paid to cover a fee, it will appear as income for your store and increase the value of the next disbursement you receive.
But the amount of the income increase in your bank account will be exactly offset by the amount of the expense that was charged to your credit card.
To reconcile the charge to your credit card, Open Payout will create a recoup payout which will show up in Accounts Payable in Xero or QuickBooks. You can then reconcile the recoup amount against your credit card expense in the same way that you would reconcile a disbursement to the bank deposit you receive.
We recommend creating a separate Xero or QuickBooks account for recoup line items. Your recoup account will always net to zero because the recoup amount charged to your credit card will always match the recoup total added to your disbursements