A customer filed a case with their credit card company after I already shipped the item out. Shopify deducted the amount for the item from my account, and in addition to that charged me a $15 fee. I already lost out on the item. Why on earth am I being charged this massive fee on top of it?! No other ecommerce platform has ever done this to me. Why is it fifteen dollars??
My name is Emma and I am one of the Support Gurus here at Shopify :)
Chargebacks are never fun cases for a merchant and I certainly understand where you are coming from.
The fee is an administration fee that gets issued back to you should you win the chargeback. Here is a guide that explains the whole Chargeback process as well as the fees involved: https://docs.shopify.com/manual/more/shopify-payments/fraud-prevention#chargeback-fee
The credit card company is not going to let me win the case. They never do. If the buyer's card was "stolen" and the charge was fraudulent, I'm going to be penalized by the credit card company regardless.
My question is WHY am I also being penalized by Shopify on top of that? There is no logic behind it.
I would be happy to provide an explanation for the administrative fee.
The credit card issuer requires that the funds be held on their end while we go through the chargeback process. Shopify must comply with this, and debit for those funds. Shopify gets charged by Stripe (our payment processing partners) when there is a chargeback. Since it is the merchant’s responsibility when fulfilling orders, the fee is passed on to them. If you win the chargeback you will be refunded the $15 fee however, it is not otherwise refundable.
Hope this clarifies things for you!
Shopify is way out of the industry norm on this. I had someone order a book and it was delivered. I have proof of delivery from the post office. Shopify has a fully automated system that they use for chargebacks and effectively they don't get involved. As a result I lost the case and was charge their punitive $15 penalty fee. Their support in this area is comical, the support agents have no clue what they are talking about and their responses don't make any sense and are contradictory.
I also sell through eBay, Amazon and another website run through Bigcommerce where I use paypal as my merchant processor. In all instances if you have proof of delivery you always win a dispute when the customer says they haven't received an item. Shopify believes they are best in class with their payments platform but they are way out of synch with the rest of the industry.
This is something they need to fix and not give cute responses to on their forum or when you ask for help.