I had a customer order almost $6,000 in product and then emailed and cancelled the order. I was billed today for over $150 from Shopify because they won't refund the credit card processing charge. Is this correct? If so, how do I migrate all my websites from Shopify to another platform that doesn't extract unnecessary charges like this?
Hey @waterglider99 ,
This is correct, yes. They do not refund the credit card processing charge.
They facilitate the transaction to go through, do fraud prevention, ensure that the transaction is secure (i.e. your customer's credit card info is safe), and also have developers working around the clock to make sure that your customers can order from your store 24/7 - these employees need to be paid.
Other platforms won't be different since whoever your payment processor is will always take a % of every transaction and will not refund it if your customer makes a return.
Shopify and card processing merchants are taking advantage of refund situations. While the vendor pays 100% back to the customer, Shopify and card merchants keep the initial transaction fee. For large orders, the amount is significant. For example, Leviosa sells motorized shades and home automation systems where our average transaction is $3000+. For order cancellations, the fee we still must pay is~$90. This is patently unfair, but Shopify and card merchants are not motivated to change it. This money-grab is new from 2019.
However, Shopify vendors have recourse: promote payment by check. As an example, Leviosa now promotes 2% additional discount to customers who pay by check. Customers are more encouraged to buy with the extra discount, which does not cost Leviosa anything as we avoid paying Shopify and merchants at all. In fact, Leviosa actually makes a few extra dollars. Sure, many customers still want to pay by credit card, but 15%+ are choosing to pay by check, cutting Shopify out of the payment process, and minimizing some refund fee risk. Check processing happens instantly as customers email us pictures of check front and back, which are then transferred electronically to our bank via common check deposit Apps nearly every bank now offers. No snail mail - Easy, and quick. We estimate Shopify and card merchants stand to lose $15,000 in fees alone from Leviosa this year - against refund fee charges of $1000. Small peanuts to them, but when other Shopify vendors promote similar systems, maybe they will see their short-sighted venture. And while they should revert back to a more fair refund fee policy anyway - we will continue promoting check acceptance - our customers love discounts! A shame Shopify vendors have to plot to cut Shopify and card merchants out of the process - but their greed has unintended (and unprofitable) ramifications.
Update: We significantly UNDER estimated customers' positive response to paying via check. We measure 60% transactions completed via check over past 5 months. Customers love discounts, and understand they save when not paying bloated credit card vendor fees. Win-win for everyone (well, except Shopify and credit card processors). During covid-19 with more people directing entertainment budgets to home improvements - such as the motorized window shades Leviosa sells - business is booming, and selling fees are shrinking. Should have done this years ago.
Very simple: Customer takes a picture of their completed check and emails it to you - both front and back side. We screenshot the image from the email and directly deposit to our bank account via their App (such as BBT or other). Takes 1 minute or less. No stamps. No US mail, No delay. Best of all - no transaction fees. You do not need a third party App other than your normal bank App - and nearly all major banks now accept check images for deposits.
> They facilitate the transaction to go through, do fraud prevention, ensure that the transaction is secure
> (i.e. your customer's credit card info is safe), and also have developers working around the clock to make
> sure that your customers can order from your store 24/7 - these employees need to be paid.
And they get paid for this with monthly fees as well as cc fees on ALL non-canceled transactions. Charging fees on Canceled, refunded orders is just a robbery. Credit cards pay them back and they just keep it together with their margin. This is so flawed and should be illegal. Any merchant's competitor could in theory start making large orders and canceling them.