Transaction Credits on Refunds Fees - After March 1, 2020, Shopify will no longer return this fee?!

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Tourist
6 0 15

And the 1% bump for all international transactions is not welcome either!

Had an overseas customer cancel a $3K order last week (decided to buy from our Hong Kong dealer who had stock). Under the new Shopify policy such a cancellation would cost me $117.

 

To my knowledge, no other credit card processor has such a policy with regards to non-return of "discount fees."  It is time to rise up and publicly shame Shopify until they relent.  My store is $600K~$800K per year--with about half PayPal and half through Shopify cc payments, so I pay $9K~$12K/year in CC fees to Shopify. That is not small change!

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Tourist
7 0 3

We had been planning to try to move more transactions off of PayPal to Shopify Payments, but now there's no reason to try. Unfortunately it looks like this is the new normal, and you have a few things to consider.

 

1) Raise your prices.

2) Charge a restocking fee, and deduct shipping costs from returns. We had to go this route. 

3) If you have free 2-day or free overnight shipping, give people the option to choose free ground shipping instead. Make sure they know they'll be on the hook for your shipping costs if they do make a return.

4) Renegotiate your shipping rates.

5) Wait as long as you can before capturing payments.

6) Get a time machine and buy SHOP stock.

7) Cut your wages and benefits. Ever wonder why retail and warehouse workers at the bottom never catch a break?

 

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Tourist
9 0 3
No, no, no. This is utter greed and nothing but theft. I’m so sick of it all. What really irks me was the way they made it seem as if I owe them money but they are going to let it slide. Oh, you “discovered” a mistake on EVERYONES account!?!? Am I supposed to thank you for now stealing money from me when a customer changes their mind. This is ridiculous and the final straw. Time to hire someone and build my own website over on Wordpress I guess. I have been thinking of it anyway. Shutting down my store for a ridiculous middle of the month shipping charge that I was giving no warning of was strike one. Strike two was the fact It was shut down on Christmas Eve so I couldn’t even add funds to my account To pay it and I had a Fraudulent chargeback For $500 due on December 26th! My bill wasn’t due for 4 days. Why not charge me then? No store credit feature, no multiple discounts. All things that are common place in a retail business and should be available on an e-commerce platform without paying extra. Shopify has gone the way of the rest, they are now too big for their britches. Big mistake on their part I believe. There are other options. They don’t have the death grip they believe they do. Sad.
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Tourist
7 0 11

I received the same email. We use Shopify in our Brick and mortar (over 95% of our business), and i have been pushing some of our retail friends who would represent 100's of thousands of dollars in processing a year from their legacy POS systems to Shopify because in the past Shopify didn't nickel and dime you, but with them headed down this road I can't recommend it anymore. here was my email response, I will also be calling to voice my displeasure.

 

Good afternoon,

 
      I am very disappointed in this decision by your team. One of the main reasons we chose Shopify payments and the Shopify ecosystem is that I felt that it did not nickel and dime you to death, the elimination of the fee return I believe is a step down that path. Let me explain why if things worked perfectly I would have no problem with this being the case; but with system issues in your POS app this would be an unfair practice:
 
I will preface this with an example and explanation; we have, and a common practice is to have s a 30 day same method of payment return policy. Let's say a customer purchases an item for $24.99 takes it home and tries it on and decides it doesn't fit. They bring that item back and exchange it for the correct size, which is done through the exchange / return button on the POS app. Well this customer then (within the return window) decides that this just isn't the right item for them, so they come back to outright return it. They are still within the 30 day return window for method of payment return, but because there is no payment pass through to the original ticket all I can give them is an exchange credit. I WILL NOT HAVE A HAPPY CUSTOMER. Yes; you can go to the admin, return the item then manually return it on the original ticket to their card, however this is something that is only reserved for our managers and admin to do, not assistant managers and normal employees, it often involves calling a manager and takes time where the customer is sitting there waiting because you are unable to resolve their return in front of them. Because of this, and a way to get around it; our SOP has been to fully return any item that comes back (even on exchanges) then re-ring the order; and because we were refunded the processing fee it was no big deal to do so, and kept our customers happy and our tickets more organized. Now if we do this we will basically be double charged the processing fee because the POS app is unable to provide the service our customers expect. 
 
The next example of this (and it happens often) is that someone forgot or missed putting a discount on a customer's order until after the transaction is complete. Previously it was no big deal, we would simply return everything and re-do the sale with the correct discount because the fees would be refunded. The way it would have to be done in the future would be calling an admin to go and manually recalculate the discount then apply it as a refund for only that amount back to the card, again providing sub par customer service while the customer is waiting. All said, these changes will cost us an additional $2,000 / year, and create a much worse experience for our customers; again if the POS app would allow for easy modifications with issues like this when they arise I wouldn't have a problem with it, bur I feel like this is nickel and diming at the expense of quality service when we are already paying over $40,000 / year in processing fees with you. To say I am disappointed doesn't begin to describe my feelings.
 
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New Member
1 0 5

Jumping in here. I completely agree. This is insane.  Very unhappy and sent email to customer support at Shopify.  She explained how much it hypothetically would have cost me in 2019.  It more than triples my Shopify cost overnight.  We have an expensive product and 30% returns which is normal/low for my niche.  

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Tourist
6 0 15

It is time to start posting elsewhere about this so that they are shamed into reconsidering this terrible policy.  I just made a post on one of their Facebook pages. 

We have to make a LOT of noise about this or we will just be ignored.

I recall that there is a web site that follows news and does comparisons regarding  e-commerce platforms. We should look for that and find someone there to write a story about this.

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Tourist
4 0 1

Has anyone looked into alternate processors?  Part of the draw of Shopify Plus was the processing.  Now that they are stealing the commissions when we give 100% refund to the customer, we will be forced to leave.  With AOV at $500, we can't lose that money for absolutely nothing. 

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Explorer
52 0 18

I suggest everyone complain to the Federal Trade Commission. That's what I did. The fact that PayPal and Shopify both tried to do this at the same time, is ridiculous. I've heard a rumor that Stripe will start as well. Also... Their excuse of claiming that they themselves have to still incur fees on refunds, is false. Go look at the documentation that Visa and Mastercard provide. It states that interchange fees are in fact returned to processors on refunds. Even if their WAS a fee (there isn't), a company valued at over 50 billion dollars telling their customers they should suck it up and cover this, is a joke. I haven't called yet, but I told a "guru" that if this goes through, I will be changing hosts. Of course, all I got in return is placating nonsense, and a sales pitch for an app. What a shock. Hilariously it was an app for creating refund disclaimers. That was her big support she offered. Obviously the people they get to do support know nothing, otherwise they'd realize a disclaimer is meaningless, because the person will just do a charge-back and win it (like they almost always do no matter what). Apparently they've decided they'd rather have a constant rotation of failures to milk money from, then actually support successful businesses.

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Tourist
6 0 15

@dpd1: Where did you read that PayPal was also going to stop refunding fees when refunds are made?!  That would be earth-shattering and really f-ed-up!

 

Also, does anyone know if Shopify's new policy--set to begin March 1--applies to refunds on orders placed before March 1? Or is it only with regards to orders that get PLACED on or after March 1st?

I just finished shipping a several waves of orders of a new product ($640 per and we shipped almost 500 in the last 40 days) with a 30-day money-back guarantee, so I'd like to have some idea of our exposure to this new policy. I suppose I'll find out soon enough if someone who bought in February asks for a refund in March. 

 

I can't believe that this new robbery policy has not gotten any publicity on web sites which discuss e-commerce providers/engines.  I sent notice of it to a couple of sites a month ago, but crickets... :-( 

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Tourist
3 0 13

@Superdad wrote:

@dpd1: Where did you read that PayPal was also going to stop refunding fees when refunds are made?!  That would be earth-shattering and really f-ed-up!

@Superdad PayPal stopped refunding transaction fees in March 2019. Unfortunately, it doesn't appear Shopify is going to budge on this. After I wade through all the BS, they admit that this is basically the industry trend for payment processors and they want their piece of the pie.

 

Shopify continues to claim that some customer banks will refund the transaction fees. But Shopify will not automatically refund them. They said that we have to call each customer and obtain the issuing bank's contact information. Then we have to contact the bank and request a refund of the transactions fees. Only then will Shopify refund those fees.

 

I told the customer rep that I would have to hire a whole new office of people to deal with that type of (ridiculous) work. This is what it is folks. Shopify saw that PayPal kept these fees and didn't suffer for it, so they are going for it as well. The problem is, there isn't very many good options to switch over to- and Shopify knows it.

 

It's a shame and a huge knock on Shopify's image of being the business that empowers small business. Not the case anymore.

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