@mgarland : I just checked our account, and PayPal was refunding fees to us on customer refunds right up to October 10th, 2019. Then on October 11th we did a refund an no fee was returned to us--and it has been that way ever since. Really sucks. Guess I did not realize how much money we have been loosing (about $20 per for our typical product).
We offer tours of our animal sanctuary. We were having an unreasonable # of "no shows" so began requiring people to pay in advance and the largest % of our Shopify transactions are for visitors to pre-pay their tour reservations. We do occasionally have to cancel tours (our decision: weather, animal emergency) but we also have people pre-pay before checking that we have a tour they can join (their fault because they don't read the instructions) and they also must be refunded.
However, IF, as Shopify claims, they need to "keep" the transactions fees to cover THEIR cost, then why would it not be a FIXED charge, since it is the SAME amount of work to issue a refund regardless of the amount? As others have pointed out, Shopify is not incurring any actual expense from their credit gateway but are justifying the charge to "cover the cost of issuing the refund" (despite the fact that I am certain it is completely automated). Regardless, whether the charge is $50 or $5,000, the "work" is exactly the same so why should the "charge" be based on a % of the transaction cost? If they feel they still need to make money on these transactions (above the subscriptions fees we already pay and the transaction charges), it should be a FIXED amount, or perhaps a tiered-amount. (like $1 for charge <$100, $5 for charges <$1,000, etc.) There is absolutely no reason that a merchant selling high-priced items should be "penalized" for that by charging a % of the total amount refunded.
I recently had PayPal make an error on THEIR end and then try to charge us the transaction fees when it was reversed and I contacted customer support and was able to get the fees refunded. My argument was that I did not ask for or initiate the payment, (which we did not- it was made when FOUR of PayPal's customers claimed they were "hacked") why should I be held liable? I also pointed out that if "they" are not responsible when "their system" is hacked, then that means that I have liability for an "unlimited" amount of money. What if we received an unsolicited $10,000 donation, but then someone claimed they were hacked and ask for a refund? Why should we be liable for that? If fact, there would be NO WAY for us to protect ourselves from such a risk. I temporarily removed PayPal as a payment option in our store. Granted, we generate minimal amounts of fees for PayPal (so our leaving would hardly be a big loss) but they still agreed with my logic and refunded the fees (which were over $500 because it included currency exchange fees WAY above market rate!).
Perhaps we can't convince Shopify to allow no-penalty refunds but the amount should be nominal, not obscene.
So this is my first store and I did all the testing in test mode for the purchasing of products and running credit cards through.
However, I wanted to actually do it under real circumstances. So I went to my store and placed an order, purchased the product with my own personal credit card. I saw that everything went through. I then placed a refund.
And low and behold I see that I get charged for a transaction fee. This is my first store and it hasnt earned anything yet. And Im getting charged a fee for a refund?!?!?!
So now every time I refund an order, doing the right thing for my customers, I get charged.
Shopify - wheres the customer service for your customers on this one? Why arent you guys doing the right thing for your customers? Customers being myself and all the others that posted here on this forum.
Please contact me on what you are doing to rectify this absurd issue.
With the pandemic happening right now, you would think that Shopify would temporarily waive the return fees - guess not. I'm fine with them keeping the $.30 transaction fee, but that's it. It's rich how they write blog articles about how online stores should have a flexible return policy, and then they do this.
I'm jumping in here to agree that this is not acceptable policy!
Especially at this time - Covid-19 health crisis with so many cancellations and refunds that are beyond our control. We are a small nonprofit and are loosing a lot of funds through all sources, and now this!! We were contacted by one of our supporters about this situation and he said this is very against best practice in the overall field of credit processing.
NOT COOL, SHOPIFY! At least for the current national emergency, you should reinstate the previous policy and return the processing fee for refunds.
We changed to Authorize.net and BAMS for the processor. They DO give the merchant back the processing fees. I highly recommend changing ASAP. My rep there is Ashley, and she was available personally 24/7 through the process, and got us changed over before the deadline. Ashleym@bams.com if anyone is interested.