How many people are paying this? Please respond to this. I continually ask Shopify why this is being charged and don't understand it anymore. We have been with Shopify for probably 5 years. Even if we refund orders we still get charged 2% of that transaction which I find myself find rather odd. Why are we losing money every single month on orders that are canceled? This is costing us a good deal of money. When I contacted PayPal, I was told they have no idea why it is being charged. Thanks for your responses in advance.
Thank you for posting! I hope your day is going well. As of March 2020 in the United States, and January 2021 for remaining countries, Shopify Payments no longer issues a refund of the processing fees incurred on the original charge. Our financial team emailed affected merchants when this change was implemented.
I understand this is frustrating, however, Shopify Payments incurs costs to process refunds. Because of this, we can no longer pay merchants back their original processing fee. That being said, unlike our competitors, we do not charge payment processing on the refund itself, only on the original charge. For your convenience, here is a link to Shopify Payments Terms of Service.
As I understand this impacts your business, I will be submitting this feedback on your behalf to our financial team to review.
In the meantime, if you can provide more context on what your most common reason for a refund is, I can provide some guidance on how you can decrease your refunds moving forward.
It's simple a customer places a order and either constantly changes their mind on the qty or the order and reaches out for us to cancel it. Are you supposed to deny them?
Shopify and Paypal both do this now and it's starting to really bother me, too. I don't get a lot of refunds but the more my Google ads perform, the more my sales revenue increases and the bigger my customer-based grows.... which means also more refunds.
IMO, it's purely a cash grab by Shopify and Paypal. A couple weeks ago I had a customer change their mind immediately after placing the order and request a refund. I believe in good customer service, so I refunded their order. The refund was literally within 5 minutes of the order being placed, and I still had to pay the fees on it. The very least Shopify can do is give us something like a 12 or 24 hour grace period where we can get the fees refunded for situations like this.
I got another one this morning, this time from an Australian customer and I'm in the USA. So that one includes the currency conversion fee that ain't gonna be refunded. 😕 I love Shopify but this really irritates the crap out of me.
Does anybody know of other payment gateways we can use in our Shopify stores that does refund the fees when the order is refunded?
This is outrageous. I just moved our store to Shopify after being with Magento for many years, thinking it would be a smoother easier system. And it was, up until I refunded a $1700 transaction and still got charged over $40 in fees by Shopify! I thought it was an error until I did some digging and found page after page of people complaining about this practice from Shopify which is just immoral. I can't believe it's possible that Shopify don't care enough about their merchants to refund them the fee, the way every other payment gateway I have ever used do. Shopify seem very stubborn as a company, so I don't see this policy changing, but I will certainly be looking for better options for my business.
Thank you for joining the conversation and providing your feedback.
I definitely appreciate it is frustrating to learn that your processing fees are not returned when you issue a refund. This is in line with the majority of major payment gateways who also do not return refunds. That being said, most gateways actually charge an additional fee, which Shopify does not.
The reason why fees are not returned is Shopify Payments incurs costs to process refunds. Because of this, we can no longer pay merchants back their original processing fee. This is consistent with our existing Terms of Service (5.10).
You said other merchants don't refund processing fees, and I've talked to most of them. Give us all the other merchant names who don't return processing fees so that we can ask them ourselves. Because PayPal isn't keeping those fees. When I emailed I was told they keep those fees for "back end maintenance". I spoke to numerous people who do IT and server maintenance who said that is insanity. That if something legal caused Shopify to produce documentations of actual costs, they wouldn't come close to what they are actually taken. Once an order is refunded, there is LEGALLY no profit from the sale to be able to tack processing fees to. I do believe that a number of people will get involved in this legally at some point. Like the person above mentioned "class action". Just because something is in the TOS, doesn't make it legally or ethically right. Sorry
And I am going to add this. One problem a number of people who have who won't address it on here for fear of their accounts, but believe me there are hundreds of people talking about it, is that a LOT of them, myself included, came over from other platforms because of Shopify email marketing YEARS ago. We spent thousands transferring our stores just so Shopify could even keep 2% on refunded orders. What's odd to me is they don't feel the need to charge it as long as you are using THEIR payment gateway. We already pay the now $39 a month.
I absolutely appreciate how frustrating it is to lose those fees when an order is refunded. Every penny counts especially in today's economy.
As you asked for the list of gateways that do not refund the processing fees, here is a few, but not all. Keep in mind, PayPal also keeps the seller's fees when you issue a refund. For your convenience, I have linked their documentation regarding the fees.
I just chatted with Shopify support about this. I had a client place a large order on 6/4 and then on 6/5 she went back to the website and the items were still in her cart. So this made her think the order did not go through so she ordered a second time. She contacted me later that day and told me what happened and asked if she had actually ordered twice, and she had. Now I normally will take the fees from the customers end as this is one of our shop policies if you pay using Shopify Pay. But this was not the fault of my client but instead a glitch in the Shopify system. During the chat the agent admitted twice it was their fault (see screen shot) but they still would not refund me. There should be some sort of exception here. If the order was triggered by a system glitch that is not my fault or my customers why should we be responsible for the fees incurred. I can see a Class Action Lawsuit here. I mean Shopify can cause thousands of glitches in a day and make a fee from each one. Sounds super shady.
This situation is definitely upsetting. I have actually done this myself as a shopper!
Based on the screenshot above, the advisor is stating that it's not your fault, but I do not see them assign blame to Shopify. The reason why the advisor wouldn't be able to take fault is because the cart is handled completely by the theme, not the checkout.
The theme can use cart issues such as this for a variety of reasons. However, the most common issue is the customer is logged into their store account from multiple devices and their cart is saved. While they check out on one device, the cart is maintained on the other. Another potential cause is the browser cache causing errors. Lastly, if you're using a third party theme, or a theme that is heavily customized, it could have issues within the cart code. Only a Shopify specialized developer would be able to investigate a situation like this, not an advisor.
If you have a Shopify developed theme that does not have any major customizations, you can absolutely reach back out and one of our theme developers can investigate. Keep in mind, any theme that costs money in the Shopify Theme Store is a third party developed theme. Thus, you would need to reach out to that theme's developer.
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