A Refund is Pending ? Shopify Payments

[DMold]

Hi all,

Ever since 21st January, every Refund which we process on our Shopify Site (using Shopify Payments) goes to 'A Refund is Pending' and then the refund is actually processed 24 hours later. This never used to happen and we have more than enough balance to process the refund. 

This does not happen with Paypal payments (which process instantly) and before 21st January the Shopify  refunds would have also processed instantly. 

I have attempted to contact Shopify support but they only point to their Shopify Payment policy which states that the refund will process within x working days. 

This is baffling as to why this has only started to happen since this date but it is happening to EVERY Shopify Payments refund. Has anyone else seen this and if so have you found any solutions to this? (We have an integration that is expecting the refund to be automatic at the point that it is refunded).

[Blair · Accepted solution]

Hi @DMold,

Thank you for reaching out to the Community. I'm happy to provide some assistance with processing refunds, to ensure this gets resolved.

To share some insight, it is expected behaviour for refunds that are processed through Shopify Payments to sit in a pending state. This state indicates that the refund is in the normal processing hold, which takes roughly 2 business days to be completed. For more information on refunds with Shopify Payments, you can check out our FAQ Page for those details. 

While this processing hold cannot be modified, I'm more than happy to share this feedback with our Developers. We are always looking for ways to improve the platform and appreciate the information that you've shared. 

In the case a refund has remained in a pending state for more than 2 business days, please feel free to Contact Support for further investigation. This will allow our advisor team to take a closer look and ensure it gets resolved. 

Please let me know if you have any other concerns. 

[DMold]

Thanks Blair. I appreciate that this is what the policy states in terms of refunds going in to Pending. However, this has only just started happening since 21st Jan and it is happening for every Shopify Payment refund but not Paypal refunds. We have been a Shopify customer for over 2 years and historically this was never the case - Whenever a refund was processed, it refunded the customer immediately.  Whilst Shopify Refund policy states that it takes 2 days and therefore it is within your policy, something has clearly changed since mid-January which has now forced all refunds to go to a Pending state for 24 hours, when this never happened previously. It seems like this has affected multiple customers, not just us and it is causing us a number of integration issues because of this change.

[ErinK]

I noticed this change recently too, and it's absolutely wild to me! We are in a similar boat as you, and use a 3rd party app to process returns, so now we'll need to update all our info and ToS to inform customers that even though it says their return was processed, they'll need to wait an additional 24-48 hours for their actual refund email notification to go through??

I reached out to Shopify about this, and they essentially said the same thing as Blair above. Blair, the issue here is NOT that the payments are pending for 1-2 days, we understand that this is normal for refunds being issued, the issue is that Shopify payments have stopped sending the notifications right away, which is terrible for how most of our stores operate.

My company has been with Shopify for ~6 years, and these aggravating little changes chip away at my sanity more and more every day. 😂 I seriously cannot remember the last time something was changed on Shopify that was beneficial for quality of life, as it always seems to be reversing it.

[Shaunt]

This new delay is not good. They are probably doing it to hold onto cash longer so they can use it themselves!!!

[simcha_jacobowi]

I am experiencing the same issue and it is a disaster for customer service. A customer return was delivered yesterday. The customer knows it was delivered via tracking. We inspected it and issued the refund. The customer received no email and asked us where his refund is. We checked and found that it is pending for 24 hours. Ridiculous. Why not send an email to the customer letting him know the refund has been issued and is processing? 

[ChrisB2]

This reccent change without notice also affects ERP intergations. 

for example under the old method, the return /restock together with the refund would be POSTED to the ERP system or accounting system in a SINGLE transaction. now it creates 2 entries due to the time delay, first a transaction for the Return/Restock, then a 2nd tranaction just for the REFUND a few days later. 

Unfortunately for us, the ERP system and accounting software is not smart enough to know they are linked and instead created 2 entries as follows: 

Return for $100 (with $100 to be paid out / owing to the customer) 

then 

Refund to customer for $100

becuase of this new change all refunds in SHOPIFY need to also be manually linked in ERP systems. which is a total nightmare for large volume stores. 

please urgently change back, this new change is not sustainable for anyone who links SHOPIFY with an ERP or accounting software. 

[uniformity]

We have a similar issue when trying to reconcile refunds in our ERP. Again, this hit us in early Feb, without warning. The refunds are coming across 2 days later, the dates are not aligned in our ERP, and we have to revisit previous daily reconciliations. It's incredible that Shopify rolls out these platform updates without understanding ERP platforms and how basic accounting/reconciliations are processed. I have tried contacting Shopify, but they will only do it over Chat, which is incredibly frustrating!
We are now looking at changing our Ecomm platform as a result of this.

Blair quoting a policy change is not an accepted solution!

[LuAnn_Caprio]

Actually, this information is not helpful in that it does not explain the rationale for this change outside of it benefiting Shopify as you are now able to hold on to the funds for a few more days. Shopify is leaving merchants very open to a chargeback being processed while a refund is "pending" as the sale continues to show as paid and does not have a zero balance on the order immediately, as it used to and should still be. Example, shopify payments processed a payment with zero risk factors which we fulfilled. The cardholder contacted us stating that his card was compromised and he did not make the purchase. The order was $1250.00. We refunded him but he also notified his credit card carrier who in turn will reverse the payment. We are holding our breath because if the chargeback processes before Shopify decides to process the refund we made, we will have a "double" refund causing us a lot of grief. We probably should have waited for the chargeback, rather than refunded but did not want to ding our chargeback ratio. Very poor customer service, Shopify. For the amount of money you are making keeping the funds a few extra days from all your customers, you are causing a bitter taste in our mouths.

[DMold]

Dear Blair, I am unsure why this has been marked as a solution?  The answer you have given is not a solution. This is a change that has been introduced with no warning and you can clearly see from all of the other frustrated customers that this is an issue that Shopify have suddenly introduced and nobody appears to have been informed on it.  Do Shopify plan to do anything about this or just ignore the impact that this has had to customers ?

[Chimevault]

How is that a solution..??

Cant print refunds on invoice now because they're pending.

Why was this introduced now..??

[Pat_Troy1]

maybe share with the developers that the sytem was working fine until 21st of Jan when they changed it.

[volley44]

Is Shopify going to fix the refund 2 day delay?  I'm seriously upset about this change also and it' causing lots of unncessary grief with customers whom are threatening to leave bad reviews and charge back because Shopify is holding their money unnecessarily before initiating their refund request.  I no longer recommend Shopify to my friends due to this change..  

[BabysitterMM]

We've been using shopify for a few years now and there has never been a 'refund is pending' message ... until now and it is VERY annoying.

[Gary_the_Man]

We have the same issue all of a sudden. This is absolutely ridiculous. I am fuming. Customers want to see their refund and know about it and get an email right away stating the bank is processing the refund. Now they get nothing and who knows when they get it. There will be a lot of disputes made in this waiting time. CHANGE IT BACK IMMEIDATELY!! I AM SO ANGRY YOU PULL THIS CRAP

[Shaunt]

Agreed, this new delay is not good. They are probably doing it to hold onto cash longer so they can use it themselves!!!

[tallrob007]

This is a disastrous change by Shopify and I can't see who it benefits (except perhaps Shopify Inc. by  holding onto our customers' money for another 48 hours). 

Refunds are a fundamental part of e-commerce. Prompt and accurate processing of them is vital to keep on top of Order management, keep our financial reconciliations accurate, and maintain customer confidence in the refund process. I predict we will now have to deal with lots of customer phone calls, asking if their refund has been processed and when they can expect the funds to arrive. How many wasted hours of our time is that going to amount to?

Also, unless I'm mistaken, the Order page shows no indication whether or not a refund is "pending", this only appears as a single entry in the Timeline, so it's quite difficult when scanning through a list of orders to see whether an order has been refunded or not, which is a massive area for confusion. (I'm guessing that page will be updated when the refund is finally processed, but that's going to be at least 2 days later!)

I just can't understand why Shopify pushes through systemic changes like this without talking to their client base. Did they think we wouldn't notice? It really smacks of an arrogant attitude to the people (us) who use their system and dutifully pay their fees without question. If PayPal can refund instantly, why has Shopify Payments decided it can't do the same?

Anyway it's imperative they put this back the way it was, and as soon as possible! I don't have time to be re-visiting all my refunds 48 hours later to make sure everything went through OK.

Please everyone bombard the Support lines / Chat / Community with complaints about this. It's the only way we have any chance of getting this idiotic decision reversed. 

Since we started using Shopify, I've noticed the Community is full of great ideas that people have asked to be implemented, which would streamline their workflow and make the system better for all users. Many of them get requested for years, but sadly, virtually none of them ever seem to get implemented. This is the first time (to my knowledge) that Shopify have actually removed something that worked pretty well and was actually helpful to the retailer. It really does feel like a backward step.

[ErinK]

Every good suggestion over the past however many years has essentially been met with "Great suggestion! We both know that we won't be implementing this vital change, so here's an app you can pay to do this necessary for you." I wouldn't be surprised if "immediate refund notification emails" became a separate/paid app. 🙄

[ErinK]

Since posts can't be edited, I've returned to add my frustrations once more. It's baffling to me that Shopify has not planned a fix for this as of yet (most of us don't care if the refund is pending, we just want the customers to be notified of the pending refund). Nothing has made me internally scream more at work lately than by customers thinking that we're the ones holding onto the money longer, when this is literally out of our hands. 😂

Customers don't understand that we aren't running our shops from scratch, so Shopify really needs to make things easier on their users, this is ridiculous. If there is any sort of issue with a customer's purchase, it's hilarious to need to add at the end "you've been refunded, but please understand that you won't receive a refund notification for up to 48 hours." ???

[umiajhu]

I'm seeing this now too, and it is frustrating and there was no communication from Shopify.

Reading about the ERP Integration issues from @ChrisB2 , I'm now wondering how this will also affect Sales Tax reporting as it pertains to month end. So now I will need to figure out whether the the sales tax will appear in the reporting as refunded when I hit refund (since the dollar amt in the Orders now shows as $0), or whether it will show in the reports once it's actually refunded after the delay.

This may also affect those who use accounting systems such as A2X.

@Blair  - Is this being looked at to be reverted? And why was this not communicated to us?

At least have the refund e-mail trigger once the refund is processed. But for those with accounting systems, this is a much larger issue that needs to be quickly addressed.

[SmeadDev]

Ditto with our store. We just started noticing this over the last couple of weeks. Something had to have changed on Shopify's side....

[volley44]

Not only is this leading to negative customer experiences, it's leading to charge backs.. Hoping Shopify will reverse this Jan 2023 change of not processing refunds until 2 days.  This pending state extra delay for 2 days is unacceptable.

[Don9]

This change in Shopify's procedure has also destroyed our reconciliation system for payments.

Is there an available report that shows "pending" refunds?

[Pat_Troy1]

Its a backward step. Our customers can see that their return has been collected from their shipment tracking but we apparently havent actioned a refund, when we have. SO now I am sending a separate email when i initiate the refund. Used to be immediately automated. Sadly shopify support says "maybe use an integrated app to notify customers" !!!!!! Yes. that app used to be called shopify. Support says it is to do with the payout balance.... since when??? There was no problem before. for last 5 years.  Upset customers. Upset Shop owner

[minovor]

very frustrated situation for big store and we have made a loss of 50k due to chargeback we got because of this delay customer think store is lying and open chargeback and refund issue and cb come we are really made for this