Do shop owners have to pay credit card processing and currency conversion fees for refunded orders?

A_L1
Shopify Partner
57 0 3

Do shop owners have to pay credit card processing and currency conversion fees for refunded orders?

 

If so, that came as a shock to me.  A customer had purchased a high value item but I had to process a refund to him immediately to make a change to the order.  A few weeks on, I see Shopify has charged my bank account a ShopPay credit card processing and currency conversion fee.  That hurt! 

Replies 9 (9)
A_L1
Shopify Partner
57 0 3

Long story short, Shopify says they do not refund 'Shopify Payments fee and Currency Conversion fee' on refunded orders, regardless if purchase was a mistake by the customer and refund processed within minutes.

 

 

This was regarding a refund I processed for a customer on October 18th. My customer wanted to use ShopPay 'installments' to purchase. However, he accidentally paid using ShopPay 'without installments'. As a result, I processed a full refund for the customer within minutes. Unfortunately, today $355.45 was withdrawn from my bank for Shopify Payments fee and Currency Conversion Fee.  The customer made the mistake. As a seller, I feel I shouldn't have to pay the fees but Shopify says I need to foot the bill.   I think that is ridiculous as the refund was processed within minutes.  I'm sure there are times when a customer purchases an incorrect item, enters a wrong quantity or involved with an unintended transaction (perhaps a kid pressed BUY). Do store owners have to foot the Payment Fee & Currency Conversion fee for refunds in such cases also?  If it was a small amount, I would let it slip but when you're selling higher value items, these fees are no joke.

 

I was wondering if any of you have been in a similar situation and was able to get the fee refunded by Shopify?  Any advice?  I reached out to Shopify support but the person just sends me an image 'Credit card transaction fees aren't returned to you when you issue a refund'.  Please advice me the steps (if any) I need to take to get this fee refunded back to me.  My customer still intends to make the item purchase.  I'm not paying Shopify twice for fees to sell the same item to a customer.  I would rather list the item on a platform like Etsy and sell it there if so.  Thank you.

 

38788-42707-30197-13700-42712

 

 

 

A_L1
Shopify Partner
57 0 3

Update:  Does Shopify work with different rules regarding refunds and payment processing fees?  Upon further investigation into my sales, I realized on 11 August 2022, I had to process a refund to a customer within hours due to changes required on listing price/taxes.  On that refund, I wasn't charged any payment processing fees.  It wasn't 'ShopPay' payment however.  Is this payment processing fee not refundable only when ShopPay is used?  I have disabled ShopPay from my website today as it seems payment processing fees aren't refunded only when ShopPay is used.

Sophia
Shopify Staff
Shopify Staff
1610 106 206

Thank you for sharing your experience and feedback about Shopify Payments. I understand that the transaction fees can be especially impactful with high value orders.

 

Policies will vary between payment providers. Some charge a fee to process a refund in addition to the standard transaction fees. Costs are incurred to process refunds, so Shopify Payments does not reimburse the original transaction fees when a refund is processed. However, no additional fee is charged to process a refund. This is covered in the Shopify Payments Terms of Service (section C5, D5, and D6).

 

To clarify, this isn't specific only to Shop Pay, but Shopify Payments as a whole.

Sophia | Social Care @ Shopify 
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A_L1
Shopify Partner
57 0 3

Hi Sophia,

       Thank you for your reply.  You mention it isn't specific to ShopPay.  Please can you tell me exactly why I wasn't charged a payment processing fee for my order refund on 11th August 2022 but I was charged a payment processing fee for my order refund on 18th October?  The only difference between the two orders is that for my 18th October order, my customer used ShopPay, while for 11th August 2022, it was not ShopPay as I had not activated ShopPay back then.  I would think there would be more advantages for sellers using Shopify's ShopPay payment processing system.  It seems like that is not the case.  I have disabled ShopPay from my store entirely because of this experience.  Even a platform like Etsy does not charge me payment processing fees for refunds. My order refund was for a change I had to make for the customer who still has the intention of buying the item.  I will just have to list my item on Etsy or elsewhere as I refuse to pay double fee totaling $700+ just to process a payment for an item.

Sophia
Shopify Staff
Shopify Staff
1610 106 206

All credit card transactions would incur a processing fee that is not reimbursed once a refund is processed. Was the refund on August 11th processed with Shopify Payments, or with a third-party payment provider? 

 

I'm wondering if the October 18th transaction included a currency conversion fee. I'm not able to access your admin from this public space, but if you contact our team again via the Shopify Help Center, we can review the order timelines and payouts with you to clarify exactly which charges applied and why.

Sophia | Social Care @ Shopify 
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Ray32
Excursionist
10 0 8

So, my question to this is, how can we as shop owners push the credit card transaction fee onto the customer? I feel this would absolve the whole issue. Increasing the price of an item to "cover" it does not necessarily negate the fee, it only lessens the blow. That, or what is the legality of including a statement in my refunds/return policy regarding credit card fee transaction fees withholdings in the event of refunds? For example, the customer gets a refund minus the transaction fee I am to pay. Where I find this getting even worse is with charge backs..

Sophia
Shopify Staff
Shopify Staff
1610 106 206

@Ray32 wrote:

So, my question to this is, how can we as shop owners push the credit card transaction fee onto the customer? I feel this would absolve the whole issue. Increasing the price of an item to "cover" it does not necessarily negate the fee, it only lessens the blow. That, or what is the legality of including a statement in my refunds/return policy regarding credit card fee transaction fees withholdings in the event of refunds? For example, the customer gets a refund minus the transaction fee I am to pay. Where I find this getting even worse is with charge backs..


Hi, @Ray32.

 

Thank you for sharing this suggestion. I'm not sure whether it is possible to transfer the transaction fees to the customer at checkout, but I am happy to submit a feature request to our developers on your behalf.

 

I can't offer legal advice, so you might benefit from seeking legal consultation in your area to determine whether your business is allowed to withhold the transaction fees in the event of refunds. Depending on where you're located, your government might also have this information on their website.

Sophia | Social Care @ Shopify 
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Ray32
Excursionist
10 0 8

Hey, @Sophia 

 

Thank you for responding! Yes, absolutely, please push this request onto the developers. Myself and so many other shop owners are looking to have this feature implemented. From my research there are only 4 states that haven't made this completely legal (not legal advice).

 

Understood on the additional legal question I had.

Sophia
Shopify Staff
Shopify Staff
1610 106 206

Thanks for following up, @Ray32! I just wanted to confirm that the feature request has been submitted.

Sophia | Social Care @ Shopify 
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