Refund: How does Shopify Payments handle refunds?

internatmacshop
Excursionist
13 0 5

Hi, so we unfortunately have to issue a refund to one of our customers as the product delivered was faulty. She paid using her VISA through the Shopify Payments gateway.

So, I've done some research about refunds for Shopify Payments and this was what was stated: Screenshot 2021-03-17 at 2.22.01 PM.png

I don't understand what they mean by "the amount is deducted from your next available payout."

How will Shopify get back the money to refund our customer? Will they just deduct the money straight from our bank account? What do they mean by "next available payout" ?

I'm also aware that Shopify will not return us back the credit card transaction fees. But will Shopify also not return back the 7% GST fee that is charged on all payments made through Shopify Payments?

Hope someone can answer my questions, thank you!

Replies 4 (4)
Bo
Shopify Staff (Retired)
Shopify Staff (Retired)
1793 197 456

Hey there, @internatmacshop 

 

Bo here from Shopify Support! 

 

Thank you for reaching out regarding this. Those are great questions. So, Shopify refunds the amount right away to the customer on your behalf, the amount refunded is then deducted from your next payout/s until that amount has been met. Your customer will not be waiting until your next payout, Shopify Payments mask sure the refund process starts right away. 

 

The 7% GST is then paid back to your customer and deducted from your GST total in your reporting/analytics so you will not need to pay this to the government. Shopify doesn’t file or remit your sales taxes for you. You might need to register your business with your local or federal tax authority to handle your sales tax. The calculations and reports that Shopify provides should help make things easier when it’s time to file and pay your taxes. Learn more about Shopify and tax here

 

All the Best,

Bo

Bo | Retired Staff Member

internatmacshop
Excursionist
13 0 5

Hi Bo!

Thank you so much for the fast reply!

Ohh okay now I understand the whole refund process. So, we have to generate enough sales to sort of pay back Shopify the refunded amount.

However, for the 7% GST fee, I was actually referring to the Shopify Payments 7% Transaction Fee as shown below:

shopify payments GST fee.png

So, just to let you know, the refunded amount that we need to refund our customer is actually $329. Below is a table we created to calculate all the fees:

shopify payments all fees.png

We already received the payout of $317.20 from Shopify a few weeks ago.

So now that we have to issue a refund, am I correct to say that Shopify will keep deducting from our future Payouts until they have covered the $317.20 ? Or will they only deduct $317.97? (this amount is excluding the 7% GST Transaction fee which is $0.77)

Hope to hear from you soon. Thank you!

Kind Regards,

Dayna

Bo
Shopify Staff (Retired)
Shopify Staff (Retired)
1793 197 456

Great question!  I would advise you to have a look at their order timeline. If they refunded the order in full, then the full amount will be taken; if fees were already deducted, we will not take it twice.

 

In your case, as this payout already occurred, the customer will be refunded the full amount and you will be deducted the payout amount. 

 

All the Best,

Bo

Bo | Retired Staff Member

internatmacshop
Excursionist
13 0 5

I see! Alright I will let you know again if I have any more questions, thank you so much for your help Bo!

 

Kind regards,

Dayna