Does Shopify not return transaction fees when I issue a refund? I keep getting fraudulent orders which I have to refund to avoid chargebacks, but I just realized Shopify is draining my account because they keep the transaction fees. Is this right or am I missing something?
That's right, currency conversion fees and credit card fees aren't returned to you when you issue a refund:
If you are getting many chargebacks or having to refund lots of orders, it sounds like you might need to look at trying to prevent orders being placed on your store that are potentially fraudulent.
Your best way of doing this is a combination of Shopify's own fraud analysis algorithm, which cross-references billing and shipping addresses with card details and names to try to ascertain the credibility of the buyer, your own investigative efforts by using our Fraud Prevention Tips, and using the Fraud Filter app.
Another thing you could try doing is ensuring you are manually authorizing your orders, instead of doing it automatically. This will give you the opportunity to have a look at the order to see if anything seems off to you. You could cross-reference with the fraud prevention tips I listed above. You'd change this setting by going to Settings > Payments:
You could then once again place details from the suspicious orders into your Fraud Filter app.