Shopify opens disputes for returns via Klarna payments

[Desley]

Hi there,

Last week we received an email from Shopify that Klarna has now been added as a payment method via Shopify Payments. We already had Klarna as an additional payment method, but because additional payment methods within Shopify also entail more transaction costs, this was positive news for us.

However, we are now receiving inquiries from Shopify. To clarify the problem, here is an example:

1. Customer orders something via our webshop and chooses Klarna as payment method.
2. Customer receives order, but discovers that the size of an item is too small and wants to return it.
3. Customer returns items to us via a carrier and the customer reports to Klarna that they will return the item in question. They do this so that the invoice within Klarna is adjusted and they can pay any remaining amount for other items on the invoice.
4. We receive items, process this return shipment and initiate a refund.

The problem starts at step 3. When the customer reports a return within Klarna, Klarna adjusts the customer invoice. This is probably automatically passed on to Shopify, which most likely triggers something at Shopify that immediately opens an inquiry. As a result, we receive the following message from Shopify:

"The customer told their bank that they did not receive a refund for a cancelled or returned order.
The bank is reviewing this order and may decide to file a chargeback. If they do, evidence can no longer be submitted, and €xx.xx (€xx.xx + €15.00 chargeback fee) will be deducted from your next payout."

However, the customer did not tell Klarna at all that they had not yet received money back for a cancelled or returned order. They only indicated that they were going to return an order, after which they wait until we receive the return and approve it. This is all within the return conditions that Klarna sets. (https://www.klarna.com/uk/customer-service/how-do-i-return-my-order/)

Because an inquiry is opened immediately, we cannot process the return in a normal way (unless we agree to the inquiry, which costs us a €15 chargeback fee). We have to send proof to Shopify that we received the return later and wait until the inquiry is closed. This method takes us a lot of time to process and for the customer and Klarna a lot longer before the return is processed.

Is this issue already clear within Shopify or is there another solution for this? We now suddenly have multiple inquiries open, all concerning returns that were paid via Klarna.

Kind regards,

[DeepVyas]

Hi , Just I would like to add that in some of the opensource ecommerce solution available. I did the Klarna Checkout V3 integration, So while customer returns the order option for Partially & Fully return is available. 

So you can inform support, If that might be helpful to resolve your problem. 

[Peter-AG]

Hi,

We face exactly the same problem with the combination of Shopify Payments and Klarna. 

As we sell fashion and offer free returns, we process a lot of returns. Because of the problem with Shopify Payment we have a huge amounts of disputes every day.

I tried to contact Shopify Payments about this several times. They’re not willing to look into this matter. Now they even blocked all payments, because of the large amount of disputes.

My recommendation: Stay far away from Shopify Payments. During the most important month of the year they blacked the payments, while the problem is from their side.

[eampronk]

Same problem here, very annoying! Why isn't Shopify doing anything about this? We have now removed the Klarna option from our payment methods because this is not workable for us.

[safibra]

We have also removed klarna because of the same issue.

[Professorx1]

I’m facing the same issue. A customer marked the product as returned in Klarna without actually sending it back and I received a chargeback from Klarna. After several emails with the customer, I’ve now received part of the order but not the rest.

In the meantime, I had responded to the Chargeback that the customer not yet contacted us and returned the order. The current status is as follows:

“We submitted your response to the dispute on November 28, 2024, at 9:44 am. We’ll let you know when the bank makes their decision, which could take up to 75 days.”

I’m unsure of the next steps to take from here. Any guidance would be appreciated.

[afbs2023]

We have the exact same issue. Shopify Inquiries (actually just regular return requests from klarna) are piling up now, and I dont understand how I can close them without paying 15 euro chargeback fee for no reason. I tried refunding the order the normal way after I received back the goods, but the refund is stuck on the pending state.

I now asked the customer if they can somehow close the inquiry from Klarna... but based on these posts in this topic, I assume thats also not going to work?

Shopify this makes absolutely no sense. Can you please fix this issue? 

[Jarp]

We've got the same issue too. I'm turning off Klarna until it's been fixed.

[DvdMaas]

I've got the same issue since I switch from Klarna Merchant Center to Klarna via Shopify Payments. I got 1 duspute that opened before a return was set in motion/received by me and 2 disputes where custumers didn't send or file any returns.

I just chatted with a service agent and asked to file a complaint because clearly their system fails and I got send forth an back (check with klarna, ask your customer bla die bla). I linked this topic as well so they can see I'm not the only one. Main outtake is that he is filing it with technical support team after my frustration  (if that ever happens) 'I understand your frustration with this matter, Deborah, and I appreciate you sharing this information with me so that we can address these matters immediately. It may take some time for our technical team to investigate'

In the meantime I think I switching back to the 3rd party integration.

[FleurK]

We are receiving the same issue and the Shopify support desk doesn't help at ALL. It's really frustrating. Anyone already has some experience on how to solve this without doing the 15EU extra cashback?

[DvdMaas]

It seems like when a customer intents to return an item and marks it as such in Klarna it just automatically opens a dispute.... 

I just answer the questions, send printscreens and hope for the best.... One issue was resolved in my advantage and dismissed (but at the same time I aked my customer to undo the return in Klarna so this might have done the trick.) The 2nd one is still being reviewed, I asked my client if she did anyting in Klarna by accident or was going to return an item, but this is not the case. So NO idea where this claim comes from. The 3rd one is still open, I just wait untill the item is returned and will process it the normal way....see how that works for the fee/dispute.

The Help Desks solution to my complaint and the ticket was; 'put your return terms clearly on your website.. ' that was it. Useless... as in all these years there has never been any issues until this switch from Klarna merhcant portal to integration in Shopify Payments.

[FleurK]

Also, does anyone know if it's correct that you don't get access to the Klarna merchant portal when you put it on through Shopify Payments? This also seems a bit odd to me?

[DvdMaas]

Its not linked to the merchant center in Shopify Payments, just another payment option like all others you can switch on or off.
But with these issues I'm switching back to Klarna through the Merchant Center.

[afbs2023]

So after my last message here, I actually contacted Shopify support, which were pretty helpfull and clear this time.

They also asked for suggestions on how to make this process more clear for Sellers.

The inquiries that get opened on Shopify, will be automatically closed in your favor, after you have Refunded the returned order.

So what we always do is contact the customer that opened the Return in klarna, and communicate with them to get the package back to us as soon as possible.

After we received the returned products, we do a refund for the order, which will stay in the Pending state for approx 24 hours. After approx 24 hours Klarna will automatically close the inquiry in the Sellers favor, because a refund is the accepted solution. Without paying any Chargeback fee.

I tested this 2 times now, and this seems to work consistently, it's just weird that the refund takes approx 24 hours to get through.

I have only tested this with Orders that were returned with all products. I have not tested this with partial returns. ( If someone has, feel free to add your experience here! )

[Zentana]

Ah yes, we have the exact same issue. Some customers do not even provide a return label or return shipment. We got a case of fraud 2 times in 1 week.

Support seems totally unaware abouy the payment proces between creditcard and Klarna disputes.

Let's hope this thread gets enough attention so it gets patched quickly. It makes no sense.