WARNING: Shopify Fees not refunded when customer refunded

[RSanger]

My products cost $3000, and there is a $100 fee that shopify takes when someone makes a purchase.  But if I refund partially, there is no partial refund of this fee (like even paypal will do!) and if I do a FULL refund it will still cost me that $100 fee.  I'm outraged and ready to drop this platform. 

Note that even a test purchase of $1.00 has a $0.30 fee (or so) that WILL NOT be refunded!  

Klarna suggests when integrating with shopify to make a trial purchase (https://www.klarna.com/us/business/platforms-and-partners/shopify/)   I wonder If I'll be out the shopify fee if I do this.

Here's the excerpt from my chat session:

16:19 Karishma B (Support Advisor): What I'm saying is that when you're issuing a refund to a customer, there aren't additional fees associated with that refund. When a customer makes a purchase, however, you are charged credit card fees. And if you issue a refund to the customer, those credit card fees do not get refunded back to you.

[Anonymous]

I don't know why this thread has not gotten traction. I recently started noticing the same thing. Why is it that when doing a full refund, the transaction fees are kept?

The only solution I've come up with is maybe stating in my refund policy that any cancelled orders will be subject to the credit card processing fee, or that the customer can get a 100% refund as a gift card. What do you guys think?

[dcanoli]

Why is this the only thing I can find on this?  Really sucks that Shopify keeps the transaction fee if you issue a full refund to a customer...

[RSanger]

Important update (although a bit tardy): Paypal won't refund their fees when you refund a customer as well.  That is why I stopped using Shopify AND paypal.  I use SQUARE which will refund their fees for up to a year!!!

[Sobodad]

I am currently going through this myself ..

Recently there have been a large increase on my store with fraudulent customers. I review / cancel / refund them within minutes of the orders being placed.

Shopify then seems to simply ignores my actions, collects the payment, charges their fees, a week later makes a payment to my account of the fee reduced amount, followed up by a refund from my account of the full original value.

They claim the fees cannot be refunded ..

Yet if I were to say this to my customers and follow Shopify policy, I would be the one accused of Fraud ...

[Beacon-Jason]

Hi @Sobodad 

You should really look into enabling manual payment capture in your Shopify payment settings. 

A payment that has not been captured will not incur the cancellation fees.

When you cancel an order, the payment status will show the "Voided" status.

You usually have up to 7 days to void the order before the payment status expires. 

Of course this method is not ideal if you have a lot of orders on a daily basis, which in this case, you need to use a third party app to control the payment for you. This includes Shopify Flow (free) and Beacon (paid).

Example use case: "Do not capture payments if customer provided a fake phone number, while automatically capture payments for orders with a valid phone number.

I hope this answers your concerns.  

 

[thebluehound]

This could have been written by me!  Fraudulent customer, cancelled immediately, Shopify still deposits the payment into my account (days later) and then refunds less fees.  The whole time I was live chatting with them and they were saying, yes, refund them immediately...no mentioned of 'oh, by the way, this is how we still keep the fees'.  I have to look into manual payment capture mentioned below by Beacon-Jason.

[RSanger]

Another update, about 2 years late.... SQUARE changed their policies about refunding customer fees as well.  So they've fallen from my "most preferred" status.  I'm now charging mostly from Quickbooks, I'm sure they keep the processing fee as well... trying to figure out whether they charge it AGAIN for refunds!!!  

[Mikey96]

It feels like as sellers we're being shafted by the payment gateway providers. Other than start a petition to try and get the UK government to make it illegal for card payments processors and online payment gateway providers to keep the fees when a customer is refunded, I'm not sure what else we can do.

If someone does want to create a change.org petition for it then post the link in this thread and I'll happily sign and share!

[Mikey96]

It's disgraceful that the likes of Shopify and PayPal think it's okay to keep the fees when a customer order is refunded, causing the seller to lose out. Imagine turning around to a consumer purchasing through your B2C website and saying that you're only giving them a 95% refund because the payment processor won't return the fees. You'd quickly get a lot of negative reviews. Moreover, when selling in to the European Union they actually have laws in place that state you must refund a consumer customer 100% of the value paid including any shipping fees charged. As if it isn't hard enough to do business. I'm all for consumer rights, but common sense has to be applied.

I complained to PayPal when they first started doing it and the response they gave was that "sellers should factor it in to their overheads as a cost of doing business"... ermmm nah mate... you're a multi billion dollar company that's going out of it's way to screw over small businesses for a minimal boost in your profits. For new store owners especially that are just getting started who only process a couple orders a week it's a really big deal.

I hope that the potential fee revenue generated by the customers turning away from the likes of Shopify and PayPal because of these greedy policies is more than they are gaining by enforcing the policies. It's bad business practice. Shame on you Shopify and PayPal.