Double Fees : Order Cancellation & Customer Chargeback Filed At Same Time (out $70)

[JoseJose33]

Curious if anyone experienced something like this and is there any chance I could get credited for at least some of these fees? It’s quite a confusing situation.

I received a $1,500 order, but Shopify flagged it as potential fraud. I canceled and refunded the order immediately, but I was still charged $55 in processing fees. When I contacted customer support via chat, they confirmed this was standard practice, (?) which is frustrating but understandable.

However, on the same day, the customer also filed a chargeback. Apparently the chargeback takes precedence over the refund, so the refund was canceled, and Shopify charged me an additional $15 for the chargeback fee (okay also, understandable)

Despite the chargeback overriding the refund, Shopify still keeps the original $55 fee. So, in total, I’m now out $70. For NOT fulfilling a fradulent  order they flagged.

When I spoke to support, they initially agreed that since the refund wasn’t completed due to the chargeback, I shouldn’t be charged both shopify fees and the chargeback fee for the same order.

Despite this, they haven't been able to assist further or reverse the charges. This could continue to happen where I lose $70 per order, and I would never be able to prevent it.

Has anyone else dealt with this issue, or have any advice on how I might be able to resolve it? Appreciate any insight. About to bail on the platform but figured I would see if anyone had ideas here! Thx!

[wo · Accepted solution]

What I do now is to set up manual payment capture. Then, I use Shopify Flow to automatically capture payments when it determines that the orders are low-risk. In this way, I can judge whether the medium- and high-risk orders are real orders and then manually capture payments.

[dylanpierce]

@wo 's exactly right. You're paying for processing fees because your checkout settings are set to capture the payment automatically.

There are two phases to a credit card charge:

1. Authorization - this is when your store gives the credit card details to the payment gateway and it's accepted
2. Capture - after the card is authorized, then actually capture (aka charge) the card for the order. This is when transaction fees occur.

If you set your checkout payments to manual mode, then you can manually initiate the second step (charging the card). That way you can control when to actually charge the customers card and avoid processing fees on risky orders.

Here's a link to download your copy of a free workflow template so you can automate capturing paymen...

[JoseJose33]

TY! This was incredibly helpful !!!

[Merchanto]

To address the processing fees related to the chargeback, it might be beneficial to review Shopify's terms regarding chargebacks and refunds to understand the policies fully. Although it’s standard for processing fees to be retained, you can provide your case details to support again, emphasizing their initial agreement about the situation. Lastly, consider documenting all interactions with support for reference in future discussions.