I recently analyzed the transaction/billing context. Depending on your plan, My plan charges 2%+.30 per transaction. Calculated in the following manner: [(cost of products - discounts) + tax + shipping charges] x rate. Then, Shopify bills for the shipping at a later date. What is happening is the 2% rate is being charged against the shipping charges, then bill for it. If the shipping charges were considered income, I understand being charged the 2%, but the shipping is being billed for and really not part of a payout, if you are being charged for it later. This may not be a lot of money, but depending on the number of transaction each company does online with shipping vs in person, this adds up over a month/year.
Maybe this has been bought up before or never noticed, but the accounting appears incorrect.
Thank you for reaching out about this and for sharing those details and your concerns. The credit card processing rates are applied to the entire amount of funds being handled by the payment gateway. The purchase of a shipping label after the fact is separate from the money being handled by the gateway when the customer checks out. To the best of my knowledge this is standard practice across all online gateways currently in use.
I definitely understand how these fees can add up over time though and it is feedback I will happily share with our developers on your behalf.
I understand what you are saying.
I think you might miss part of what I posted.
Overall the fees are applied to the total transaction. However, the
shipping fees are then billed for later.
Example…A transaction is $100 and shipping of $20 and fees are 2%. That
would equal $2.40 in fees. Because its based on $120. $2.00
Then you are billed later for the $20 shipping. So you are paying the
shipping cost back, and have already paid $.40 on that shipping cost.
The part Im not understanding is why are we being charged a fee on a
shipping portion when we are having to pay that back.
Thanks
Garon
Sorry I was unable to finish my previous explanation. The fees should apply to the $100 transactions not the shipping charges. It would be $2.00 vs $2.40. When transactions is done in person, the fees are applied to just the transaction.