Shopify is collecting fees on authorized sale amounts and not actual sale amounts. I found this out recently during an order I edited before capturing payment. Here is the explanation:
All my orders are captured manually
customer places order for $100
customer decides to change order to $50 before I captured payment
I change order to $50 and capture payment
shopify collects $100 and automatically issued a $50 refund (this made caused confusion for me as I only captured $50 payment)
shopify charges me fees based on $100 authorization and not the $50 actual sale
That’s exactly what has seemed to happen even though I only captured the adjusted sale amount. The are collecting too many fees against the actual sale. Refunds should not need to be issued if I am capturing the correct amount.
Most Alternative Payment Methods (APMs) don’t undergo the 2 phases of authorize + capture, and will just capture the full amount. An order adjustment will result in full capture + refund. That’ll be the behaviour of the payment method, and there isn’t much Shopify can do about that.
Yes, credit card. Authorizations should not be transferring funds. Authorizations only check whether balances are available and give the opportunity to change amounts on the sale, just like hotels typically do. Authorizations show up as pending and then adjust to the correct amount during the capture process. There aren’t refunds.
If it’s card then that behaviour is unusual. You mentioned refund in your initial post, was it a refund, or an adjustment of the captured amount? A refund would take a 48hours - 10 days for the funds to be returned to the customer, whereas an adjustment to the captured amount would be immediate.
It was a refund automatically generated my Shopify. I am using Shopify payment processor which allows me to authorize then capture manually up to 7 days after authorization.
Thank you for sharing those details and your feedback on how payment authorization and payment capture works with Shopify Payments.
Our standard process in these cases is that the payment originally authorized for the order is captured and any adjustments to the order causing the total to drop below the authorization amount would then be refunded back to the customer. This does mean that the processing fee for this transaction would be the total amount initially charged to the customer’s card and the refunded portion would not be excluded in that.
I recognize your feedback on this and what the expectation was when using payment capture on your store. At this time that is the expected behavior of this feature. I will be happy to share your feedback with our developers though for future consideration.
It literally says on the Stripe (Shopifys payment processor) website that authorized payments are held until the order is captured and the difference (if lower amount is captured) are released, not captured.
Shopify should not be capturing an authorized amount when we have captures set to manual.
Also in the Shopify steps of manual capturing authorized payments it says “to capture an amount different than the authorized amount enter the amount to capture”
They’ve not placed an order for the full amount, yet the get the funds taken for the full amount. And Shopify don’t even attempt to contact the payment processor to initiate the refund for 48 hours, therefore using the customer’s funds as cashflow.