Processing fees will no longer be refunded to your account when you issue full or partial refunds

[thegallery]

I got a email from Square yesterday. "Processing fees will no longer be refunded to your account when you issue full or partial refunds to your customers"

This sounds illegal.

[HC_Charlie]

Hello @thegallery thanks for your post. I understand your frustration at this change, and as a merchant there are several things you can do to help alleviate the burden of processing fees. The first thing you can do is remember that processing fees are considered a valid business expense and you can deduct these on your taxes. Talk to a qualified tax professional with any questions regarding your tax deductions.

Another thing to remember is that some other processors such as PayPal and Stripe also have a similar policy. Neither of these companies refunds you the original transaction fees when you issue a return. In general, there’s no requirement that processors return the processing fees on refund transactions. As a merchant, you have the option to shop around for payment processors that will work best for your particular business, but be careful because some credit card processors will refund the processing fees , but charge you a flat-rate fee for returns. This could be as little as $0.05 or $0.10.

While this is frustrating, try to understand why this is happening. The financial institutions like Square still want to be compensated for their role in moving money around. For a refund, they had to move money around twice, and feel as though they should still be paid.

Another option you have is to re-evaluate your business' return policy. The easiest way to avoid the credit card refund fee is by limiting your returns and providing exceptional customer service. If possible, try to issue store credit instead of returning money back to the credit card. Just make sure all of this is clearly outlined in your returns policy and refund policy. 

So while this activity is not illegal, it may cause you frustration and anger. And please consider contacting your local government representative. While contacting Congress may not be at the top of a small business owner’s list of strategies to help their company – it should be. The best way to make sure that any new laws provide the help you need is to let your representatives in Congress know exactly what you want.

[thegallery]

The new policy should be based on your store's history with returns.

Last year my shop refunded less than $3

[HC_Charlie]

@thegallerythat's awesome! I have more returns than that and so do a lot of other businesses. Sounds like you have some great customers, can I borrow them LOL. So fortunately it seems like this change won't impact your business very much, but still I know this isn't the ideal situation for businesses. I think from the processor's point of view, it isn't a matter of volume...there is still money being processed and transferred from one account into another, so a $1.00 transaction requires the same steps as a $1,000 transaction.

Square is always welcoming feedback from their customers, so I think your suggestion is a valid one. Of all the vendors and businesses I've used over the years I've found Square to be incredibly helpful and understanding. I know they take into account feedback from users when they're developing new policies and features, so thanks for being a part of the Seller Community and posting here. The more activity and discussions that happen here between fellow business owners, the more Square can learn about what is most important to us. You may not get the resolution you're looking for, but please know every other business owner in the forums here is on your side, and we only want to have everyone's business succeed.

[thegallery]

PayPal doesn't keep their processing fees when I refund a customer. this customer paid $358.13 twice by mistake

[thegallery]

"there is still money being processed and transferred from one account into another, so a $1.00 transaction requires the same steps as a $1,000 transaction."

Yes but it's all automated

[shupeadupe]

I think it's important for Square to realize that once they start losing customers because they start charging fees that they don't have to and we leave out of principle.  Most likely we won't come back.  I still have trouble getting people to pay me through PayPal because they swore they would never use PayPal because Paypal did something shady 10 years ago, etc...  So, after I go research another way to process cards and switch I'm most likely not coming back.

[PBL]

I have never had to issue a refund. SQUARE FROM THE JUMP / 2009!  MUCHO DINERO ?  YES.!!!!... This one pending is $2,851.98. with a $74.25 processing fee. 

I wanted to refund the ENTIRE amount and have the $74.25 returned to me, the transaction is well under 30 days. 

IS THIS GOING TO COST ME $74.25?  IT BETTER NOT... or C YA Jack ... or whoever ...