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Square to no longer return processing fees when buyers are issued a refund

squareup.com

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Re: Square to no longer return processing fees when buyers are issued a refund

#11

Post by __derek__ »

CryptoBanker wrote: post #3
vinarun wrote: post #2

it was only a matter of time given that Stripe has a penalty too

I fail to see why there’s a penalty for a refund. A chargeback would be one thing, but a refund is a totally normal business process

Apparently merchants can avoid it with store credit:

> Additionally, we offer a number of resources and tools to assist sellers in accommodating this change. Our Return Policy Guide & Templates provide sellers with guidance on how to create a return policy that best suits their business, while Square’s free eGift Cards can serve as an option for providing store credit to buyers with no additional processing fees.

Meet the new boss, same as the old boss.

Re: Square to no longer return processing fees when buyers are issued a refund

#12

Post by potamic »

crazygringo wrote: post #5
CryptoBanker wrote: post #3

Earlier quoted context omitted.

I fail to see why there’s a penalty for a refund. A chargeback would be one thing, but a refund is a totally normal business process

It's not a penalty, it's just a cost of using the network. If you use the credit card network not just once but twice -- once to process a purchase and then yet again to refund it -- you're using that infrastructure. It makes sense you'd pay for its usage. If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place a…

By that logic they should charge by request volume, not by percentage of amount. As a matter of fact, there is no logic in pricing. Sellers will charge what they can get away with, buyers will pay what they can afford. And of course, it is always negotiable.

Re: Square to no longer return processing fees when buyers are issued a refund

#13

Post by jedberg »

bombcar wrote: post #8

Does anyone know if the "real big" merchants like Walmart have to pay the fee? I assume they're so large they can sit on the processors and squeeze them (I know Costco does, they pay 0% fees in-store because Visa is so hungry to be their processor).

Based on this article it sounds like they pay enough to want a law to make it less:

https://www.cnn.com/2022/09/20/business/credit-card-fees-vis...

Costco gets away with 0% because they offer exclusivity and because they cover some of the cost of the rewards programs. I guess Walmart et al did the math and figured they would lose too much business.

The average Costco shopper makes over $100K a year, so getting another card just to shop there isn't a problem for most. Can't say the same for Walmart.

Re: Square to no longer return processing fees when buyers are issued a refund

#14

Post by scblock »

__derek__ wrote: post #11
CryptoBanker wrote: post #3

Earlier quoted context omitted.

I fail to see why there’s a penalty for a refund. A chargeback would be one thing, but a refund is a totally normal business process

Apparently merchants can avoid it with store credit: > Additionally, we offer a number of resources and tools to assist sellers in accommodating this change. Our Return Policy Guide & Templates provide sellers with guidance on how to create a return policy that best suits their business, while Square’s free eGift Cards can serve as an option for providing store credit to buyers with no additional processing fees . Me…

No one wants store credit.

Re: Square to no longer return processing fees when buyers are issued a refund

#15

Post by klodolph »

potamic wrote: post #12
crazygringo wrote: post #5

Earlier quoted context omitted.

It's not a penalty, it's just a cost of using the network. If you use the credit card network not just once but twice -- once to process a purchase and then yet again to refund it -- you're using that infrastructure. It makes sense you'd pay for its usage. If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place a…

By that logic they should charge by request volume, not by percentage of amount. As a matter of fact, there is no logic in pricing. Sellers will charge what they can get away with, buyers will pay what they can afford. And of course, it is always negotiable.

That assumes that the cost is proportional to the number of transactions, and is completely uncorrelated to the size of the transaction, which doesn’t make any sense to me. Any costs due to risk will be larger for larger transactions.

Re: Square to no longer return processing fees when buyers are issued a refund

#16

Post by bombcar »

jedberg wrote: post #13
bombcar wrote: post #8

Does anyone know if the "real big" merchants like Walmart have to pay the fee? I assume they're so large they can sit on the processors and squeeze them (I know Costco does, they pay 0% fees in-store because Visa is so hungry to be their processor).

Based on this article it sounds like they pay enough to want a law to make it less: https://www.cnn.com/2022/09/20/business/credit-card-fees-vis... Costco gets away with 0% because they offer exclusivity and because they cover some of the cost of the rewards programs. I guess Walmart et al did the math and figured they would lose too much business. The average Costco shopper makes over $100K a year, so getting anothe…

I was specifically wondering about the refund cost; I wonder if Walmart is eating the 1-3% on all refunds (I suspect the stores that DO eat it are the ones that really want to refund as store credit).

Re: Square to no longer return processing fees when buyers are issued a refund

#17

Post by they4kman »

CryptoBanker wrote: post #3
vinarun wrote: post #2

it was only a matter of time given that Stripe has a penalty too

I fail to see why there’s a penalty for a refund. A chargeback would be one thing, but a refund is a totally normal business process

A refund _is_ a chargeback – the only difference is who initiates it. Technically, any time funds are moved onto a card, it's called a chargeback. This is how one would load a gift card, for instance.

When it comes to credit card merchants, a chargeback always dings a transaction fee, and the merchant may additionally tack on a chargeback fee. So a full refund process will incur two transaction fees, plus possibly a chargeback fee.

Re: Square to no longer return processing fees when buyers are issued a refund

#18

Post by __derek__ »

jedberg wrote: post #9
crazygringo wrote: post #5

Earlier quoted context omitted.

It's not a penalty, it's just a cost of using the network. If you use the credit card network not just once but twice -- once to process a purchase and then yet again to refund it -- you're using that infrastructure. It makes sense you'd pay for its usage. If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place a…

> If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place at the end. Funny you should use that example. On toll roads you get charged in both directions, but I've never seen a toll bridge that had tolls in both directions. Usually the argument is that you really can't go any other way so the toll in one directio…

> I've never seen a toll bridge that had tolls in both directions.

Huh, I think I've only seen this once (the Tacoma Narrows Bridge). Other toll bridges I've driven have all had tolls in each direction, e.g., Ambassador and Blue Water Bridges to Canada, Lake Washington floating bridge. Maybe I need to start taking more bridges to nowhere!

Re: Square to no longer return processing fees when buyers are issued a refund

#19

Post by falcolas »

potamic wrote: post #12
crazygringo wrote: post #5

Earlier quoted context omitted.

It's not a penalty, it's just a cost of using the network. If you use the credit card network not just once but twice -- once to process a purchase and then yet again to refund it -- you're using that infrastructure. It makes sense you'd pay for its usage. If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place a…

By that logic they should charge by request volume, not by percentage of amount. As a matter of fact, there is no logic in pricing. Sellers will charge what they can get away with, buyers will pay what they can afford. And of course, it is always negotiable.

> And of course, it is always negotiable.

Sweet. How do I negotiate with Amazon again?

In reality, negotiation is a relic of a long gone era and flea markets. Buyer agency in general has mostly disappeared in modern transactions.

Re: Square to no longer return processing fees when buyers are issued a refund

#20

Post by __derek__ »

scblock wrote: post #14
__derek__ wrote: post #11

Earlier quoted context omitted.

Apparently merchants can avoid it with store credit: > Additionally, we offer a number of resources and tools to assist sellers in accommodating this change. Our Return Policy Guide & Templates provide sellers with guidance on how to create a return policy that best suits their business, while Square’s free eGift Cards can serve as an option for providing store credit to buyers with no additional processing fees . Me…

No one wants store credit.

Square wants more store credit. The more lock-in, the better.
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