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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

#91

Post by devrand »

latchkey wrote: post #26

This will affect businesses that do 3rd party merchant services, like events. If the event is cancelled, refunds are issued. Who pays that fee? It would be up to the business to try to claw back funds from the promoter of the event... who is now bankrupt from not being able to do their event. It gets ugly fast.

Isn't this why non-refundable deposits are common? The fee would be paid out of that.

That all being said, for sales that big I'm guessing ACH/wires are a lot more common anyway.

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

#92

Post by latchkey »

skyyler wrote: post #77
latchkey wrote: post #57

Earlier quoted context omitted.

The extra fees are simply a way to gouge end users. It has nothing to do with refunds and it is also often out of the control of the promoter of the event. When I built an event ticket sales site, we tried to get promoters to just raise their ticket prices a bit to include the 'service fees' so that end users got a single price, and they refused. Promoters just want to advertise $25, not $32.50 (contrived example)...…

The fees being non-refundable has to be a bonus.

From the merchant service aspect, they provided the service (allowing the user to buy a ticket to an event), I don't see why they would have to refund their fees for that service.

In effect, for better or worse, that is also what Square is doing now too.

Of course, that isn't what the end user wants.

What the end user wants is the promoter of the event to refund them their ticket cost AND the fees. That would be up to the promoter to do that, which they aren't going to do since they are now bankrupt from not hosting the event.

I hate to bring up the whole 'crypto fixes this' thing here, but it does. The transaction fees on L2 chains are so low that the promoter could just afford to give full refunds in whatever stablecoin the end user bought with. There would be no square, credit card company or anyone else in the mix trying to dip their fingers into the pie. The whole problem revolves around the issue of too many cooks in the kitchen and some of those cooks are really corrupt.

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

#93

Post by Alupis »

gowld wrote: post #47
jarym wrote: post #32

I guess the days when refunds were frictionless so that consumers could purchase with confidence are gone? Refunds have always been a cost of doing business - it just seems the processors / card companies want to change the rules and have their cake and eat it now that cash is mostly dead.

Refunds are still frictionless for consumers. It's vendors who have to maintain product quality and prevent fraud to avoid returns. It's not Square's job to make sure that a vendor's product is high-quality or that customers really want to keep the products they buy. Credit cards mostly work the same way. https://www.cardfellow.com/blog/credit-card-refund-fees

Majority of returns are for BS reasons, regardless of how quality your listings and products are.

"Item Defective" - Unopened factory sealed, tamper-proof blister pack.

"Not Received In Time" - Delivered 3 days ahead of schedule.

"Too Small" - Item clearly says in multiple places, and even demonstrates in images, the item is 2mm in diameter.

The result? Everyone pays more for the products so we can support a few bad apples serially returning stuff.

This new policy from Square is going to stick merchants with an empty bag for all returns. Which ultimately will make merchants more careful, to avoid getting hosed, ie. raise prices for everyone to support a loss on a returned or cancelled transaction.

If a transaction is cancelled, or reversed/refunded - nobody should be making a profit. That includes Square, Visa, etc. This is just an absurd anti-consumer policy that small businesses (the only ones using Square) will get blamed for being greedy over.

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

#94

Post by latchkey »

PeterisP wrote: post #88
latchkey wrote: post #57

Earlier quoted context omitted.

The extra fees are simply a way to gouge end users. It has nothing to do with refunds and it is also often out of the control of the promoter of the event. When I built an event ticket sales site, we tried to get promoters to just raise their ticket prices a bit to include the 'service fees' so that end users got a single price, and they refused. Promoters just want to advertise $25, not $32.50 (contrived example)...…

It's only natural that "Promoters just want to advertise $25, not $32.50", so I think the only way how change is going to happen is by truth-in-advertising regulation that requires advertising the fees-included price, where it must be possible to actually get the thing by paying the advertised amount.

Yea, we tried very hard to promote T-I-A, but we were fought on it the whole way and at the end of the day, it was part of the downfall of our business. Promoters didn't want to list their events on our site because of that. It became a friction point for them, even though at the end of the day, the math was better for them and for the end user.

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

#95

Post by [deleted] »

cwkoss wrote: post #86

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is even questioning their position anymore. Visa and Mastercard are massive drains on our economy - it's ridiculous how unquestioningly their 3% tax on commerce is accepted.

[deleted]

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

#96

Post by Alupis »

crote wrote: post #79
peanuty1 wrote: post #62

Earlier quoted context omitted.

To be fair, sometimes people return stuff for arbitrary reasons like changing their mind.

Yes, and that's totally fine. That's part of doing business and stores already take that into account. However, the web shop I work at pays a 3% processing fee on returned payments initiated by us . It just makes no sense.

I don't know who your current processor is, but if you have any real volume, get off Square/Stripe if that's where you are at. Their rates are awful for volume sellers.

Square approached us a few years back and could not comprehend why we weren't jumping at their offered 2.6% + $0.35... "but the AI!?!?" is all their sales people could come up with.

We're well below 2% + $0.20 per transaction for all cards (including AMEX, believe it or not). Square/Stripe and the rest are great for being Turn-Key for new businesses. But for anyone with real volume, they are a joke.

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

#97

Post by theFletch »

cwkoss wrote: post #86

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is even questioning their position anymore. Visa and Mastercard are massive drains on our economy - it's ridiculous how unquestioningly their 3% tax on commerce is accepted.

A lot of local shops near me pass the processing fees to their customers. Usually with a small sign at the register that says 3% added for credit card payments.

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

#99

Post by themaninthedark »

cwkoss wrote: post #86

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is even questioning their position anymore. Visa and Mastercard are massive drains on our economy - it's ridiculous how unquestioningly their 3% tax on commerce is accepted.

Cash still works and if you can get enough people to go back to using it then credit cards will have to change or be more ripe for disruption.

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

#100

Post by caleblloyd »

I learned the hard way in March 2020 that PayPal doesn't do this anymore either. I was helping an organization raise money for a Charitable 5k when COVID shut everything down.

This was when everyone thought the world was ending still so we didn't think to change it to a virtual 5K. Refunded all payments on a couple thousand dollars and was out around 4% in processing fees.

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