Nonrefundable Fees When Refund is Done Minutes After Charge

[LisaW2]

I recognize that Square no longer refunds merchant fees for customer returns/ refunds.  Not particularly happy with the policy, but I didn't come here to complain about that in a general sense. My complaint involves immediate refunds, related to the following scenarios:

Immediate refunds: It's not unusual for customers in our shop to change their mind about something, one short minute or two after purchasing it, leaving us paying a seller fee if we refund the charge.

Another example: a customer announcing, after the fact, that they're tax exempt, can we refund the tax? There's no way to do this without refunding the entire charge, and charging it again, removing the sales tax first. Again, we get left paying two processing fees for one sale.

Another example: a customer yesterday made a charge for more than $280. Seconds later she said, "Oh, that was the wrong card, I meant to use THIS card instead!". We refunded the first charge, and charged the alternate credit card, again leaving us with a gratuitous extra $10 processing fee for a single sale.

Might it be a more reasonable policy to refund processing fees for customer refunds made within, say 10-15 minutes?

Thanks,

LisaW2

[Mobilebarn]

Totally agree this is frustrating — getting charged a processing fee on a sale that was reversed 2 minutes later doesn't feel right. We've hit this in our shop too when a customer changes their mind at the counter.

The key distinction Square makes: Void vs Refund.

- Void — cancel before the batch settles (same day). You DON'T pay the fee.
- Refund — reverse after settlement. Fee is kept by Square.

For immediate 'changed their mind' situations, always void the transaction rather than refund it. Go to Transactions on your POS, find the sale, and tap Void (not Refund). If the batch hasn't settled yet, no fee.

The frustration is that Square's processing window is getting tighter — sometimes the batch settles faster than expected and you're stuck with a refund. But for anything within the same business day, void should work and save you the fee.

[LisaW2]

"Void", eh? This appears to be the solution to the problem. Thanks so much for taking the time to share this info, much appreciated! 

[LisaW2]

Postscript: After further investigation, it turns out that this is not a solution. See entirety of thread.

[VanKalkerFarms]

Unfortunately, the moment the card is run, it gets encrypted, sent to Square's servers, then sent to the correct Payment network (Visa, MC, etc), then it is routed to the card network of the card issuing bank, gets approved or denied, and does the same trip back.  Once that happens, the fees associated with communicating those networks are charged to Square.  There is an Interchange Fee, a Network fee, and an Assessment Fee, and all those are non-reversible charges.  Square had been eating those charges before, but that is no longer the case, as well as many other credit card processors.  It doesn't matter if it is 5 seconds or 5 days; it is all the same.

As a Square user, it does suck when the customer is like oh I used the wrong card and now I have to eat $5 in fees, but that is why I have a 4% money handling line in my pricing algorithm.  There is always more than just the charges, even with cash.

[LisaW2]

That’s disappointing to hear, then what purpose does the “void” function serve, one wonders.

Looks like I need to do a test voided sale to determine if the fee remains. Thanks for your response.

[VanKalkerFarms]

We are seasonal, so I don't have any transactions to test Void on.  I had always thought that was only part of open tickets for Void/Comp and had not really paid attention that it is part of a completed transaction, or it isn't.

[VanKalkerFarms]

So I just ran a $3.26 test of the cheapest item on a CC, and I don't see anything related to Void, just "issue refund" or  "New receipt"  I also checked online on the computer in the Square dashboard, and I also can't find any reference to void.


https://squareup.com/help/us/en/article/5814-get-started-with-comp-and-void

This article also says "Void is when you close an open ticket without processing a payment"

[LisaW2]

Yes, from what I can gather from a few minutes searching, the "void" function applies to instances like restaurant tabs that haven't yet been charged-- "open orders/ tickets", canceling an unpaid ticket (before payment is "captured").

I suspect that your initial answer was correct-- once the payment is "captured", the related fees are irrevocably captured as well. But, I'll continue to explore the issue.

[LisaW2]

I just noticed Part II of your last comment. Yup, For the purposes of Square, I think we can consider "voiding" as synonymous with "clearing" a ticket where payment hasn't yet been captured. In other words, there IS no such thing as voiding a completed sale, only refunding.