Updates to Square's Refund Policy

[rivas8409]

The title of this thread has been edited by a Square Moderator from the original: "So now (After April 11) Square gets to keep their fee if we refund, but we lose our money?"

I just read an email from Square that I got last night about an update to their TOS.  Effective April 11, 2023 "processing fees will no longer be refunded to your account when you issue full or partial refunds to your customers".

So let me get this straight...  We issue a refund (effectively no sale happened) and we give back/lose that sale and that revenue, BUT Square still makes their money off of us?  This seems totally wrong.

The email says, "[we] may wish to update [our] return policy for [our] customers in order to account for this policy change."  All I can do is shake my head.  I guess I'll have to rethink how I do my refundable deposits....  Thanks Square...

[Candlestore]

@rivas8409 ;

Yes I got an email stating the same thing and wanted to read more about it but could not find all their details on this.  We do not do many returns since we make candles, and we can not be responsible for someone not liking a scent after burning a candle, or them leaving it in a hot car and it melting.  Now if there is a problem with OUR manufacturing we just replace it with the same scent, so still no refund.   I still want to read the article to see what else they might be changing to take more of our money.

[PartyManiaMD]

While this is a bit disappointing it's sadly in line with most credit card processors. We used to use an interchange+ processor and they were one of the largest in the industry and we'd get hit when we ran transactions but not refunded when processing returns.

It was nice while it lasted to see Square refunding processing fees on returns but I had a feeling eventually that was going to disappear.

I have a feeling with the global economy going into a big unknown territory that the credit card processors are going to look to squeeze the merchant processors (Square, etc) and that'll eventually be passed along to us.

Personally we've noticed most of our customers are alright with exchanging or store credit, I may look into making that the official policy going forward. Given most of our sales aren't returnable(seasonal or balloons) it makes sense to just not do full refunds.

What's insane to me is how much money the big box stores lose on returns and the pallets of stuff they have to dispose of. If they all limited their return policy to something more sensible people would have to adjust and life would go on, instead we have massive waste and landfills full of perfectly good product because of super liberal return policies and ultimately the customer ends up paying for said waste.

[SnomoGirl]

I don't do many returns on here, but I have had to do returns through Paypal, and through eBay - both of which DO credit my processing fee/seller fee back to me. I was surprised that Square basically said 'everyone else is doing it, so now we are too' - when this is actually the first I had heard of anyone doing it. I understand that squeezing nickles out of the little guy is how this world works, but it doesn't have to be that way.

[_Violet · Accepted solution]

Hi all 👋 Thanks for reaching out to the Seller Community. I can certainly provide some additional information on the recent Refund Policy update.

Square has incurred network costs from many of our payment partners for these refunds over the years but has covered those costs on your behalf. As we continue to invest in new payment offerings and improve the payment experience for you, the processing fees for each payment will ensure a high-quality experience for you and other sellers.

You will still be able to issue a refund for any purchases within a year of the original transaction. When you issue a full or partial refund, Square will debit your account for the amount of the refund and send that amount to your customer. If the amount of the refund is not available in your Square account then your linked bank account will be debited for the necessary amount. You can find more information about the refund process here.

We understand that considering cost is an important part of your business and we are committed to providing you with fair and transparent pricing. If returns are not a frequent part of your business but do impact you, we recommend visiting our Return Policy article for suggestions on creating a policy that best suits your business. For example, you may consider a partial return or restocking fee to account for the cost of refunding your customers.

If you experience refunds for cancellations related to an upcoming event, rental, or transportation, we recommend that you explore splitting payments by using Square Invoices or ACH Transfer. This will allow you to take a partial payment up front and limit the amount you will need to refund in the event of a cancellation.

I hope this information is helpful but please do let me know if you have any additional questions 🙂

cc: @rivas8409 @Candlestore @PartyManiaMD @SnomoGirl 

[SweetRepeat]

I'm looking for a setting where we can identify that, when refunding for product returned, original CC processing fees are retained and NOT included in the customer's refund.  

Does this exist and I'm missing it?  If not, is it in the works?  

[HC_Charlie]

Hello @SweetRepeat thanks for your post. Just to clarify, CC processing fees are never returned to your customers (or to you); they are retained by the merchant processor to cover the expenses of moving that money around between different holders. I'm assuming that you're talking about you as a business owner charging your customers a fee to cover the cost of processing their CC, so rather than the business paying those fees, you are passing that on to your customers? If so...

I do not think there is a setting to add or adjust CC fees on a customer transaction. Check out this post regarding charging a convenience fee in order to recover CC fees. Some important notes mentioned in that thread...there are regulations established by Visa and Mastercard, so whatever you do make sure you're not going against any of those policies. In general, any fees associated with processing credit cards or refunds can be considered a cost of doing business, and therefore most likely may be able to be deducted on your business' taxes (please consult a qualified tax pro for any tax-related questions.)

As far as if this is in the works at Square, I do not think so, but you are always welcome to submit a Feature Request.  Square's product teams look directly to your feedback to help inform our future development opportunities.

[SweetRepeat]

Hey there, thanks.  Yes, totally a CODB and tax deductible, however, I'd love to put the responsibility of lost cc processing fees back on the customer should they decide to not keep, and wish to return, their items.  This 1) is better than moving to a no-return policy and 2) is protective of us as a business due to the type of product we sell.

So, perhaps what I'm looking for is a setting for automatically applying a RESTOCK FEE for returned items.  Does this exist?  

And, yes I could manually calculate and apply, but it would mess up the restocking and is not reasonable for us as we have staff.

[HC_Charlie]

I'm sorry @SweetRepeat this isn't an automatic option. See this post for some more info and a mention of submitting a Feature Request.

[Donnie-M]

@SweetRepeat There isn't a report, but this is the new policy starting soon by square that matches stripe and paypud.  Basically, when the transaction is made and you are charged that is it.  If you do a refund it is out of your funds completely.  So take 1000.00 sale, refund $100 you would pay 26.10 for the processing netting you 973.90 before refund..after refunding the $100 you would be left with 873.90.  (For in person transaction).

Processing is just a straight cost of doing business.

[SweetRepeat]

Cost of doing business.  Yep.  Technically, this is a CODB for Square as well, no?  

So, if Square needs to change how it's saving its bottom line, help those of us (who feed your Square's bottom line) by adding an easy restocking fee setup that is USER FRIENDLY for those of us who have staff (and pay for many of your services, like payroll).   This helps us help our customers as well as we can maintain returns.  Merchants maintaining return policies will also likely help maintain/increase overall sales due to customer comfort and this in turn benefits Square. 

You scratch our back, we scratch yours, everyone has their needs met. Rinse and repeat, right?  

[PFGlamping]

Hi thanks for the reply, Square at the moment is showing that it will refund about $127 of the deposit that I have to repay. That is so far more than what the charges they occur. 

[Donnie-M]

@PFGlamping That definitely doesn't sound correct to me.  I figured you were doing card not present/online which is 2.9%+.30c.  Is the 150 a separate charge on your customers from you? or do you include it in the total? and then if yes do you just do a partial/amount refund?

and btw, I have seen some tent glamping and it looks amazing...love camping myself, what is your theme?  I saw a fancy canvas style place one time.

[ListeningStack]

Hello Square, I’m a long time user and process hundreds of thousands of dollars every year on your platform, I am now looking for a new processing company that will do the right thing and refund my fees when we do a return. It is utterly ridiculous to state that Square has incurred fees over the years as the justification of doing this petty money grab. You are a large company and that is part of the cost of doing business. Your users are the backbone of America, small businesses, and you are squeezing them unnecessarily! It’s a bummer that you would walk away from your core business, I’ve always liked using your platform. Goodbye and good luck with that greed thing large companies do so well.

[Portview925]

Let me know who you find… this is def greed at its finest!!! Shame on you square!!! 

[MarciaDurgin]

I feel the same way.    Most times we have a return it is just an incorrect charge at the register - there  is no way to pass that on to the consumer. 

We lose again!

[SweetRepeat]

Hi there, any updates on Square implementing an easy restocking fee/process?  

This is critical for any of us mindfully managing our business's finances.  

Thank you!

[JJ_]

Hey, @SweetRepeat Thanks so much for sharing your interest in this request. In order to appropriately send these to our product teams we’d love it if you'd submit this request on our Ideate page for Square Retail. Our team monitors these boards and we triage them to measure needs. You can search the boards to see if this has been requested before and add your use case if so!

[Info1234]

Hey you all. They are recommending you don’t use square in order to not get that charge by telling you to split the payment via ach. Or how about you just send the whole payment via ach and cut square out.   The solution is simple. Go to another payment provider, there are plenty of options out there. 

[Donnie-M]

@Info1234 You are correct, but most of those do one of 3 things:

1.  They also do not refund processing fees.

2.  They do refund processing fees but charge a monthly fee to use the service.

3.  They refund the fees but provide no software or sub standard software for what you need or want.

So you can pick your poison so to speak, but to say just switch is the answer is an overly broad solution with a myriad of complications that you also have to overcome or be prepared to live with.  If a refund is that critical to your business survival you need to evaluate your profitability or institute a restocking fee.  Amazon doesn't refund shipping all the time either and no one says quit using them.

[makabet]

Hi!
It's only a few days until Square jacks us on return/refunds.

How are you informing your clients or customers? I'm probably going to put a sign on my table, "Note: In the unfortunate event a refund is needed, if you pay with Square or Paypal, your refund will be short the processing fees, as these companies no longer include those with refunds. Contact them with any complaints, as I'm a small business owner and can't afford to eat getting charged twice."
I'll try to make it more friendly and less resentful though. Any thoughts from the rest of you?