Hello @magellan12 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. I just consider this the cost of doing business, and this cost is used as a deduction to offset any tax liability for my profits.
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. I am unaware of any other processing companies that would refund the fee, but maybe another seller would be able to post their recommendation.
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. You could also establish a cash-only payment policy and require cash payments or check payment via invoice. While this can be extremely limiting for a business (as a business owner you know how your customers use/depend on their credit cards to pay), this would prevent the need for any fee payment associated with CC processing. Just be sure to maintain your cash reserves to cover any possible cash return that a customer may request (again, it's important to evaluate your return policies and be prepared for any event in those circumstances.)
There is no rule or law that says a business MUST accept credit cards; you as a business owner can determine the forms of payment you'll accept, but in doing so a business has to find a partner to work with for processing. Personally, I've found Square to be one of the best in helping me grow my business in so many ways. Other sellers may disagree and I do hope if they have a better suggestion for your question, they'll post any alternatives here. Good luck to you and your business, all of us in the Seller Community work really well together to support each other and only want all of our businesses to grow and prosper.
