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Credit card transaction fees?
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Can anyone who takes credit cards tell me if the merchant has to pay the credit card transaction fee, usually 2% to 3% if the money is refunded? I recently ordered all new appliances for my kitchen and forgot to put it on my Costco Visa, I had put down a deposit of $5k on another Visa, I want to have them refund the charge on the first Visa and I will pay for with the Costco Visa. They want to charge me 2% saying they don't get that back even if the charges are taken off. I am switching cards as the Costco Visa gives an additional 2 years warranty on anything purchased, I had forgot that when I ordered them.
Thanks.
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Re: Credit card transaction fees? [MacCTD] [ In reply to ]
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I think it makes a difference if they can void the transaction or refund it. I'm guessing you've passed the window of when you could void the payment.
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Re: Credit card transaction fees? [MacCTD] [ In reply to ]
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We take CCs using Square. When issuing a refund, purchase price and processing fee are both refunded.


edit: provided the transaction was completed less than 120 days ago.
Last edited by: gotsand: Oct 10, 17 5:21
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Re: Credit card transaction fees? [MacCTD] [ In reply to ]
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Typically yes, a merchant doesn't get the fees back for a refund. They usually would if they void the transaction. But after the transaction settles I don't think you can void - settlements are usually pretty quick (daily batches?). Similarly, if they refund someone and that person is carrying a balance, interest charges apply for the days that the charge was on the account. If the transaction was voided, no interest. Like the difference between annulment and divorce.

Square may refund everything since they typically charge more up front. But a typical merchant provider usually has different rules.
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Re: Credit card transaction fees? [racin_rusty] [ In reply to ]
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I would expect they would just refund it and then just charge the same amount to a different card. It has been about 20 days.
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Re: Credit card transaction fees? [MacCTD] [ In reply to ]
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MacCTD wrote:
Can anyone who takes credit cards tell me if the merchant has to pay the credit card transaction fee, usually 2% to 3% if the money is refunded?
Thanks.


Yes. If it's a same-day void, merchant doesn't get charged.
But if it's next-day or later (ie, the transaction has already posted), the processing company charges the merchant again on the refund
So it goes like this:

Day 1: can I pay by credit card?
Sure, we lose 3% but it's a cost of doing business.

Day2: oh damn, my wife yelled at me for using the wrong credit card. Can you refund it, and I'll use a different card?
Sure, we'll lose 3% on the refund, and lose another 3% running it on the 2nd card.
So we've lost 9% total --> just to accomodate you and your wife.

We run a small business.. yes, this happens. It is stupid and painful but we smile and chalk it up to 'customer service'.
Recent real-life example:
Can I put down a $1400 deposit? Sure. (lose 3% = $42)
(Few days later..)
Hey, know what? I changed my mind. I need my deposit back. (Process refund.. lose 'nother $42).
So we've lost $84 to someone who is not even going to be doing business with us.

For larger transactions, we are considering refunding by check rather than c'card.
Charging back to the customer would be nice, but a great way to lose the customer :(

Last point: c'card processing fees aren't 2%, for smaller merchants. If you know where I can get flat 2%, please post it here.
Last edited by: spookini: Oct 12, 17 7:21
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Re: Credit card transaction fees? [MacCTD] [ In reply to ]
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I would also check with the Costco Visa, I think if you use it in any part of the transaction, the warranty should apply. So it doesn't just need to be on the deposit.

~Brad
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Re: Credit card transaction fees? [spookini] [ In reply to ]
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Thanks for the insight, I don't feel so bad paying the fee to them as it was my screw up.
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Re: Credit card transaction fees? [bradword] [ In reply to ]
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I read some of the fine print on it and I believe they can prorate the warranty against the percentage paid. In this case I will just reverse the charges and pay 100% on the Costco Visa, the standard warranty is only 1 year so definitely worth the $100 charge to change it to get an additional 24 months without question.
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