Not sure about refunds, but they get a 3% or so charge for credit card processing. Was that a $10,000 gift card?

It was $4000. So if the shop was charged 3% by the credit card processing company then that actually would be over $120. That seems like a lot. They really charge that much?

which shop? so we can avoid

Question: How is this Credit Card transaction different from others in which full refunds are always implemented with no "processing fee" ?

which shop? so we can avoid

My partner very nicely bought me a gift cert for a local bike shop to buy a bike. When she bought it she told them I might have another bike in mind and if so could she get a refund. They told her that yes they would credit her card back and they said there would probably be a processing fee. She didn't ask for the details of the fee which yes, was a mistake. I didn't want to buy a bike from that shop so she asked for a refund and had some hassles finally getting one, and then was told that the processing fee is $100. She complained that it was too much and they said "well we have to make something off of this". Really all "this" involved was charging her card and then a month later refunding her card.
We are in CA and there is a law regarding gift certificates that says:
Q.4. Can the holder of a gift certificate or gift card redeem it for cash?

A. This depends on the policy of the seller. The gift certificate law states that a seller must either redeem a gift certificate or gift card sold after January 1, 1997, for its cash value, or replace it with a new certificate or card at no cost "

Does anyone know whether this applies in this case? I can understand a fee to cover any credit card transaction fees they might have incurred, but I would assume that is a lot less than $100. Also am I right to think this is ridiculous? I felt bad not buying a bike from them after she went to all the trouble, but now with this experience I'm glad I didn't.

Actually the retailer probably got hit with the fee for the refund transaction as well. Credit card companies never lose money.

Why would they get dinged on the refund? That makes no sense.

Also, my airline miles earned are taken away when there's a refund, why would the shop still be paying the fee?

I always wonder...how long before people with your attitude have no stores at which to shop, other than online?

John

If you are spot on with the quote from the LBS, it sounds like everyone is looking at this from the wrong angle talking about credit card fees. IMO "well we have to make something off of this" implies that they are looking to profit from the situation. Not that they are trying to recover credit card fees lost in the transaction and then subsequent refunding.

It's not different.....but a company like a LLBean or Zappos or any other large retailer that provides a lot of refunds will have a much different deal with a Visa or MC than a small independent bike shop. And whatever the deal is.....whether they pay a fee or not for providing refunds is built into the cost of business. In this case, if it is a small independent bike shop......they probably got charged.

I would read the "have to make something" as having to make something to cover the CC fee they are being charged.....and not making a profit on something like this.

Transaction fees are typically refunded by the cc company, so the bike shop is a worst out some swipe fees ($0.30 x 2 ...so less than $1). IMO they are trying to profit a bit off this which is stupid when you have a local customer who is willing to drop thousands at your shop.

Look at it this way, if you'd bought merchandise at the shop and then returned it unused there would be no fee.

^^^^^^^^THIS^^^^^^^^