7 ms·

it was only a matter of time given that Stripe has a penalty too

CryptoBanker 4y ago
I fail to see why there’s a penalty for a refund. A chargeback would be one thing, but a refund is a totally normal business process
- kevinsundar 4y ago
  It costs Square money (card network costs) to refund a transaction. It's not a penalty, it's just costs associated with moving money. Even if the money is moving the other way, there's still a cost.
  - xp84 4y ago
    Definitely "The way it is" -- but it does seem greedy. All systems drift toward the greediest possible implementation, though, in the absence of competition or regulation mandating otherwise, of which we have neither.
- crazygringo 4y ago
  It's not a penalty, it's just a cost of using the network. If you use the credit card network not just once but twice -- once to process a purchase and then yet again to refund it -- you're using that infrastructure. It makes sense you'd pay for its usage. If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place at the end.
  - jedberg 4y ago
    > If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place at the end. Funny you should use that example. On toll roads you get charged in both directions, but I've never seen a toll bridge that had tolls in both directions. Usually the argument is that you really can't go any other way so the toll in one direction covers the cost of both trips. But I actually think you're right here -- most people won't make the "return trip" so it makes sense to only charge people twice that do.
    - __derek__ 4y ago
      > I've never seen a toll bridge that had tolls in both directions. Huh, I think I've only seen this once (the Tacoma Narrows Bridge). Other toll bridges I've driven have all had tolls in each direction, e.g., Ambassador and Blue Water Bridges to Canada, Lake Washington floating bridge. Maybe I need to start taking more bridges to nowhere!
      - jedberg 4y ago
        Interesting! I'll admit my sample size is limited to bridges in California, but at least in the Bay Area all the bridges only have tolls in one direction.
        __derek__ 4y ago
        That makes sense. It fits with the Tacoma Narrows Bridge, which connects Tacoma (urban economic hub) to the Olympic Peninsula (some small towns, mostly wilderness).
        dragonwriter 4y ago
        I suspect the Bay Area model is more common where the dominant traffic on a bridge is two-way commute traffic that can’t easily escape the toll regime for one side of the commute. In that case, one-way tolls reduce infrastructure and operating costs, and traffic impacts, of toll collection without any significant downside.
        duskwuff 4y ago
        The other half of that is a practical matter -- collecting tolls in both directions means constructing and staffing a larger and more complex toll plaza. It's hard to justify that expense unless a lot of tolls will go uncollected without it.
        dragonwriter 4y ago
        > The other half of that is a practical matter -- collecting tolls in both directions means constructing and staffing a larger and more complex toll plaza That’s part of what I waa getting at with “infrastructure cost”, yes.
  - potamic 4y ago
    By that logic they should charge by request volume, not by percentage of amount. As a matter of fact, there is no logic in pricing. Sellers will charge what they can get away with, buyers will pay what they can afford. And of course, it is always negotiable.
    - klodolph 4y ago
      That assumes that the cost is proportional to the number of transactions, and is completely uncorrelated to the size of the transaction, which doesn’t make any sense to me. Any costs due to risk will be larger for larger transactions.
      - potamic 4y ago
        Risk is almost always borne by the merchant or the bank, never the processor.
        crazygringo 4y ago
        But only a small portion of the interchange fee goes to the credit card processor. Most of it goes to the bank. How else do you think credit cards are able to do things like pay 2% rewards? So the argument still holds. Banks hold more risk on larger transactions.
    - falcolas 4y ago
      > And of course, it is always negotiable. Sweet. How do I negotiate with Amazon again? In reality, negotiation is a relic of a long gone era and flea markets. Buyer agency in general has mostly disappeared in modern transactions.
      - MereInterest 4y ago
        In principle, repeated choice of whether or not to use a specific product is a form of negotiation, where each choice provides information to the seller, who can then update their pricing accordingly. In practice, this is an extremely weak signal, is swamped out by market changes, assumes zero cost of switching, ignores network effects, etc. One of many reasons why I distrust economist’s assertion of fairness.
- __derek__ 4y ago
  Apparently merchants can avoid it with store credit: > Additionally, we offer a number of resources and tools to assist sellers in accommodating this change. Our Return Policy Guide & Templates provide sellers with guidance on how to create a return policy that best suits their business, while Square’s free eGift Cards can serve as an option for providing store credit to buyers with no additional processing fees. Meet the new boss, same as the old boss.
  - scblock 4y ago
    No one wants store credit.
    - __derek__ 4y ago
      Square wants more store credit. The more lock-in, the better.
  - deleted 4y ago
    [deleted]
- they4kman 4y ago
  A refund _is_ a chargeback – the only difference is who initiates it. Technically, any time funds are moved onto a card, it's called a chargeback. This is how one would load a gift card, for instance. When it comes to credit card merchants, a chargeback always dings a transaction fee, and the merchant may additionally tack on a chargeback fee. So a full refund process will incur two transaction fees, plus possibly a chargeback fee.
  - throwntoday 4y ago
    >Technically, any time funds are moved onto a card, it's called a chargeback. I've seen more companies offering a reverse debit now (not sure of the actual term). Is this not through a different mechanism? Funds are available instantly same as how they're drawn via debit vs credit.
  - dangus 4y ago
    I wouldn't say that a refund is a chargeback in terms of the common vernacular.
  - duskwuff 4y ago
    > Technically, any time funds are moved onto a card, it's called a chargeback. No, this is not true. The opposite of a charge is a credit.
RC_ITR 4y ago
Which is a great reminder for all the purchasers of SaaS or other business services on here: If the terms of one provider are noticeably different than the rest (and those terms have a directly measurable economic impact on the provider), it's marketing. It will likely get pulled as soon as the provider is at a large enough scale that they no longer need that marketing.
aveline 4y ago
Stripe doesn't refund the processing fee too. > Depending on your fee schedule, you may incur fees to refund a charge. Additionally, Stripe's processing fees from the original transaction will not be returned in case of a refund. https://support.stripe.com/questions/understanding-fees-for-refunded-payments https://support.stripe.com/questions/understanding-fees-for-...
- jkaplowitz 4y ago
  Stripe made this change recently, I believe. It looks like Square is following Stripe's change.

I fail to see why there’s a penalty for a refund. A chargeback would be one thing, but a refund is a totally normal business process

kevinsundar 4y ago
It costs Square money (card network costs) to refund a transaction. It's not a penalty, it's just costs associated with moving money. Even if the money is moving the other way, there's still a cost.
- xp84 4y ago
  Definitely "The way it is" -- but it does seem greedy. All systems drift toward the greediest possible implementation, though, in the absence of competition or regulation mandating otherwise, of which we have neither.
crazygringo 4y ago
It's not a penalty, it's just a cost of using the network. If you use the credit card network not just once but twice -- once to process a purchase and then yet again to refund it -- you're using that infrastructure. It makes sense you'd pay for its usage. If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place at the end.
- jedberg 4y ago
  > If you drive to work on a toll road and then drive back home along the same toll road, you still have to pay the tolls even though you wound up in the same place at the end. Funny you should use that example. On toll roads you get charged in both directions, but I've never seen a toll bridge that had tolls in both directions. Usually the argument is that you really can't go any other way so the toll in one direction covers the cost of both trips. But I actually think you're right here -- most people won't make the "return trip" so it makes sense to only charge people twice that do.
  - __derek__ 4y ago
    > I've never seen a toll bridge that had tolls in both directions. Huh, I think I've only seen this once (the Tacoma Narrows Bridge). Other toll bridges I've driven have all had tolls in each direction, e.g., Ambassador and Blue Water Bridges to Canada, Lake Washington floating bridge. Maybe I need to start taking more bridges to nowhere!
    - jedberg 4y ago
      Interesting! I'll admit my sample size is limited to bridges in California, but at least in the Bay Area all the bridges only have tolls in one direction.
      - __derek__ 4y ago
        That makes sense. It fits with the Tacoma Narrows Bridge, which connects Tacoma (urban economic hub) to the Olympic Peninsula (some small towns, mostly wilderness).
      - dragonwriter 4y ago
        I suspect the Bay Area model is more common where the dominant traffic on a bridge is two-way commute traffic that can’t easily escape the toll regime for one side of the commute. In that case, one-way tolls reduce infrastructure and operating costs, and traffic impacts, of toll collection without any significant downside.
        duskwuff 4y ago
        The other half of that is a practical matter -- collecting tolls in both directions means constructing and staffing a larger and more complex toll plaza. It's hard to justify that expense unless a lot of tolls will go uncollected without it.
        dragonwriter 4y ago
        > The other half of that is a practical matter -- collecting tolls in both directions means constructing and staffing a larger and more complex toll plaza That’s part of what I waa getting at with “infrastructure cost”, yes.
- potamic 4y ago
  By that logic they should charge by request volume, not by percentage of amount. As a matter of fact, there is no logic in pricing. Sellers will charge what they can get away with, buyers will pay what they can afford. And of course, it is always negotiable.
  - klodolph 4y ago
    That assumes that the cost is proportional to the number of transactions, and is completely uncorrelated to the size of the transaction, which doesn’t make any sense to me. Any costs due to risk will be larger for larger transactions.
    - potamic 4y ago
      Risk is almost always borne by the merchant or the bank, never the processor.
      - crazygringo 4y ago
        But only a small portion of the interchange fee goes to the credit card processor. Most of it goes to the bank. How else do you think credit cards are able to do things like pay 2% rewards? So the argument still holds. Banks hold more risk on larger transactions.
  - falcolas 4y ago
    > And of course, it is always negotiable. Sweet. How do I negotiate with Amazon again? In reality, negotiation is a relic of a long gone era and flea markets. Buyer agency in general has mostly disappeared in modern transactions.
    - MereInterest 4y ago
      In principle, repeated choice of whether or not to use a specific product is a form of negotiation, where each choice provides information to the seller, who can then update their pricing accordingly. In practice, this is an extremely weak signal, is swamped out by market changes, assumes zero cost of switching, ignores network effects, etc. One of many reasons why I distrust economist’s assertion of fairness.
__derek__ 4y ago
Apparently merchants can avoid it with store credit: > Additionally, we offer a number of resources and tools to assist sellers in accommodating this change. Our Return Policy Guide & Templates provide sellers with guidance on how to create a return policy that best suits their business, while Square’s free eGift Cards can serve as an option for providing store credit to buyers with no additional processing fees. Meet the new boss, same as the old boss.
- scblock 4y ago
  No one wants store credit.
  - __derek__ 4y ago
    Square wants more store credit. The more lock-in, the better.
- deleted 4y ago
  [deleted]
they4kman 4y ago
A refund _is_ a chargeback – the only difference is who initiates it. Technically, any time funds are moved onto a card, it's called a chargeback. This is how one would load a gift card, for instance. When it comes to credit card merchants, a chargeback always dings a transaction fee, and the merchant may additionally tack on a chargeback fee. So a full refund process will incur two transaction fees, plus possibly a chargeback fee.
- throwntoday 4y ago
  >Technically, any time funds are moved onto a card, it's called a chargeback. I've seen more companies offering a reverse debit now (not sure of the actual term). Is this not through a different mechanism? Funds are available instantly same as how they're drawn via debit vs credit.
- dangus 4y ago
  I wouldn't say that a refund is a chargeback in terms of the common vernacular.
- duskwuff 4y ago
  > Technically, any time funds are moved onto a card, it's called a chargeback. No, this is not true. The opposite of a charge is a credit.

RC_ITR 4y ago

Which is a great reminder for all the purchasers of SaaS or other business services on here: If the terms of one provider are noticeably different than the rest (and those terms have a directly measurable economic impact on the provider), it's marketing. It will likely get pulled as soon as the provider is at a large enough scale that they no longer need that marketing.

aveline 4y ago

Stripe doesn't refund the processing fee too. > Depending on your fee schedule, you may incur fees to refund a charge. Additionally, Stripe's processing fees from the original transaction will not be returned in case of a refund. https://support.stripe.com/questions/understanding-fees-for-refunded-payments https://support.stripe.com/questions/understanding-fees-for-...

jkaplowitz 4y ago
Stripe made this change recently, I believe. It looks like Square is following Stripe's change.