Square to no longer return processing fees when buyers are issued a refund (opens in new tab)

There are no laws against high processing fees; Afterpay takes around 8% for example.

I for one never carry cash, and I will happily pay any extra transaction fees from local businesses for the opportunity to reduce the size of my wallet, the cost/risk of casual theft, and the need to queue at an ATM for cash as part of my daily life.

I went to a Chase last week. They didn't have any cash. I filled out a withdrawal slip and finally found a teller. She just told me to use the ATM. I didn't have my card with me. That's why I went in the branch and used the withdrawal slip.

And on top of that there's so many businesses that just refuse to accept cash now.

Credit cards only seem like a good deal to consumers because it is hard to reason about n-th order economic effects. The profits these companies make are ultimately coming from all of our wallets.

When I built an event ticket sales site, we tried to get promoters to just raise their ticket prices a bit to include the 'service fees' so that end users got a single price, and they refused.

Promoters just want to advertise $25, not $32.50 (contrived example)... they don't care that the end user has to pay the additional fee. We did all of the math analysis and the end user total cost could have been lower, while the promoter got more money, with our method, but perception is king.

This also isn't just events, that is only one example. Any 3rd party merchant service provider is going to be affected.

Back when I had my events company, we went with WePay because they were the only service at the time that offered 'free' refunds. Eventually, it became the norm. Now it seems like this policy is getting reverted and that's going to have a large impact on merchant service providers.

Again, events was just an example. This applies to all services like this.

"Item Defective" - Unopened factory sealed, tamper-proof blister pack.

"Not Received In Time" - Delivered 3 days ahead of schedule.

"Too Small" - Item clearly says in multiple places, and even demonstrates in images, the item is 2mm in diameter.

The result? Everyone pays more for the products so we can support a few bad apples serially returning stuff.

This new policy from Square is going to stick merchants with an empty bag for all returns. Which ultimately will make merchants more careful, to avoid getting hosed, ie. raise prices for everyone to support a loss on a returned or cancelled transaction.

If a transaction is cancelled, or reversed/refunded - nobody should be making a profit. That includes Square, Visa, etc. This is just an absurd anti-consumer policy that small businesses (the only ones using Square) will get blamed for being greedy over.

While technically true, that statistic is misleading as it requires further qualification, namely that $100k figure only applies to shoppers in Costco's PNW area - not nationwide, and certainly not internationally.

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.

> 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.

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.