Cutting refund fees for online orders?

golfplayer224

For those running small online shops, how are you handling refunds without losing too much to card fees? We process ~2,000 orders/month and fees on refunds add up quickly. Are there lower-cost refund methods people are using, or ways to reduce those charges?

MattMattMattUK

https://forums.moneysavingexpert.com/discussion/6665693/cutting-refund-fees-for-online-orders

It is unfortunately just a cost of doing business. The only real way is to check all the payment processors based on the mix of orders you sell, average value, transaction type, etc. and then check which would give you the best deal, but one might offer lower cost refunds but their transaction fees are higher, in general they are all pretty much the same.

Archergirl

Why do you get so many returns?

neighbourhoodcat

We found a lot depends on the payment provider’s fee structure rather than the refund itself. Some keep the original processing fee even when you refund, others return part of it, so it’s worth checking the small print carefully.

Also worth looking at whether some refunds can be handled as account credits, exchanges, or partial refunds where appropriate, as that can reduce costs without affecting customers too much.

Unfortunately though, as Matt says, a fair chunk of it is just part of online retail now — especially with higher return rates becoming normal in some sectors.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6665693/cutting-refund-fees-for-online-orders

Some payment processors the charges for refunds are minimal or even none if you process it as a reversal of a prior transaction others keep the original fee and charge a refund fee on top.

Obviously you need to look at this in the round because you may find those with a better refund fees have higher fees on non-refunded transactions so once you're not locked into a contract get your current numbers and get/calculate costs from others to see what the fees will be… if the lock in is more than a couple of months with a new provider then ensure you do some what if analysis on costs too like if your sales were to double or half and if your rate or return increased or decreased.

The other consideration is trying to reduce the number of returns you actually get… for example many clothing sellers are now listing not only that they have a Nike and a Puma white t-shirt for sale in sizes S, M, L and XL but that the Nike tends to run large where as the Puma is true to size in the hope that someone can pick the right size from the get go rather than order two different sizes and returning one (or order 1 size then return it for a replacement of a different size).

Do you capture return reasons? Is there anything actionable there to try and reduce the number of returns with more pre-sale information?