Square recently dropped an announcement about changes to their refund policy, starting April 11, 2023. This change aligns with industry standards and reflects the processing fees that Square incurs from their network and payments partners in refund instances. It’s also becoming increasingly common for companies and businesses to begin charging processing fee’s on payments via credit card (we’ll cover that another time though!) Regarding this change in refunds, don’t worry, we’ve got your back and want to ensure you’re in the know and ready to tackle these updates with confidence.
From now on, when you issue full or partial refunds to your cherished customers, Square won’t be refunding those processing fees back to your account. Yep, you heard it right! We know this change may throw a curveball your way, but fear not, we’re here to help you navigate through it like the rockstar entrepreneur you are!
To smoothly sail through these changes, we recommend giving your refund policy a little makeover. It’s time to let your customers know that refunds will be issued minus any processing fees. Clear communication is key to managing expectations and keeping everyone on the same page.
When you charge customers, you incur processing rates ranging from 2.9% to 4%. With the new policy, refunds will be processed without refunding the processing fee. This means you may need to adjust your refund policy accordingly, refunding the total amount minus the processing fee to avoid double costs and potential loss of revenue.
To mitigate the impact of processing fees, we recommend refunding the total amount less a certain percentage for processing fees, typically around 5-8%.
By implementing this approach, you can avoid bearing the full cost of the processing fee for refund transactions. It allows you to strike a balance between providing excellent customer service and managing your business’s financial sustainability.
Remember, every dollar counts, and ensuring that your refund policy aligns with the updated Square policy will help protect your profitability and maintain a healthy business operation.
At The Unicorn, we have implemented a 5% restock and processing fee to help offset this loss. This means 5% of the gross amount of a order will be deducted and the final balance, post deduction, will be refunded. Our terms and conditions have been updated to reflect this.
