The real cost of providing credit card/pay later and refunds..

As with any online store that’s fairly new to the market, in this case a move into the retail space where Wholesale was all we provided for years, you end up learning a lot about how to manage payments, and access to payment methods for customers.

One of those is access to credit cards and pay later methods and the cost of refunds. While we are not always the least expensive, we provide access to products at competitive prices, and for in demand products we make it a point to under cut the competition. With that said when major vendors like Amazon and Newegg get shipments to sell themselves there is not much competing with them as the economy of scale, and manufacturer rebates only available to that class of vendors means you cannot compete on price.

We will always do our best, however one real cost we incur is the cost of credit card and pay later processing, it varies between 3-8% depending on the method used. With margins less than that for most products we sell, we pass a portion of that cost along.

The one challenge we recently ran into when processing an Affirm refund, is the real cost to us, which prompted a look at all payment methods.

The bottom line is we are not refunded credit and pay later processing fees, an example is that it costs almost $100 on the NITRO 7900 XTX when a customer uses Affirm and then wants a refund.

We are happy to continue providing the services we do, however we are making a policy change to not refund any processing fees that we will not be refunded. What that means is for credit cards (3%), and pay later (6-8%) we will be holding those. Paypal provides full refunds so that will be no problem. Changes will be made to the payment methods to clearly note that as well

Given the topic, and the frustration I would have as a customer if I didn’t understand, I felt the topic deserved a blog post. I know some will say it’s the cost of doing business however we are not high volume and do not carry margins that give us that latitude, I have cases of customers essentially reserving product by paying and then requesting refunds if they find something different. While I get the thought process it’s a serious burden.

Note this only applies to payment methods we do not get processing fees refunded from, namely credit cards and pay later methods. For Paypal, bank wire, BTC/ETH we do so those will be no problem.