Recent Questions Answered Regarding Credit Card Processing Fees on Refunds

Ginger HollowellCredit Card Processing/ Merchant ServicesLeave a Comment

In light of the COVID-19 pandemic, we have been receiving a lot of calls on this subject.

First and foremost, there should be no fees on the refund. If your processor is charging the percentage rate for refunds, consider a new processor.

Some have asked about getting a refund on the fees from the original credit card transaction. So, I thought I would give you some background that would be helpful to your understanding. As an example, out of a say a 2.89% charge on a keyed-in transaction on a website, about 2.49% goes to the issuing bank. If your customer had a Wells Fargo credit card, it would go to Wells Fargo. If your customer used a B of A credit card, it would go to B of A, and so on. The difference goes to the processor for servicing the account. The salesperson gets a commission on the .4%. It is the same scenario with the transaction fee. The fact is that banks aren’t going to give you back that money if the payment gets refunded. The processor can’t afford to cover it either. No processor will refund the fees from the original sale for this reason. And yes, you do end up losing the refund and you get stuck with the fee as well, but I hope this at least helps you to understand a bit more how it works.

I thought I would pass on a note I got back from an appreciative customer. It was so uplifting to me since we at Electronic Money Company work hard at being nurturing and having our clients’ backs.

“Thank you very much for your email. This is exactly what I wanted. I needed to better understand how this works. I don’t want any money back from you because you at your sales office earn it by refusing rate increases from the credit card processors. This email to me was worth more than a few dollars back. Thank you again for this explanation.” –  Sean Gallagher, Born 2 Bounce Party Rental

I have eight kids and am naturally nurturing. I can’t be anything else. Our whole team really does watch out for our clients. We all have the same value system. It is so nice to be appreciated for our efforts to do the right thing in our business, especially in an industry where these values are not necessarily the norm. If you run your business with these same values like we run ours, give us a shout to do a quote on your credit card processing.  Send a merchant statement to

Gingergaye Hollowell
President, Electronic Money Company