Here's a cost most merchants never model: when you refund a sale, the original processing fee is not returned. You give back the full $100; the $3-ish the processor took stays with the processor. At a 5% return rate, that's a permanent tax on every refund — and it works the same way at essentially every major processor. This isn't a hidden fee; it's a published policy. It's just published where nobody reads it.
The policy, in one sentence: the fee stays
The industry logic, as Helcim's own documentation puts it: a large portion of the fees on a settled transaction go to banks and card networks, which are not returned on refund transactions — so the processor can't return what it never kept. Whether you find that convincing or not, the policy is uniform. Here's the table, each row sourced to the processor's own documentation:
| Processor | Refund policy | Source |
|---|---|---|
| Stripe | Original processing fees are not returned on refunds | Stripe via Squarespace support docs; Stripe's own refund documentation |
| Square | Processing fee is nonrefundable; refunds come entirely out of the merchant's funds | Squarespace support docs; Square community (merchant discussion of the policy change) |
| PayPal | Processing fee is nonrefundable | Squarespace support docs |
| Helcim | No interchange charged on the refund itself, but original processing fees are not returned | Helcim interchange-plus FAQ; Helcim Canada fee disclosures |
| Squarespace Payments | Fee is nonrefundable | Squarespace support docs |
Two things the table doesn't show but the fine print does: no processor charges an extra fee just for processing the refund action itself — Helcim states this explicitly in its fee disclosures. And on interchange-plus pricing, the network's interchange portion isn't re-charged on the refund; it's the processor's original cut that's gone.
What a refund really costs: the $100 example
Worked example: a $100 online sale at a standard 2.9% + $0.30 rate costs $3.20 in processing fees. The customer returns the item; you refund the full $100. The $3.20 stays with the processor. Your net on that transaction: −$3.20 — you paid for the privilege of giving the money back. At a 5% return rate on $20,000/month in sales, that's roughly $32/month in unrecovered fees, $384/year, before counting a single chargeback fee.
The same-day void: the fee you can still avoid
There is one escape hatch, and it's in Helcim's own FAQ: void the transaction the same day instead of refunding it. A void cancels the unsettled authorization before it becomes a settled transaction, so no processing fee is ever incurred — "to avoid paying processing fees entirely, you can void the transaction on the same day instead of issuing a refund." The window is the settlement batch: once the day's transactions batch out, a void is no longer possible and you're back to a refund with the fee kept. Practical rule: any mistaken charge or same-day cancellation gets voided, not refunded. Train staff on the difference — it's one button in most terminals and dashboards, and it's the cheapest button you'll ever press.
What to do if refunds are eating your margin
- Void, don't refund, same-day. Make it the default for errors and cancellations caught before batch-out.
- Know your return rate in dollars, not percent. Multiply monthly refunded volume by your effective rate — that's the annual cost of the kept fees. Most merchants are surprised.
- Price it in. If you run 8–10% returns (apparel, for example), the kept fees are a real cost of goods sold. Build them into pricing rather than absorbing them as surprise.
- Don't switch processors over this. The policy is identical everywhere — a processor switch won't recover a dollar of kept refund fees.
A note on structure: this is a policy explainer, not a repair procedure — the fee-keeping is uniform across the industry and there are no settings to change. The actionable part is the void-vs-refund distinction and the return-rate math.
FAQ
Does Stripe give the processing fee back on refunds?
No. Stripe's refund documentation states the original processing fees are not returned. Squarespace's support pages confirm the same for PayPal, Square and Squarespace Payments.
Is there a fee to issue a refund?
Generally no — processors don't charge extra for the refund action itself. The cost is the original fee you don't get back, not a new charge.
What's the difference between a void and a refund?
A void cancels an unsettled transaction the same day, before batch settlement — no fee is incurred at all. A refund returns money on an already-settled transaction, and the original processing fee is kept. Same-day mistakes should always be voided.