Payment Processing · Buyer guide
Refund a $100 sale and the customer gets $100. You get the sale reversed, the goods back if you are lucky, and a processing fee that stays exactly where it was. Every large flat-rate processor in the United States now says so in its own documentation: Stripe, Square, PayPal, Shopify Payments, WooPayments, Wix Payments, Squarespace Payments and GoDaddy Payments all keep the fee from the original charge. Most of them also say there is no separate fee for issuing the refund, which is true and beside the point. The fee you already paid is the cost.
What none of those pages explain is what happens on the other side of the refund. The card networks publish it. Visa's and Mastercard's interchange schedules both carry rates for refunds, and on a consumer credit card the money flows back from the card issuer to the processor's bank. On a debit card the rate is zero. So the processor that keeps your $3.20 gets most of its own wholesale cost back on a credit refund, and gets nothing back on a debit refund. Here is what each processor says, what the networks' own tables say, and the two things you can do about it.
All figures are from the processors' published pricing and help pages, read on 20 September 2026, at the standard US rate for the transaction type shown. The grade in brackets is our review grade.
The interchange-plus processors are no different on the headline rule, and one of them charges more.
Two point-of-sale systems publish the mechanics but not the money. Clover (B) will void a sale for 25 minutes after the transaction; after that, 'Clover processes it as a refund'. Toast (B) says to void a payment processed today and refund one processed yesterday or earlier, and will only refund a captured payment within 90 days of the charge without a call to its payments team. Neither says in public whether the original processing fee comes back, and since both are sold through resellers on negotiated rates, the answer is in your agreement rather than on a web page.
Stripe's explanation for keeping the fee is that 'banks and card networks keep the entire upfront cost of a refunded transaction' in many cases. Square's is that it 'does not recoup in full' what it paid. Both statements are carefully worded, and the networks' own rate tables show why.
Visa's US interchange schedule, effective 18 April 2026, lists 'Credit Voucher' rates, a credit voucher being the network's name for a refund. For a consumer credit card at an ordinary shop the rate is 1.76%; at a mail, phone or e-commerce merchant it is 2.05%; on a commercial card it is 2.35%. The line that matters most is the shortest one: 'Credit Voucher—Debit 0.00%'. On the equivalent table for foreign-issued cards the schedule spells out the direction, 'Interchange payable from issuer to acquirer', and that is the way a credit voucher works: the bank that issued the card pays interchange back to the bank that acquired the sale. The statement auditors who make a living reading these tables, CardFellow and Verisave among them, describe it the same way, and both note that whether any of it reaches the merchant depends on the contract.
Mastercard's US schedule, effective 17 April 2026, does the same thing under a different name. It lists 'Consumer Credit Refund Group' rates of 2.30% and 1.75%, 'Commercial Refund Group' rates from 2.16% to 2.37%, and 'Consumer Debit Refund Group' rates of 0.00%. Its PIN debit table has a row headed 'Credits (Refunds/Returns)' at 0.00% + $0.00 for regulated and unregulated cards alike.
Put the $100 online sale on a plain Visa consumer credit card through those tables. The interchange on the sale was 1.89% + 10¢, or $1.99. On the refund, the issuer returns a credit voucher at 2.05%, or $2.05. The processor's wholesale cost on the pair is close to zero before the network's assessment and per-item fees, which sit outside the interchange schedule and which nothing in the public documents says come back. Against that, Stripe kept $3.20 and PayPal $3.48. On a rewards card the sale's interchange was higher, 2.50% + 10¢ for Visa Signature Preferred online, and the voucher still returns 2.05%, so the processor is out about 55 cents plus assessments. On a regulated debit card the sale's interchange was 0.05% + 21¢, or 26 cents, and the refund returns nothing, so the processor is out 26 cents plus assessments and keeps $3.20.
That is the honest reading of 'does not recoup in full'. On credit the processor recoups most of its cost; on debit it recoups none of a small one; and in every case it keeps a fee that was priced to cover a completed sale. The flat rate is not a per-transaction cost. It is a margin on your gross sales that does not shrink when the sales do.
A card payment happens in two steps. The authorisation puts a hold on the customer's funds and gives you an approval code; the capture, usually at the end of the day when the batch closes, tells the issuer to move the money. Cancel between the two and the sale never settled, no interchange was assessed, and there is nothing to refund. Cancel after the capture and you are issuing a new transaction in the opposite direction, which is what the credit voucher rates are for.
Every processor exposes the difference, under slightly different names and windows. Stripe's documentation says a cancelled payment costs nothing and recommends manual authorisation and capture for any business that refunds a lot close to the time of sale. Helcim's pricing page says to void before the batch closes. Clover gives you 25 minutes. Toast draws the line at today versus yesterday. PayJunction (B+) puts it plainly in its support centre: 'Voids are more cost effective than refunds (but only work on unsettled transactions).' If your business routinely takes payment before it knows whether it can fulfil the order, the cheapest change you can make is to authorise at checkout and capture on dispatch.
On a flat rate there is nothing to ask. The processor keeps the interchange credit along with its margin, and the pricing page says so. On interchange-plus the position is less settled, because the pricing model promises to pass network costs through at cost, and a credit voucher is a network cost running the other way. Some processors credit it; Helcim's page says the original fees are not returned; Adyen bills the refund. The auditors' advice is to look for the line on your statement, and if there is no line for refund interchange, to ask why. Our guide to reading a processing statement shows where the interchange section sits.
A refund is also not a substitute for a dispute. Stripe warns that refunding a bank-debit payment while the customer's bank disputes it can pay the customer twice, and lists a refund failure reason for exactly that case. The chargeback fees are a separate schedule, and a refund issued before the dispute lands avoids them; a refund issued after it lands does not.
For most businesses the refund rate is a rounding error and this is not the fee to pick a processor on. For some it is the whole calculation. A retailer with a 20% return rate on a flat 2.9% + 30¢ is paying processing on a fifth of revenue it never kept, which adds about 0.7 points to its effective rate on the revenue it kept, before a single chargeback. A business that authorises and captures in one step and cancels often is paying for refunds it could have voided. A business selling in several currencies through Shopify or Stripe is carrying exchange risk on every refund on top of the fee.
The fix is not a different flat rate, since all of them behave the same way. It is either a workflow change, so that cancellations become voids, or an interchange-plus contract that credits refund interchange, confirmed in writing before you sign rather than discovered on the statement afterwards. The processors' pages quoted above are the evidence. None of them hides the rule; they just do not volunteer what the networks give back.
