CC Processing and Refunds Question
 

Here's a question to all Credit Card Processors:

My customer buys a service from me for $100 for which I pay a 10% fee ($10) to my CC processor. The customer is not happy with the service, so I refund the $100 to him. No problem.

Does the Credit Card processor keep the 10% fee ($10), or is that reversed as well? My assumption is that the fee is reversed.

I can only speak for CCBill, and the formula that is used to determine fees is Gross-Refunds = the amount that the fee is based on

...so you are correct

Yeah thats correct pritty much accross the board for all processors.

Thanks for the replies. Anyone else care to comment?

Yes, you are correct. What you can do is use a Credit Card processor that will have lower fees, not the 10%, as you say.
But still, you are right about the refund.

Check your contract, it may depend. Most all of the legitimate IPSPs charge you on net sales, but if you are using a merchant account then you are charged for authorisation attempts usually whether or not they go through, then you'd pay your discount rate only on good transactions.