Refunds and disputes
What happens to the community's balance in a refund and in a dispute (chargeback), why the debit is larger than the sale's credit, and why the platform fee is not returned.
In a refund, the buyer gets back what they paid. The amount comes out of your community's balance. The platform fee is not returned.
The same rule applies to a dispute (a chargeback), when the cardholder disputes the purchase directly with the bank: the disputed amount comes out of the community's balance, and on a sale in installments that includes the installment interest.
What it's for
- Understanding why the balance dropped more than the sale had added.
- Checking a Refund or Chargeback line in the statement.
- Deciding calmly before returning a sale.
How it works
Refund
A refund returns to the buyer the amount they paid, and that amount comes in full out of the community's balance, in a Refund line of the statement. The buyer gets the e-mail "Refund of US$ … for …", and the community, the notice "Refund issued".
The platform fee (6.99% + US$ 1.00 per sale) is not returned: it already paid for processing the payment and the rest of the sale. That's why a refund's debit is larger than the credit the sale left in the balance, whichever option Who Pays the Fees? has:
| Who pays the fee | The buyer paid | The sale credited | A full refund debits |
|---|---|---|---|
| Buyer | The price + the fee | The price | The price + the fee |
| Organization | The price | The price − the fee | The price |
In both cases, the difference between the debit and the credit is the platform fee.
A partial refund debits only the amount returned. The sale's fee is still not returned.
Dispute (chargeback)
In a dispute, the cardholder's bank gives them back the amount of the purchase, and that amount comes out of the community's balance, in a Chargeback line. The community gets the notice "Chargeback opened: …". On a sale in card installments, the cardholder disputes what they paid, installment interest included, so the community returns everything, interest included, even though the interest never went into its balance. The platform fee is not returned either.
To cover part of these cases, 4% of each card sale is held for 30 days (the Chargeback Reserve). See Balance and statement.
Who issues the refund
The dashboard doesn't have a refund button yet: to return a sale, contact [email protected]. When the refund happens, it shows up in the statement and in the e-mails as described above.
Examples with numbers
Why the debit is larger than the credit. A sale of US$ 100.00, with the fee paid by the buyer:
- the fee is US$ 6.99 (6.99%) + US$ 1.00 = US$ 7.99;
- the buyer pays US$ 100.00 + US$ 7.99 = US$ 107.99;
- the sale credits US$ 100.00 to the community's balance;
- a full refund returns US$ 107.99 to the buyer and debits US$ 107.99 from the balance.
In the end, the balance is US$ 7.99 lower than before the sale: that's the platform fee, which is not returned.
The same sale, with the fee paid by the organization. The buyer pays US$ 100.00; the sale credits US$ 100.00 − US$ 7.99 = US$ 92.01; a full refund debits US$ 100.00. Again, the balance is US$ 7.99 lower.
Common errors and how to fix them
| What happens | Why | What to do |
|---|---|---|
| The refund took more from the balance than the sale had added | The platform fee is not returned | That's expected: check the Refund and Sale lines in the statement |
| The available balance dropped without a payout | A refund or a dispute went into the statement | See Latest Transactions |
Frequently asked questions
Does Memberfy return the platform fee in a refund? No. The buyer gets back what they paid, the amount comes out of the community's balance, and Memberfy keeps the platform fee.
What if the buyer paid the fee? Same thing. The buyer gets back everything they paid, fee included, and that whole amount comes out of the community's balance.
How do I avoid disputes? Use clear product names (that's what shows on the card statement) and answer refund requests quickly: an agreed refund is better than a dispute at the bank.