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Refund

 

Refunds are always issued to the customer in the currency used by them in the order payment.

 

When you issue a refund, the following rules will be applied:

  • The payment method of refund is the same as that of the original order. The refund can’t be issued to a different card or bank account.
  • The refunds are issued in the same currency that the customer used in the order. If a customer pays in Euros, they will receive a refund in Euros as well.
  • If a currency conversion is required for a refund, the current exchange rate will be used for the conversion, not the exchange rate while placing the order. You will be charged a fee for currency conversion when converting the payment amount and it will not be charged when the refund is issued. Currency conversion fees and credit card fees will not be refunded when you issue a refund.
  • If you use an exchange rate manually, the current exchange rate will be used to calculate the refund.

 

Currency Risk

Because of the fluctuation in the exchange rate, the rate at the time of payment is usually different from that of refund. As a result, the conversion amount you receive for an order is usually not equal to that in your refund. You may lose money or make a profit from them because it involves currency conversion.

 

Example

You run a store that sells in USD or EUR and the payment currency is USD. A customer whose preferential currency is Euros orders a shirt for 85 Euros. At the time of payment, 1 Euro is equivalent to $1.18. When the customer pays for the shirt, the amount in Euro is converted to a payment amount of $100.



Product Amount received in the customer's local currency Received amount converted to your payment currency
T-shirt 85 Euro 100 USD

 

A few weeks later, the customer decides to return the T-shirt and you will refund the 85 Euro initially paid by the customer at first. But the current exchange rate fluctuates and 1 Euro is equal to 1.29 USD. Therefore, you must exchange $110, which is $10 more than the amount you initially received from the customer($100).

 

Product Amount received in the customer's local currency Received amount converted to your payment currency
T-shirt 85 Euro 110 USD

 

In  this example, you lose money due to the fluctuations in the currency exchange rate. If the exchange rate changes in the opposite direction(for example, 1 Euro equals to 1.05 USD), you will profit from it.

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