You issue a refund. The customer gets their money back. Everyone’s happy, right?
Not exactly, because Stripe keeps its cut. Even if the transaction is reversed.
If you’ve ever been confused or frustrated by Stripe’s refund fees, you’re not alone. Many merchants don’t realize that the processing fee doesn’t come back when a refund is issued. This blog breaks it down: what the fees actually are, how Stripe’s policies work behind the scenes, and what you can do about it.
What Are Stripe Refund Fees?
When you issue a refund on Stripe, the customer receives their payment back. But Stripe does not return the processing fees that were deducted when the payment first went through.
Here’s how it works:
Stripe charges a fee on every successful transaction—typically 2.9% + 30¢ for most U.S. cards. If you later refund that transaction, Stripe returns the customer’s money, but keeps the processing fee.
Example:
You sell a $100 item. Stripe takes $3.20 (2.9% + 30¢), so you receive $96.80.
If you refund the full $100, you’re out the full amount, but Stripe keeps the $3.20.
So you’re down both the product and the fee.
When Do Merchants Pay Refund Fees?
Stripe doesn’t charge an extra fee to process a refund. But they don’t return the original fee, which is often misunderstood.
This policy applies whether the merchant:
- Refunds a transaction voluntarily (e.g. customer changes their mind)
- Issues a partial or full refund
- Refunds after a dispute is resolved in your favor
The only exceptions are disputes you win, but even then, Stripe may not refund processing fees unless the chargeback is reversed completely.
Why Does Stripe Keep the Fee?
Stripe (and other processors like Square and PayPal) argue that once a payment is processed, their service has already been rendered. The fee covers:
- Interchange fees to card networks and banks
- Fraud prevention and payment verification
- Infrastructure and API services
Those costs aren’t reversed just because a customer wants their money back.
This policy has become more standard across the industry in the last few years. Previously, Stripe refunded the full processing fee, but they changed that in 2019 for most users.
Refund Fee Changes for IC+ Pricing
Some businesses using Interchange Plus (IC+) pricing might see slightly different behavior. Stripe’s help docs note that with IC+, some interchange costs can be returned if the issuing bank refunds them, but this is inconsistent and often partial.
If you're unsure which pricing model you’re on, you can check in your Stripe dashboard under the billing settings or ask Stripe support directly.
How to Reduce the Impact of Stripe Refund Fees
You can’t eliminate Stripe refund fees entirely, but you can take steps to reduce how often you eat them.
1. Prevent Unnecessary Refunds
- Set clear return policies
- Use product photos and descriptions that match reality
- Offer store credit for returns instead of direct refunds
2. Use Partial Refunds Strategically
If you only need to refund a shipping fee or part of the order, you won’t lose the full processing fee—just a portion.
3. Consider Alternative Payment Methods
ACH transfers (via Stripe) tend to have lower processing costs. If you deal with high-ticket items, offering ACH can reduce losses when refunds happen.
4. Raise Prices Slightly to Account for Refund Losses
This won’t work for every industry, but if refunds are frequent, building a small buffer into pricing can offset losses from non-returned fees.
5. Switch to a Refund-Friendly Processor (If It’s Worth It)
Some payment processors still offer full fee refunds on returned payments. Stripe’s ease-of-use often outweighs this downside, but it’s worth evaluating alternatives if your margins are thin.
Frequently Asked Questions about Stripe Refund Fees
Does Stripe charge an extra fee to issue a refund?
No, Stripe does not charge an additional fee to refund a payment. But they keep the original processing fee, which means you're still losing money.
Can I get the Stripe fee back if I refund a fraudulent charge?
If the payment was fraudulent and you refunded it before a chargeback, the fee still isn’t returned. If it turns into a dispute and you win, some platforms may return it, though Stripe usually doesn’t.
What about refunds on subscriptions?
Same rules apply. If you refund a subscription charge, Stripe keeps the processing fee. You might also need to handle proration depending on how your billing is set up.
Are ACH refunds treated differently?
Yes. ACH transfers processed via Stripe come with different fee structures, and some costs can be lower. Refunds are possible, but processing times are slower, and failure rates slightly higher.
How can I see how much I’ve lost to refund fees?
You can export payment and refund data from the Stripe dashboard. Look at the total refund volume vs the fees retained—Stripe doesn’t break it out automatically, so you may need a spreadsheet to analyze it.
Final Thoughts
Stripe’s refund fee policy may seem small at first, but for businesses with frequent refunds, the losses can add up fast. Knowing how the policy works—and how to minimize its impact—can help you keep more of your revenue. While Stripe offers incredible developer tools and a smooth UX, its fee retention on refunds is a cost worth tracking.
Refund Fees Burning Your Bottom Line?
If your business issues a lot of refunds—or if you're frustrated by Stripe’s non-refundable fees—it might be time to level up your payment operations. Chargeblast helps modern teams streamline chargeback prevention and reduce losses tied to disputes, failed payments, and yes, even refunds.
Want to see how smart alerts and dispute intel can make a difference? Request a demo below or try it yourself. Let us show you how to stay ahead of the refund curve.
