We just issued credits for a merchant assuming that the default behavior would be that the credits aren’t deducted from our account until they’re actually used by the merchant to offset charges.
However, we just found out from support that the credits are immediately deducted, which presumably means that we lose the amount we credited even if the merchant never uses those credits (e.g. if they uninstall). Is this actually how it works?
If so, we need a way to revoke the credits. It’s completely unacceptable that Shopify would pocket the entire amount of the credit in the case that the merchant uninstalls the app. It’s not at all obvious that credits work in this way and unacceptable that we could lose a significant amount of money just by issuing a refund to a merchant.
Please advise on how we can resolve this situation ASAP - thanks.
1 Like
This is one reason I refuse to issue credits. I will only issue refunds (or partial refunds if needed) after payment has been received.
Those credits are for the merchant to use on anything, not just your app. So they can absolutely uninstall and use it towards anything on their Shopify invoice.
I genuinely think credits are a way for bad actors to scam apps.
I’ve had quite a few merchants install, complete the trial, and then ask for a refund without paying. You can’t refund something that hasn’t been paid. Shopify’s solution is to issue a credit. But that means the app fee is deducted from my account and they receive the credit to their invoice. Why would the cost be deducted from my payout if I never received money from them? In my case, I wish there was a way to cancel the charge rather than a credit - but I digress.
My recommendation is to contact Support and see if they will reverse the credit for you. But expect it to take time as it has to go to their billing department.
1 Like
Wow, this is interesting and should definitely get fixed. I thought it worked like what you said, where they don’t deduct the amount from your payout if the merchant’s credit card payment never went through and simply cancels the pending charge.
We had a request recently as well where the shop looked suspicious. The shop was very new and signed up for the highest plan, used the app once, waited 1 day after the free trial ended, then uninstalled. Then asked for a refund, which we can’t issue because his payment never went through (his card was getting declined).
He contacted Shopify support, who suggested to ask the developer to issue an app credit instead to “reverse” the pending charge, which we did.
But now that you mentioned this, I’ll have to go through our transaction history to see if we basically ended up paying the merchant with an app credit when they never actually made any payment.