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.
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.
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.
It’s a major shock that app credits can’t be revoked. I just encountered a glitch in the Shopify Partners dashboard when trying to send a credit to a store that led to the store getting 2 free months of usage (despite this being their 1st month).
The credit did not appear at first, so I sent another one. After some time, both appeared. I don’t understand how credits can even be issued to an amount greater than what the merchant owes.
Even worse, the credits can’t be revoked, so I can’t rectify the situation, and lost money for… Nothing.
Good news! Shopify has updated how app credits work.
We’ve encountered the same issue a couple of times and were just as frustrated by how credits were handled. However, Shopify has since changed the process.
App credits are now applied directly to open pending app charges instead of being deducted immediately from the developer’s payout.
Shopify Support has confirmed this change, but it would be great if someone from Shopify could officially confirm it here as well.
This is great news! Would indeed be great to have an official confirmation from Shopify.
I actually feel application credits are completely unnecessary now since we can issue either full or partial refunds via the Partners Dashboard. It would be nice if we could just see the upcoming/pending charge on the charge details page and just have the option to cancel it or adjust the amount.
In the past, the refund option wasn’t available and issuing app credits was done via the API (which required the app to be installed). So back then the app credit option did have a use case if the merchant was ok with a credit for future purchases instead of a charge reversal (which used to involve escalating to Shopify’s Billing team).