Billing the vendor for refund fees is the biggest gripe I have. It is not only for the self-centered reason that it would affect my business – it is because it contributes to the consolidation of ecommerce to only a few select companies. It adds friction to consumer transactions with small businesses, causing consumers to become aggravated with these small businesses. It conditions consumers to believe it is easier to deal with large businesses that always seem to have a "cancel" button and easy-order-cancellation policies, opposed to the small businesses that just seem to make things hard and expensive for no good reason. This will contribute to the consolidation of ecommerce to a small number of multi-billion dollar players like Walmart, eBay, Amazon, etc. Allow me to explain:

If someone makes a purchase of a $1500 ultrasonic cleaner from me, and then realizes they made a mistake, I now have to tell them there’s a $43.50 restocking fee, even if they call me 2 minutes after they place the order. This will leave a disgusting taste in the customer’s mouth, but I have to do it, because I can’t expose myself to a $43.50 fee for something I have zero control over. That customer may eventually notice that Amazon, eBay, Walmart, etc, do not charge such a fee. The customer has no idea why – they just know dealing with Amazon means less friction. The customer will now utilize Amazon more.

Many will say that this is a dumb gripe. “If you don’t like it go somewhere else!” PayPal instituted this policy as well. They backed down temporarily after people made a stink about it, but months later continued forward with the policy. I currently use a merchant services provider that does not implement these fees, but for how long?

My time in my industry has taught me that companies will often wait for one “outlier” to make controversial reforms to their platform/products before doing it themselves. Whether it is gluing the battery inside of a cellphone, or adding strange fees to transactions. Once a profitable, anti-consumer move succeeds with the company not going out of business, it emboldens other firms to do the same.

My merchant services provider doesn’t charge this fee. Yet. But they saw Stripe charge it, and get away with it. They saw PayPal charge it and have another more profitable quarter. The outrage lasted a week, the increased profit lasted forever. “Gee, it isn’t a business killer after all. Maybe we should do it too!” will come up in corporate boardrooms across America.

Then, we’re left with a landscape where the only companies left in ecommerce who can offer customers friction-free order cancellations are Amazon, eBay, and Walmart. Who wants that? Yes, people can say “just absorb the fee if you don’t want your customers to be mad at you.” How? I am already competing as a dude with no outside financing with a trillion dollar company – I’m winning if I am making any sales at all! Now I’m expected to compete on price when I have to absorb fees when customers cancel an order?

Let’s say you manage to claw your way into a market by offering a better product, or after sales service on that product to the point where you can compete with Amazon. That is a miracle in and of itself. To then have to deal with a minefield of additional charges that your competitor doesn’t have to is just another nail in the coffin of small-business ecommerce.

I find it awful, and I protest using these services. I cut my exposure to paypal by about 95% and dodged a bullet in not signing up for stripe. I suggest the same to my listenership anytime someone brings up or mentions a merchant services provider that I know charges this fee. Even if they say it won't affect their business much because they do not deal with lots of cancellations, it is the greater implication I make them aware of. No one wants a market where the only companies with a free "cancel order" button on their site are eBay and Amazon.

Scott Galloway also has a lot of excellent content with arguments on breaking up Amazon. Whether or not one agrees with his solutions or assessments of the problems Amazon creates and how to fix them – it is clear that they are dominating the race. I am not suggesting that we hold Amazon back – just that we don’t purposely trip companies doing their best to keep up.