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Refund Holdback Sample Calculations

The following examples illustrate how the refund holdback is calculated for a non-BMVD Product.

Example 1: Refund of a single item from an order

Suppose you receive the following two-item order:

ItemA (item price) £300.00
ItemB (item price) £50.00
Delivery on ItemA £40.00
Delivery on ItemB £5.00
Gift Wrap on ItemA £5.00
Gift Wrap on ItemB £2.00
TOTAL £402.00

You then refund ItemA, including shipping and gift wrap (this is commonly done if the customer cancels the item before the order ships). Assuming the commission rate for items in this category is 15%, the initial holdback is calculated as follows:

Holdback for ItemA

= 20% x [ReferralFee x (ItemA+ShippingItemA+GiftWrapItemA)] = HoldbackRate x [CommissionRate x (ItemA+ShippingItemA+GiftWrapItemA)] = 20% x [15% x (£300+£40+£5)] = 20% x [15% x £345] = 20% x [£51.75] = £10.35

But as the holdback for this line item cannot be greater than £5, it is capped at £5. Note that other item-related charges, such as shipping and gift wrap, are included in the holdback calculation.

Example 2: Refund of multiple (different) items from an order

Suppose you receive the same two-item order as described above, but this time you refund the order in full, including shipping and gift wrap (this is commonly done if the customer cancels the order before it ships). The initial holdback calculation applies to each line item in the refund, as follows:

Holdback for ItemA

= HoldbackRate x [CommissionRate x (ItemA+ShippingItemA+GiftWrapItemA)] = 20% x [15% x (£300+£40+£5)] = 20% x [15% x £345] = 20% x [£51.75] = £10.35

Holdback for ItemB

= HoldbackRate x [CommissionRate x (ItemB+ShippingItemB+GiftWrapItemB)] = 20% x [15% x (£50+£5+£2)] = 20% x [15% x £57] = 20% x [£8.55] = £1.71

But as each of these holdbacks cannot exceed £5, the first is capped at £5 and the second is taken as is, for a total holdback of £6.71. Again, note that other item-related charges, such as shipping and gift wrap, are included in the holdback calculation.

Example 3: Refund of multiple quantities of the same item from an order

Suppose you receive the following three-item order:

ItemA (quantity: 2) £600.00
ItemB £50.00
Delivery on ItemA £20.00
Delivery on ItemB £5.00
Gift Wrap on ItemA £5.00
Gift Wrap on ItemB £2.00
TOTAL $682.00

You then refund both ItemA, excluding shipping and gift wrap (this is commonly done if the customer returns the items after the order has dispatched). Because the holdback calculation applies to each unique line item in a refund, and multiple quantities of a single item comprise a single line item, the calculation is applied one time for both ItemAs. Assuming again that the commission rate for items in this category is 15%, the initial holdback (before applying the £5 cap) is calculated as follows:

Holdback for both ItemAs

= CommissionRate x [HoldbackRate x (ItemAs)] = 20% x [15% x £600] = 20% x [£90] = [[price]]

As this holdback is greater than £5, it is capped at £5. Note that no holdback calculations apply to subsequent refunds involving this item because the £5 cap is already met.

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