I was reading this article on the register and after trawling 80+ comments had to weigh in with a response.

(Obviously this is all also relevant to Feathercoin)

http://www.theregister.co.uk/2014/04/22/whaddaya_mean_no_refund_but_i_paid_in_bitcoins_oh_i_see/

10% Volatility

I agree that a 10% change in the value of Bitcoin seems pretty large. This is mostly due to the fact its a reasonably new currency compared to any fiat version. I think we need to think about exactly what the benefits for the merchant might be in the refund scenario. Obviously this is relative to the cost of the transaction but for the coffee refund scenario a Â£2 cup of coffee paid for in bitcoin would cost less than a penny in fees where as if it was paid for via a credit/debit card it would cost the merchant (again this depends on the size of the retailer as the larger retailers can get better deals) anywhere in the region of 8p - 17p plus the monthly charges for renting the chip and pin machine and accessing the service. An additional charge would be a business bank account which has a monthly charge. Which is why lots of small retailers who sell relatively low value merchandise cant afford to offer digital payments at all and instead use cash. (which has its own costs such as collection by a security vehicle and again a business bank account.) So it is quite possible that 10-20% of the initial (non-bitcoin) transaction cost would be for the sole purpose of paying the banks for their service.

So if I bought a Â£2 coffee with bitcoin the merchant would have potentially already gained 10% profits (by avoiding the bank transaction "TAX") so would/should be willing to take the refund risk.

Also the (non-bitcoin) refund its self would have its own transaction fee doubling the already very high cost to the merchant.

Ive seen paypal mentioned but their fees are just as bad if not even worse at 20p + 3.4% per transaction.

This obviously does not cover every scenario as higher value purchases would have significantly lower transaction fees and therefore overall transaction fee percentages.