Let example.com be a shop on the internet accepting Bitcoin as payment system, along with USD payments.

In the context of a refund, the user gets back USD.

Now, Alice has, let's say some bitcoins, and she wants to convert them into USD. To bypass the conversion fees, she gets the idea to buy something with Bitcoin from example.com and request a refund/cancel the order, after the successful transfer is made.

Are there any conversion fees in this context? I know that when buying/selling BTC, there are some fees (same for general currency conversions). Are those bypassed in the described context?

I know it may not be quite ethical to do this, but I'm just wondering if this is possible and it ends with more USD in Alice's hands, compared to traditional conversions of BTC → USD (using some random service from the internet).

This, obviously, can be extended to the fact that if the Bitcoin goes down in the next few weeks, Alice can get the refund in the USD value she paid when she did the order. If BTC goes up, she keeps the product.


Although USD is valid for settling all debts, it is not required for settling all debts.

That I can determine (there have been other questions previously) there is no requirement for the merchant to repay with fiat, although in the example of one of the other questions merchants have been known to repay in fat instead to capitalise on a market rise.

  • In my case, the service does mentions that the refunds are in fiat. I’m not quite sure if I understand your answer... – Ionică Bizău May 23 '18 at 21:20
  • That probably means they determine the amount based on the fiat to avoid giving you a free option. You may, for example, wind up with a bitcoin payment based on the spot fiat price at the time you requested a refund or you may wind up with credit denominated in fiat. I doubt they actually give you back fiat. – David Schwartz May 23 '18 at 21:34

Besides the question if this would be an ethical or even a legal way of using a shop (which will heavily depend on the jurisdiction in question) it will all come down to the policies of the shop about refunds.

In other words: If you find a shop which does that, fine. But be sure to understand if they would refund purchases made in Bitcoin for fiat currency or vice versa and double-check the conversion rate they will apply to both transactions, i.e. the purchase and the refund.

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