https://bitpay.com/terms9. Refunds and Adjustments.
Refund Procedures. In the event that you wish to issue a refund to a purchaser, BitPay can handle this.
You can decide to issue a partial refund or the full amount of the initial purchase. You can also decide whether to issue the original amount of the invoice in  your local currency or in the number of Bitcoins paid. If you do not have enough funds in your BitPay account to cover the refund, BitPay may require you to deposit Bitcoins into your BitPay account to cover the refund to the purchaser. Any required currency conversion during the refund process will be calculated at a spot rate determined by BitPay, following the guidelines found here:
https://bitpay.com/bitcoin-exchange-rates.
Disclosure of Your Refund Policy. Merchants are required to have a clear refund policy for their customers. We recommend you refund the amount of the initial purchase in the currency in which the item was priced.
Purchaser Complaints. Purchasers filing complaints about a purchase will be forwarded to you for resolution. BitPay reserves the right to terminate accounts which receive excessive complaints.
The volatility shouldn't matter if they are putting pre-order funds into an escrow account like they claimed..
Are you saying that they put BitPay funds in an
escrow wallet and paypal funds in a separate
escrow account?
Or are you saying that they put both in the same
escrow account?
They said that all pre-order funds were segregated from their operational funds. They did not detail how many accounts were used. I don't see why it would be difficult to have BTC in a wallet at the same time they have USD in a bank account.
My point was that you don't know how the escrow was set up. If it was in USD, it would be unreasonable to expect BFL to repurchase the bitcoins to repay a customer that paid in bitcoins.
If they did the former then they shouldn't have volatility risks, but that doesn't change the fact that customers used BTC to satisfy the payment for products priced in USD.
You keep saying the product was priced in USD. There is clear photographic evidence of Bitpay providing a price in BTC. BFL's operational expenses are denominated in USD. It is only an awkward situation for BFL because they took the full price of the product at pre-order instead of a deposit.
BitPay displays the customer the number of bitcoins they need to send to satisfy a USD price.
BFL should have taken non-refundable deposits instead. Then there is no currency risk they need to hedge.
So you're saying that it was wrong for BFL to only offer refunds priced in USD? How the hell is that worse than offering no refunds at all?
If BFL took a 5% deposit that is non-refundable, that would be much better for the consumer. They are only risking 5% of their capital with BFL and BFL doesn't have to worry about currency risk.
BFL doesn't have to worry about risk refunding customers because they have the funds in escrow. BFL will refund based on the currency they used to price their products. The escrow does not need to be brought up again.
I really don't understand how you all can even argue this... BFL products are priced in USD on their pages. Bitcoin prices are calculated in a case-by-case basis based on the current USD exchange rate.
Yes. Why does that matter exactly? It doesn't matter to Paypal. Paypal uses the exchange rate at the time of purchase to calculate refunds. It doesn't matter to the customer what the product is "priced" in or how that price is calculated. If you accept gold bars as payment, you had better be prepared to refund in gold bars and not Zimbabwean dollars.
If I were to accept gold bars as payment for a product I priced in (something that is not gold bars). I would refund them back an amount equaling the price in (that something that is not gold bars) that they paid.
Gold is a bad example, because it can be expensive to ship and is not as easily divisible as bitcoin.
If someone came to me and asked me to send them the gold bar back after a ~10x increase in value of the gold bar... I would tell them to take a long walk off of a short pier.
IF
BFL generated unique bitcoin addresses to accept bitcoin for products priced in bitcoin
AND
BFL used paypal to accept varying USD amounts to satisfy their listed Bitcoin prices.
You might have a point.
Avalon seemed able to sell product in BTC. They delivered it too.
Alpaca stores in Peru post prices in Neuvos Sol, and I am able to purchase those products using my USD via Paypal, the exchange rate is calculated automatically based on the current day's exchange rate. When I ask for a refund, I get back USD from Paypal.
BFL could hav easily been able to sell a product priced in BTC, however they didn't.
BitPay allows the Merchant to choose what currency to base refunds off of. SEE TOP/BOTTOM.
The US Dollar is "legal tender for all debts public and private" and you will either receive bitcoin to satisfy the USD price on the invoice
OR
You will receive USD to satisfy the USD price on the invoice.
If BFL owed 200BTC back to a customer, they could send however many USD it would take to purchase 200BTC. That only works for customers in the US though. International customers might be pissed off (some countries have capital controls on other currencies)
They could refund in the amount of BTC a customer sent. But they don't have to. SEE TOP/BOTTOM.
If BFL fully intended to price their products in bitcoin then it would make sense for them to refund their customers in the bitcoin price, no matter which way the customers chose to satisfy the bitcoin price.
HOWEVER
BFL fully intended to price their products in USD therefore it would make sense for them to refund their customers in the USD price, no matter which way the customers chose to satisfy the USD price.
Do this (assuming you are from the US):
Go to an online store in England and find a product "priced in" GBP that accepts Paypal.
Buy the product, and pay for it with USD.
Ask for a refund and see if you get USD or GBP back.
(spoiler alert: you will receive USD back even though the price on the product page was in British pounds. The amount you get back should use the exchange rate at the time of purchase.)
@QuestionAuthority My entire post was typed using only one hand
SEE TOP/BOTTOM.
https://bitpay.com/terms9. Refunds and Adjustments.
Refund Procedures. In the event that you wish to issue a refund to a purchaser, BitPay can handle this.
You can decide to issue a partial refund or the full amount of the initial purchase. You can also decide whether to issue the original amount of the invoice in  your local currency or in the number of Bitcoins paid. If you do not have enough funds in your BitPay account to cover the refund, BitPay may require you to deposit Bitcoins into your BitPay account to cover the refund to the purchaser. Any required currency conversion during the refund process will be calculated at a spot rate determined by BitPay, following the guidelines found here:
https://bitpay.com/bitcoin-exchange-rates.
Disclosure of Your Refund Policy. Merchants are required to have a clear refund policy for their customers. We recommend you refund the amount of the initial purchase in the currency in which the item was priced.
Purchaser Complaints. Purchasers filing complaints about a purchase will be forwarded to you for resolution. BitPay reserves the right to terminate accounts which receive excessive complaints.
edit: made edits to save space, and answer last quote.
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