I believe (and I'm not BitPay either) that they ensure that the merchant and the seller get whatever is quoted in the 15 minute window - hence the reason its only valid for 15 minutes. So - if you buy a $75 printer @ 1 BTC - the merchant gets $75 and you pay 1 BTC, even if BTC rises or falls. I believe that merchants can also choose to denominate their account balance or a portion thereof, in Bitcoin minus the ~3% transaction fee. Of course, any merchant holding Bitcoin is effectively agreeing to take on the market risk (rises - great, falls - not so great). How BitPay handles refunds I am unsure...

I can't imagine the current trend is good for BitPay, WalletBit or any of the other payment processors. As a commodity; Bitcoin is great because the price keeps going up (for now...caveat emptor), but for merchants it must be off putting to see a complete lack of stability - unless you live in Zimbabwe of course. It would seem likely that the adoption rate by merchants might drop off somewhat until some sort of leveling out occurs.