When you refund directly back to a client’s credit card that they made the original purchase from, the refund will usually be successful, but they can sometimes fail due to various reasons. Other times you may be requested to do a refund to a different card because it was blocked due to fraudulent activity or was lost.
This article outlines these scenarios and provides information on the next steps to try.
Once you trigger a refund it will try and take those funds from any money that is already with the payment processor. If there is not enough income on that day to cover the complete refund amount, the payment processor will then take any remaining amount needed from your bank account to cover that refund. e.g. if you only have $500 income on the day and there was a refund for $1200, it will use the $500 and then take an additional $700 from your bank account to cover that refund.
Successful refund
Upon a successful refund you will see a Refunded status to show that the refund was successful. Please note that refunds are submitted to the customer’s bank immediately, it depends the bank’s processing time on how quickly the refund will appear. Also note if a refund was issued shortly after the original charge, it may appear in the form of a reversal instead of a refund.
All refunds can be viewed from the Sales menu > Refunds tab > select the desired filter criteria, and each refund record also appears in the client’s History tab.
Failed refund
If a refund has failed, a general message will appear below the Refund failed status to show you what might have gone wrong.
In the below example, the refund was declined by the customer’s bank. This normally occurs when the credit card has been blocked and the funds are unable to be returned.
There are several steps you can take to troubleshoot this:
Steps
Contact the client and confirm that their credit card is still valid. Sometimes they no longer have the card they used for the purchase or it’s expired, so the refund has failed because this card no longer exists.
If they have a new credit card, you can:
Update the client’s credit card number on the client record
Click on the Retry button again within the refund. This is the best option as it prevents credit card chargebacks (ie. bank transaction disputes).
If the refund does not go through, then the money is returned to your business via the Payout Report. In this case, you'll need to:
Transfer the refund manually to them (e.g. cash/bank transfer etc)
Adjust their account balance manually to reflect that the refund was given
Mark the refund record as manual processed (click the Mark as Manually Processed link)
Refund to a different card
If a client no longer has the card they made the original payment with, try doing the refund as per normal first because often the issuing bank will keep the same customer account linked to the new card. This means, go to the original transaction and trigger the refund from there as outlined in Refunding a booking or course or Refunding a product sale.
If that refund doesn't go through though, you will need to do a generic refund and organise to transfer funds via bank transfer or another manner. Please refer to Processing a generic refund for more details.