A quick guide on refunds for merchants

  • the merchant’s refund policy,
  • the time it takes for the consumer to return the product.‍

Why should refunds be processed through the original payment method?

It’s advisable, if not obligatory (depending on your processor) for merchants to refund customers using the same payment method that was originally used. This is for good reason — it defends the merchant from abuse by money launderers.‍

PayPal refunds

If a customer wishes to be refunded, they must contact the merchant first in PayPal’s Resolution Centre. If the merchant refuses to process the refund, the customer can raise a claim in which case PayPal is asked to investigate the situation and decide the solution.

How long do PayPal refunds take?

A customer can request a refund up to 180 days after the day of purchase. The customer also has the chance to receive a refund immediately, providing the “cancel” button is visible next to the payment information.‍

Credit and debit card refunds

Card refunds are slow and expensive. The reason why they are so costly and time-consuming is due to the high number of intermediaries in both debit and credit processes.

How long do card refunds take?

Card refunds can take up to 10 working days. For a card payment to be processed, the acquiring and issuing banks need to approve it with the payment supplier working as the intermediary.

Buy Now, Pay Later refunds

Buy Now, Pay Later (BNPL) refunds depend on the provider, but they all advise the customer to contact the merchant first. Looking at the most popular BNPL providers in the UK (like Klarna and Clearpay),‍

  • the refunds depend on whether the customer paid for the product fully or partially; and
  • the refunds are always subject to the merchant’s refund policy.‍

How long do BNPL refunds take?

BNPL refunds can take up to 2 weeks to be completed. It can also take extra 5–7 business days for the funds to be processed by the bank and be visible on the customer’s account.‍



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Citizen enables instant, cardless, account-to-account payments via their payment solution platform, PayBlox. https://paywithcitizen.com