Authorizations on Refunds Required as of April 2021

Apr 14th, 2021

Payment Processing

Multiple card brands now require that refunds go through the authorization process, just like sales, and receive an approval in order to settle and give the money back to the cardholder.  
There are pros and cons for you as a merchant. 

Pros:
Once a refund receives an approval code, cardholders should see refunds in pending status on their online credit card statement, like they do with sales. 
This increased visibility should reduce questions merchants get about the status of refunds. 

Cons:
Merchants now pay authorization fees on refunds, as well as on sales. 
The issuing bank can decline the refund authorization request. If this occurs, you need to be prepared for your options to get the funds due back to your guest. 

What to do if you receive a decline on a refund authorization request: 
Ascent still strongly recommends you ALWAYS refund initially to the exact same card as originally charged. 
In the rare case that the refund authorization is declined by the issuer, the merchant may:

•    process the refund onto a different card, preferably from the same card brand
•    refund via a different method (check, credit on future purchase, etc.)

To protect yourself from potential chargebacks, if you receive a decline on the refund authorization, we suggest documenting carefully:

•    Document receipt of a refund authorization decline on the card originally charged
•    Document the refund via another card or alternate payment method with a clear receipt acknowledged in writing (signature or correspondence) by the cardholder

Fill in the form to the right or reach out to info@ascentpaymentsolutions.com for more details. We are here to help.