Refund
A refund returns all or part of an amount already paid. Returning money and returning goods are separate processes.
What is a refund?
A refund is the full or partial repayment of an amount already paid. Its process and status depend on factors including payment method and provider. Returning goods and refunding money can go together, but they are handled as separate processes. A refund may also be needed without goods being returned. Cancelling a payment that has not yet been executed is another step again.
In a fictional craft shop, 3 kits have been paid for; before shipment, 1 kit is found to be unavailable. The planned workflow links the partial refund for that kit to the affected order line and original payment and tracks its status. Any stock correction is handled separately: no physical return receipt should be recorded for the kit that was never shipped. This keeps the movement of money and actual goods traceable.
Sources
Related terms
- ChargebackA chargeback reverses a card payment through a dispute with the card issuer. It follows a different process from a merchant-initiated refund.
- Payment service providerA PSP supports businesses with electronic payments. Payment methods, processing and additional services depend on the offering.
- Digital walletA digital wallet uses saved payment methods or a wallet balance for payment. Device support and the shop integration must work together.
- Buy now, pay laterBNPL enables a purchase with later payment or instalments. The customer’s payment plan and settlement with the merchant are considered separately.
- Pay by invoiceWhen customers pay by invoice, they receive goods or services and pay later by the agreed due date. The invoice and receipt of payment are tracked separately.
- Recurring paymentRecurring payments charge an authorised payment method at agreed intervals. Amount, payment attempt and service status remain separate.
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