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Why a Refund Declines and What to Do About It
Why a Refund Declines and What to Do About It

Here are the most common reasons why a refund would be declined

Serena Edwards avatar
Written by Serena Edwards
Updated over a week ago

Why Your Refund Was Declined

If you have attempted to do a Refund and received a decline error, it means that the card issuer is indicating that the cardholder's account cannot accept a Refund. This can be frustrating, but there are a few common reasons for declines that you should be aware of.

  • First, the card account may have been closed. This could be due to a variety of reasons, such as the cardholder closing the account or the card expiring. In this case, the cardholder's payment method cannot be refunded.

  • Another common reason for a Refund decline is fraud. If the card issuer suspects fraudulent activity on the account, they may freeze the card to protect the cardholder's funds. Unfortunately, this also means that a Refund cannot be processed.

  • Some card accounts, such as prepaid cards, may not allow for Refunds to be made. This is typically stated in the terms and conditions of the card, so it's important to check before attempting a Refund.

  • Lastly, if the payment was charged back, it means that the cardholder disputed the charge and the funds were returned to them. In this case, a Refund cannot be processed as the funds are no longer available.

What to do about it?

If you receive a decline error when attempting a Refund, there are a few options for handling the situation:

  • Refund the customer via a paper check

  • Refund the customer on another payment made with a different payment method

It's important to note that if the customer's payment method was declined for a Refund, you will want to get a new payment method from them for any future payments (if applicable). This will help avoid any further issues with Refunds in the future.

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