Although most refunds should process successfully and your customer will receive their funds back within a few minutes, there are occasions whereby these may fail and a manual work around may be required. Please see below for the main causes of this and what remedies we suggest for each.
- Insufficient funds in the settlement account to cover the refund
- The customer has since closed the bank account from which they initially paid from
- The specific account type the customer paid from does not accept direct payments back into it
- The particular payment information received from the payer’s bank is either incomplete or invalid.
1. Insufficient funds
Should there be an attempt to process a refund and the settlement account does not hold sufficient funds to allow for it at that time, the refund will not proceed. Rather than show a declined attempt in the refund history on the payment, we’ll display a pop-up message to alert the user that a refund was not possible for that reason.
You'll either need to wait for further sales/payments to land in the settlement account, sufficient enough to issue your refund. Otherwise, if the refund is becoming urgent, you can top up the settlement account by manually paying in the funds needed for the refund. Bearing in mind that we completely sweep the funds in that account at the end of each day, so any refund would need to be issued before this time.
Otherwise, if you find you are often needing to top up your settlement account, any Admin user can set what we refer to as a reserve amount. This is a specified amount that you can elect to retain or “reserve” in the account, when we process the daily settlement payment/transfer at the end of each day. That way there is always a balance kept in the account should any refunds be required throughout any given day.
2. The customer has since closed their bank account
If a customer makes a payment from their bank account but then goes on to close this account, any subsequent refund that is attempted back to this account will not be successful.
Your customer should be able to clarify if this is the case. Unfortunately we will not hold the new bank account details to be able to issue the refund, so to refund the customer, you will need to request from them their new bank account details and look to issue a manual refund.
3. Customer paid from a non-standard bank account
It may be that the customer paid from an account that generally does not accept direct payments back into it, unless it includes specific details required for the allocation of funds. This is common for head office or generic savings accounts.
An example of this is the Santander Savings Accounts (09-00-00 / 00050005); which can only accept funds if the correct reference identifier is used, which allows the bank to allocate the funds to the correct customer account. Unfortunately our system does not generate the right reference number they require and it means our refunds back to this account will fail.
Unfortunately we will not be able to issue the refund in these cases, to refund your customer, you will need to request from them their specific bank account details and look to issue a manual refund using the appropriate reference identifier if required.
4. The payment information received from the payer’s bank is either incomplete or invalid
On the very rare occasion, we receive payments successfully however the customer's bank has failed to pass on all the relevant payment information or if they have, it’s in a format that is not standard in accordance with the Faster Payments Scheme. In these cases, as we do not hold the right account information, any attempt at refunding back to it will likely fail.
As part of every successful payment, the following information is passed on to us:
- The payment amount
- The bank sort code and account number from which the payment was made (00-00–00, 12345678)
- The name of the person who owns the bank account (payer name)
If the sort code or account number received is missing or in an invalid format (i.e. not exactly 6 and 8 digits respectively), the refund may fail to process. We have seen this with some payments that come via WISE for example, where payments may originate from an overseas bank account and not a UK bank account.
Likewise, if the payer name is missing or includes invalid (special) characters that our accounts provider does not accept, then this may too lead to the refund failing to process.
These cases may require further investigation by our team however it’s unlikely we’ll be able to manually correct these details so for a quicker turnaround that ensures your customer is refunded, we’d suggest contacting your customer and request their bank account details so you can process a manual refund direct to their account.
If the refund is unable to be processed after 60 hours, then the refund will be marked as failed in the merchant portal.
The status of a refund can be checked at any point using the Single payments tab in the merchant portal. Simply locate and select the payment you requested a refund for to see the refund history in the Refund tab.
If you have any questions regarding refunds or would like more clarification on why a refund may have failed, please don't hesitate to contact us.