Refund Definition.
A credit the merchant sends back to the customer’s card or account after settlement. It is a separate transaction, not a cancellation of the original one, and it posts within 2 to 5 business days. The golden rule: refund to the original payment method. A refund sent separately by bank transfer does not stop a chargeback from succeeding, and the merchant ends up paying twice. The refund’s ARN serves as evidence if the cardholder disputes the charge.
See also
Where this term appears
GuideThe role of banksGuidePayment regulationGuideAgents, distributors, and banking-as-a-service: who is liable for whatGuidePayments in GermanyGuidePayments in AustriaGuidePayments in the BalkansGuidePayments in the Netherlands and BelgiumGuideProtecting customer funds, and what happens when the institution failsGuideThe PSD2 framework contract and conduct-of-business rulesGuidePayments in Germany, Austria, and SwitzerlandGuideWhat a payment service provider must reportGuidePayments in Central and Eastern Europe