Refund Policy


Refund Policies are a deliberate set of plans of action set by merchants regarding refunds to their customers for goods or services received if either is unsatisfied with the transactions that generated said good or service sales.

Often, refund policies seek to appease both parties and address most sales dissatisfaction conflicts which may arrive after common sales. Merchants decide exactly how and to what extent they can guarantee their products or services to credit cardholders. Ultimately, refund and return policies that are open, liberal and favor the customer can greatly reduce the number of chargebacks that a merchant receives and therefore keep them in business.

The very best tools for avoiding a chargeback is largely available to brick-and-mortar merchants. Retail businesses can perform regular certain actions that will virtually prevent all chargeback’s. These merchants usually swipe the customer’s credit card through a processing terminal. They can also secure a signature on that receipt at the time of the sales transaction. All of these methods verify that the customer, merchandise, merchant and credit card were all present and in working order at the time of sale, which is difficult to dispute.

A chargeback takes place when a customer contacts a credit card-issuing bank to initiate a refund for a purchase of a good or service that they made with their credit card. The reasons why chargebacks arise can vary greatly but generally, they are the result of a customer who is dissatisfied with their purchase. The customer may or may not have contacted the merchant about remedying this situation ahead of time. The customer may even be completely wrong in their assessment of the transaction. The responsibility indeed falls to the seller, however, to ensure that the transaction goes smoothly and that the customer is truly satisfied. A failure somewhere within the fulfillment process, including at the customer service level, can lead to a chargeback. And this is where refund policies should be clear to describe exactly what customers are entitled to through the merchant.

Merchant refund polices should always indicate reasons for chargebacks and their remedies. The awareness made by the merchant for the customers may prevent disputes that later arise.

Chargebacks can fall into any of five different categories: Point-of-Sale Processing Errors; Potential Fraud; Customer Dispute; Post-Transaction; or Authorization-Related.