A refund is a credit granted directly by a merchant. If a purchase is made with a credit card and then reversed, the subsequent credit can be made directly by a refund from the merchant. The same applies to cases in which a debit has been made wrongly. In this case, the debited amount can also be reversed by means of a refund.
Refund as an alternative to chargeback
A credit to the credit card can be made either by means of a refund or by means of a chargeback. With a refund, the money is simply paid back by the merchant himself. There is no cost to the credit card holder and the money is returned within a few days. If, however, the issuer is involved, the chargeback is much more complex. This chargeback procedure also takes only a few days, but the credit card holder incurs costs. The chargeback fees charged amount to between 20 and 60 euros per booking and must be paid by the cardholder. If there is the possibility of a refund, it is therefore a simpler and more cost-effective solution for crediting the credit card holder.
Refund for other payment methods
In principle, a refund is made via the previously used means of payment. This means that a Refund can also be made after a Paypal payment or a bank transfer. This means that the Refund after a Paypal payment must also be refunded to the Paypal account or, in the case of a bank transfer, to the customer’s current account. In doing so, the Refund recipient must not incur any fees. However, it may happen, especially after a shipment of goods, that the merchant deducts the shipping costs incurred by him from the Refund.
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