Payments glossary
Refund
A refund is a merchant-initiated return of funds for a completed card payment, sent back through the original payment route to the customer's card. Unlike a chargeback, the merchant controls the decision and no dispute process or penalty is involved.
How a refund travels
A refund reverses a completed card payment through the same rails it arrived on: the merchant instructs the refund, it flows through the acquirer and card scheme back to the issuing bank, and the issuer credits the cardholder. Because it is a new instruction rather than an undoing of the original payment, the money commonly takes several business days to reach the customer's statement - a lag worth explaining at the moment of refund, before "where is my money" becomes a dispute.
Refund, void and partial refund
Timing determines the right tool. A payment that is authorised but not yet captured can be voided - the hold is released and no money ever moves. Once captured and settled, a refund is the correct instrument, and it can be full or partial: refunding R350.00 of a R1,200.00 order for a returned item, for example. Scheme rules require refunds to go back to the original card - a safeguard that also prevents refund flows being abused to move money to third parties.
Refunds as chargeback insurance
A refund the merchant issues promptly costs the transaction value and nothing more. The same grievance arriving as a chargeback adds a fee, administrative effort and a mark on the merchant's chargeback ratio. Fast, unambiguous refund handling is therefore one of the cheapest pieces of risk management a business can buy. LekkaPay's gateway supports full and partial refunds per transaction, by API or from the dashboard.
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