The importance of fast refunds during the holiday sales season

Last year, Cyber Monday became the biggest online shopping day of all time, with consumers spending $13.3 billion. Online Black Friday sales broke a record as consumers spent $10.8 billion. General holiday season spending went up by 10% compared to 2023. This all goes to show: in the lead-up to Christmas, retailers see sales volume surging. 

And with them, a sharp spike in refund requests. 

But while most businesses focus heavily on converting customers at checkout, many underestimate the role refunds play in retaining them.

A fast, reliable refund process closes the loop on a transaction, safeguarding trust, preventing disputes, reducing operational overheads, and protecting future revenue. 

Keep reading to discover all the reasons why speed matters when it comes to refunds. 

Why refunds can make or break loyalty

Today’s shoppers expect speed, convenience, and transparency from every brand interaction – including when something goes wrong. Over half (54%) of US consumers expect a refund within 24 hours. 

According to our latest Trust in the Digital Economy report, 33% of consumers say “no easy returns process” is one of the top factors that erodes trust and loyalty when shopping online.

That’s a third of customers who might think twice about purchasing again if they don’t feel confident about how quickly and easily they can get their money back. 

And it’s not just about convenience. In our recent survey, Peak Season ‘25: The debut of agentic commerce?, 19% of respondents in the US and UK said they wouldn’t trust an AI agent to purchase on their behalf because of concerns about “not being able to return or refund items easily.” That hesitation highlights how deeply refund performance impacts consumer confidence.

This data makes one thing clear: consumers now equate refund speed with brand credibility. If refunds take days – or worse, weeks – to reach their account, customers are likely to lose confidence. In other words, fast refunds go beyond operational efficiency into trust signal territory. 

When you process refunds quickly, you reinforce credibility and keep customers coming back, even when the purchase itself didn’t work out.

The operational reality for Heads of Payments

If you’re an enterprise merchant, the refund process can raise payment challenges. During the holiday season, when return rates are 17% higher than annual return rates, the limits of reconciliation systems, treasury workflows, and fraud controls are tested.

There’s no room for getting it wrong, though. Over two thirds (67%) of consumers say a negative return experience would discourage them from shopping with a retailer again. And 71% are more likely to choose a return option that offers an immediate refund or exchange. 

Fast, accurate refund capabilities help payment leaders manage this complexity efficiently. They also protect the business by reducing the risk of disputes. When customers don’t see a refund hit their account quickly, they’re more likely to file a payment dispute – leading to chargebacks, additional fees, and potential scheme penalties.

Each chargeback not only carries a fee but also contributes to your chargeback ratio, which card networks monitor closely. High ratios can result in fines or, in extreme cases, restrictions on payment acceptance. 

For global businesses, refunds can bring with them cross-border complexities, too. Almost a third (31%) of all global online sales are cross-border transactions. Processing and settlement timelines can differ by schemes and regions, and there may be a wider variety of payment methods to refund the money to.

Plus, not all businesses are equipped to handle the technical complexity and operational demand of regulatory and compliance requirements that allow them to process payouts effectively and timely. 

What’s the solution? 

Refund delays are often the result of outdated systems or fragmented processes that can’t handle real-time payment reversals at scale. Traditional refund methods rely on multiple intermediaries and batch processing, often creating time lags that frustrate customers and increase costs.

Checkout.com’s Fast Refunds capability, part of our Payouts product suite, enables you to send funds back to customers in near real time – often within minutes of approval (this requires the issuer to be fast-funds enabled). By using the same card networks that process payments, funds are returned directly to customers’ accounts faster than with traditional banking methods. 

This is particularly powerful during the holiday season, with the spike in last-minute returns and stock issues. Fast Refunds allow you to close the refund cycle quickly, freeing up working capital and staying ahead of customer expectations, while keeping chargeback ratios under control. Learn more about processing fast refunds in our documentation.

Fast Refunds can also be configured to handle partial refunds, helping you manage complex customer scenarios – like multiple-item orders or tiered product categories – without introducing friction or manual steps. 

Balancing speed, security, and scale

Of course, the pressure to move money faster comes with its own risks. The holiday season also brings an uptick in refund abuse and fraudulent refund claims – part of the wider trend of first-party fraud. Refund abuse is when customers falsely claim items were never delivered or attempt to exploit generous return policies. 

Refund abuse was the most common type of fraud experienced by enterprise merchants in 2024. Fifteen percent of men and 10% of women believe they would get away with refund abuse. In MENA, the percentage of the population who believe they would get away with refund abuse rises – it’s 27% in the Kingdom of Saudi Arabia, 26% in Egypt, and 25% in the United Arab Emirates. 

For enterprise businesses, refund abuse can seriously harm profits at scale. 

While it’s crucial to act fast, payment teams also need the right controls to ensure refunds are legitimate and tied to genuine transactions.

That’s where Checkout.com’s Fraud Detection Pro and Intelligent Acceptance solutions complement Fast Refunds. They help you maintain rigorous verification steps and fraud screening before funds are released, ensuring every refund request is validated against real transaction data. 

By combining advanced fraud analytics with real-time payout capabilities and transparent policies, you can strike the right balance between speed and security – delivering a smooth and trusted experience for genuine customers while safeguarding against loss.

For a deeper dive into how refund fraud compares to chargeback fraud, visit our friendly fraud vs. chargeback fraud guide.

How fast refunds support broader business goals

Beyond improving customer experience, faster refunds bring measurable financial and operational benefits. In addition to what we’ve already covered – lower dispute and chargeback ratios – here are some more examples:

• Improved cash flow visibility
  By accelerating refund cycles, you can reconcile funds faster and maintain clearer cash flow projections – critical during high-volume periods when every hour counts.

• Reduced customer support workload
  When refunds are processed instantly, customers spend less time chasing updates, freeing your support team to focus on complex queries and higher-value interactions.

• Enhanced loyalty and repeat sales
  Customers who trust your refund process are far more likely to return after peak season – turning one-off holiday buyers into long-term brand advocates.

Building a high-performance refund strategy

As an enterprise merchant prioritizing refund speed, you’re effectively investing in customer retention. Every swift, transparent refund not only prevents a potential dispute but also reinforces a brand promise: that the customer experience is respected, even when a purchase doesn’t work out.

And as digital commerce evolves, that level of trust is becoming a key competitive advantage – particularly when consumers are more discerning about who they buy from during high-stakes shopping moments.

To carry this out requires alignment across systems, teams, and customer touchpoints. Here are five ways to strengthen your approach before peak season:

1. Integrate refund automation early
Ensure your payment service provider (PSP) can handle automated refund requests at scale. Checkout.com’s unified platform simplifies refund management through a single API, reducing manual work and human error. Fast Refunds works with purchases processed by any PSP. 

2. Offer single refunds for multiple transactions

You’ll likely have customers who purchase multiple goods or services across multiple transactions. Enhance the convenience of their experience by issuing a single consolidated refund across the purchase. 

3. Set clear expectations with customers
Transparency is key. Let customers know when to expect their refund, and – where possible – exceed that expectation. Real-time refunds make that easy to achieve. Checkout.com processes refunds in less than 30 minutes, often instantly. 

4. Let customers refund to a card of their choice 

If the original card for the transaction is no longer active, or if the service was paid for via a non-card method (e.g., gift card), you can process the refund to a different card chosen by the customer. 

5. Link refund data to your fraud models
By integrating refund and dispute data, you can identify abuse patterns early. Checkout.com’s data insights help you continuously refine these models across regions and products.

Turning refunds into a competitive advantage

Refunds may not be the most glamorous part of ecommerce operations, but they’re often the most memorable for customers. A poor refund experience can overshadow an otherwise flawless sales journey.

This holiday season, a fast refund could be the difference between a one-time buyer and a lifelong customer. Nobody wants to wait on their money. And there’s no need to make them. 

Send refunds to customers in near real-time with Checkout.com – card payouts land in as little as 30 minutes, 24/7, 365 days a year. All while safeguarding against disputes, maintaining customer confidence, and keeping your payment operations performing at its peak. It’s a solution built for year-round operational resilience.