Last year, Visa rolled out new purchase return authorization requirements to merchants in the U.S. and Canada to send credit return authorization messages. This rule allows the cardholders to view credit or return activity on their online statements in real-time, instead of the usual 2-5 days, improving the cardholder experience.
For merchants, this mandate can minimize refund-related inquiries by offering refund data to customers quicker. Providing the information upfront can also help reduce the likelihood of disputes, saving merchants time and money. Under the new rule, the merchant will receive a response – either an approval or a decline – when a cardholder returns a product or requests a refund. Once approved, the customer will be able to see that transaction in their online account in real-time.
Handling a declined refund response
A declined refund response can happen for several reasons. The most common reasons include: the issuer may have determined that the card is compromised due to past fraudulent use, the card is placed on hold by the cardholder, the card is marked as lost or stolen, or a cardholder’s account was closed, expired, or did not exist.
Merchants can take proactive steps to handle declines. Establishing preventative policies and procedures can help mitigate the risk of chargebacks and ensure that your customers are getting the best user experience.
Learn more: chargebacks vs. refunds
Updated on July 17, 2020: