Order cancellations are an unfortunate reality for any business. Customer may cancel order, return part of the order or the full order. Merchant may not have the resources to fulfill the order and must cancel it. Therefore, it is imperative for merchants collecting payment online can refund a payment to the merchant.
PayU recommends publishing the Refund policy on your website, including the time taken to refund for failed transactions and the process to refund.
Refunds can be classified into two types:
- Partial refund: Where the refund amount is less than payment amount. This means merchant is refunding only part of the payment done by customer. This happens when only part of the order is cancelled.
Ex. Customer purchases two product from merchant or value Rs. 500 and Rs. 7000. Customer pays a total of Rs. 7,500 to the merchant via online payment. Now the customer returns product 1 of value Rs. 500. Now, merchant only must return Rs. 500 to the customer (instead of the transaction amount of Rs. 7,500).
- Full refund: Where the refund amount is equal to the payment amount. This means that the merchant is refunding the entire payment done by the customer for a transaction. This happens when either merchant or customer cancel the entire order.
Ex. Customer purchases two product from merchant or value Rs. 500 and Rs. 7000. Customer pays a total of Rs. 7,500 to the merchant via online payment. Now the customer returns both the product. Now, merchant must return Rs. 7,500 to the customer.
For more information on how to refund a transaction, refer to Refund Transaction API
When you receive a refund request from customer on a transaction done via PayU:
- You can raise a refund request via PayU dashboard or refund api indicating the amount to be refunded.
- Refunds must be sent to the source account which was used to make the payment. To do so, PayU passes the refund request to the bank/lender through which payment was done.
Ex. If the payment was done by HDFC Credit Card EMI option, then the refund request is sent to HDFC bank.
- The bank refunds the amount to the customer.
- The refund amount is deducted from the merchant settlement.
If a customer has been charged for a transaction and did not receive the expected services, they may be eligible for a refund. For example, if the customer was charged for a movie ticket but did not receive the ticket, they can get a refund.
To Initiate a refund, you require the following information:
- The customer must have made the payment within a specific time frame or using a PayU product.
- You have the transaction ID, date, and transaction amount.
A refund can either be full or partial:
- Full refund: 100% of the amount paid is returned to your customer.
- Instant refund: If the instant refund is enabled for you, the refunds are completed within 5 minutes of the refund request.
- Partial refund – The amount you received will be returned to the customer. Multiple partial refunds can be made until the full amount has been refunded.
PayU offers refunds for payments made using PayU India products: PayU Offers, PayU Partners, Split Settlements, etc. Generally, you need to initiate a refund request using any of the following methods:
- Cancel Refund Transaction API: For more information, refer to Refund Transaction API
- PayU Dashboard: For more information, refer to Refunds Dashboard.
Refunds will take between 5-21 days for the refund amount to reflect in your customer’s bank account. In the case of Net Banking transactions, certain government banks may take some more days. You will be communicated over email with the status (successful or failed) once the request for a refund is processed.
A chargeback is raised by the customer to the issuing bank for many reasons like a fraud transaction, unsatisfactory product or service delivery, etc. In refunds, it is initiated by you (merchants) after your customer requests for a refund or a transaction has failed for the customer.
Updated 10 days ago