As a pull-based payment system, the Direct Debit network is not typically well suited to refunding payments. Nevertheless, we know that there are times when it is necessary to return payment to your customers, and to do so in a way that ensures they continue to receive a great experience.
Due to the complexities of returning funds to payers, our refund service sits outside of the bank debit network and requires a case-by-case review and approval process.
How refunds are sent
Refunds are sent via the Faster Payments service directly from our GoCardless bank account, before being balanced out against available funds held in your GoCardless account, awaiting payout to you.Please note, you must have a pending account balance sufficient to cover the cost of the refund in full in order for a request to be reviewed.
Our standard process requires you, the merchant, to submit a refund request to our team for review when wishing to return a payment in full or part. [See Requesting a refund below]
In some cases, we may be able to enable a refund feature on your account that allows you to action these requests yourself. [See Processing your own refunds below]
Before requesting or processing a refund, please familiarise yourself with Refund Safety.
Refund safety *important*
Funds processed through the bank debit network do not settle immediately. Although rare, there can be instances where a payment is initially marked as successful by the paying bank, only to be subsequently marked as incomplete.
For this reason, we strongly recommend that payments are not refunded within 7 days of being charged. This allows sufficient time for the payment to be settled into your bank account, ensuring that it was successfully collected and protecting you from returning unreceived funds.
A 7-day refund restriction is imposed on payments by default, however if you wish to opt-out of this safety feature you may confirm you wish to do so when requesting a refund.
Requesting a refund
Unless you have the refund feature enabled on your GoCardless account, you will be required to request a refund each time you need to return funds to your customer.
To request a refund, please submit your request via this form.
You will be asked to enter information including:
- The name of your organisation
- The payment ID(s) of the payment(s) you wish to refund (these begin PMxxx…)
- The amount you wish to refund against each payment ID (up to the full amount)
- The total amount you’re requesting to refund
Refund request timeline
Upon receipt of your refund request, the following will happen:
|1||Confirmation||You will receive a reply within 24 hours confirming if we can issue your refund.|
|2||Refund processed||By default, your refund will be actioned 7 days after the payment was charged. If you have opted out of this safety period, the refund will be processed on or after the payout date. You and your customer will both receive an automated notification when the refund is actioned.|
|3||Customer receives refund||In most cases funds will be received within one business day of the refund being actioned. On some occasions it may take two business days.|
|4||Refund is settled||If we refund a payment that has already been paid out to you, we will settle the amount of the refund against your next payments. The refund will be marked as a ‘debit’ within the payout it was settled against.|
Processing your own refunds
|Please note : The ability to process your own refunds is enabled on a case-by-case basis subject to meeting certain requirements. If you would like to have this feature enabled, please submit your request here.|
Payments can be refunded from within your GoCardless dashboard once they have been marked as confirmed.
(We recommend allowing 7 days from the payment being charged before actioning a refund [see Refund safety for more information]).
How to process a refund via your dashboard
- Open your dashboard and locate the payment you wish to refund
- Click on the payment to open it
- Click Refund in the top right corner
- Enter the amount you would like to refund (up to the full amount of that payment)
- Enter a reference (this will appear as part of the reference on your customer’s bank statement)
- Click Refund payment
Refunding payments : FAQs
What is the cost to process a refund?
The cost to process a refund varies depending on your set up with GoCardless and the region in which you’re processing payments from.
For customers on our pay-as-you-go packages (Standard/Plus/Pro), we do not charge any additional fees to process a refund.
For customers on a custom volume-based commitment, refunds are subject to an additional processing fee. Please see your contract for further details or speak to a member of our Sales team.
Please note, we do not refund the original transaction fee collected when successfully collecting the payment from the customer.
Can I still request a refund if I don’t have a sufficient pending balance in my account to cover the amount being refunded?
You may still request a refund if you don’t currently have a pending balance available in your account to cover the amount, however we may need to delay processing of your refund until new payments have been collected.
How much will my customer receive when a refund is processed to them?
You are able to request a partial or full refund for a customer. If refunding a full payment,
your customer will receive the full amount of the payment back into their bank account.
How long does it take for a refund to be processed?
Refund requests are reviewed within 24 hours of being received and, subject to approval, are processed immediately or on the day the payment becomes available for refunding.
Refund availability will take into account the default 7-day safety window unless you have chosen to opt out of this when making your request.
Once a refund is processed, how long will it take to reach my customer’s bank account?
Once a refund is processed it should reach the customer’s account within 2 business days, however it is often received within one business day.
How will refunds appear on my customer’s bank statements?
If you are using GoCardless on either our Plus or Pro package, or have signed up to a Custom contract, your company name and Direct Debit Service User Number (SUN) will be shown on a payer's bank statement when you refund a payment.
Please note : Your Service User Number (SUN) will always be shown in its full 6 digit format. This may result in your company name being truncated if it’s more than 11 characters (including spaces).
Otherwise, if you're on our Standard package, your customer’s bank statement will simply say "GoCardless".
What happens if a customer charges back a payment with their bank after a refund has been processed to them?
As the Direct Debit network is not suited to processing refunds, payments are returned to customers via a separate method using the Faster Payments service.
Consequently, payments collected through GoCardless are still able to be charged back by the payer under the Direct Debit Guarantee, even after being refunded through GoCardless.
We recommend that you always ensure your customer is aware of the refund process and keep them informed of when they will receive the returned funds in their account.