In Betalingsservice, both customers and their bank are able to reverse or reject a payment.
Reversals can be actioned by the customer's bank up to two working days after the charge date, whilst customers themselves can reject or reverse a payment anytime within the first seven days of the month in which the payment is charged or due to be charged. A rejection refers to instances where the payment has not yet been charged, whereas a reversal will occur when the payment has already been collected.
You can find more details on each situation below:
Note: Payment rejections will be marked as Failed in your GoCardless dashboard, whereas a reversal will be marked as a Chargeback.
Bank reversals
The customer’s bank may reverse a payment up to two working days after the charge date. This could be for a number of reasons:
- There are insufficient funds in the customer’s account (and the payment was over 1000 DKK - see note below)
- The customer does not have a debtor agreement in place with their bank.
- The bank or customer cancelled the mandate before the payment due date.
- The customer no longer holds a bank account with the bank.
- There are errors in the payment data.
In this instance, the bank will send the reversal request to Nets, who will facilitate the transfer of funds from the merchant’s account to the customer’s account.
Please note: If a payment fails due to insufficient funds but the value of the payment is below 1000 DKK, the bank will absorb the cost and the merchant would not be required to return the funds.
Customer Rejections and Reversals
In Denmark, a customer has until the seventh calendar day of the month in which payment is due to reject or reverse a single payment (that is going to be collected that month). If the 7th falls on a weekend or a public holiday, the customer will be given an additional banking day by which to initiate the rejection or reversal.
If the payment has already been taken by the time the rejection or reversal is initiated, the funds will automatically be extracted from the merchant’s account and returned to the customer (i.e. reversal). If the payment has not occurred yet, it will be cancelled before any funds move between accounts (i.e. rejection).
The customer can initiate this rejection or reversal in a number of ways:
- Via their mobile banking app
- Via their online banking
- In person at their bank
Through the digital channels mentioned above, the customer will see an option to ‘reverse or reject’ the payment which will disappear after the seven day window.
The customer may only reject or reverse the full amount of a single payment and the cancellation of a single payment will not affect any future payments. The customer will notice the refunded amount as credit in the following month’s payment summary, however it may be shown against the original charge date.
A merchant cannot directly dispute a rejection or reversal initiated in this way by the seventh calendar day of the month. Any funds that need to be refunded are processed automatically by Nets who will send a request to the merchant’s bank, and the merchant will be notified of the rejection/reversal via the 0602 file from Nets. However, if the customer has unfairly rejected or reversed the payment, the merchant can re-charge the customer in the following month. If the customer rejects or reverses this second attempt then the merchant must ask the customer to pay via an alternative method (e.g. via an invoice).
If a customer wishes to initiate a reversal or rejection after the seven day window, it becomes known as a customer claim.