Refunding & voiding transactions
Settled payments submitted to Payrix via the Portal or API can easily be reversed by issuing a partial or full refund. Refunds can be done directly in the Portal or by sending a POST request to the /txns endpoint of the API.
Payments submitted to Payrix via a semi-integrated or a directly integrated terminal device can only be refunded/voided on the terminal device they were submitted on.
In order for a payment to be refunded the transaction status must be captured or settled. In practical terms, a transaction can only be refunded once the payment was already batched out. Prior to batch out, when the payment has only been authorized and the transaction status is still approved, the payment can be (partially or fully) reversed by voiding or canceling the transaction.
The moment a payment is refunded the funds are deducted from the Merchant’s Payrix Available Balance and sent to the processing bank to be returned to the customer (cardholder).
If a Merchant does not have sufficient offsetting transactions or funds available in Payrix to cover a refund, their primary bank account on file may be debited to cover it.
Refund processing cycle & timeline
It is important to note that card payments (sale) and eCheck transactions differ slightly in terms of refund processing cycle and timeline.
Card payment (sale) refund cycle & timeline - When a card payment is refunded, a new, but related, transaction is created within Payrix. The related refund transaction will have a unique profile page in the Portal with a unique Transaction ID (TXN ID). Immediately after a refund is submitted the new refund transaction will have a status of pending.
A pending card payment refund will be submitted as part of a Merchant’s next daily batch to be captured and settled on the same evening it is submitted. Thus, a refund will be pending until the Merchant’s batch closes at approximately 7:00PM or 9:30PM EST, then the status will update to captured, and shortly after that to settled.
Once a refund is settled the funds are sent to the processing bank to be returned to the customer’s original payment method.
How long does it take for the customer to get their money back for a card payment refund?
When a refund is submitted, Payrix returns the relevant funds to the processing bank, but the timeline for the customer to actually see that money varies depending on how their bank processes refunds. Once a refund is settled the funds will usually hit the customer’s account within 3-7 business days (or 4-8 business days from when the refund is submitted by the Merchant) depending on the cardholder’s bank.
If a refund is showing as settled in Payrix but the customer hasn’t received their funds back yet, we suggest the cardholder reach out to their own bank before contacting Payrix Support.
eCheck refund cycle & timeline - When an eCheck payment is refunded, an entirely new ACH transaction is created within Payrix, completely separate from the original eCheck transaction. This new ACH transaction sends the relevant refund amount from the Merchant’s bank account to the original customer’s bank account.
Because an eCheck refund is an entirely new and unique ACH transaction, the cycle and timeline match the normal eCheck payment process.
How long does it take for a customer to get their money back for an eCheck refund?
Generally, a customer will receive an eCheck refund 4-7 business days after it is submitted by the Merchant, but this varies depending on the customer’s bank.
Because eCheck payments may have the settled status prior to the payment being funded, and an eCheck refund is an entirely separate ACH transaction, it is important for a Merchant to check their Available Balance to confirm the original eCheck payment was funded before they issue a refund.
If a settled eCheck payment is refunded before the original transaction was funded, and at a later point the original eCheck is returned, the separate refund ACH payment will still continue to process and be sent to the customer. Thus, in this scenario, the Merchant would be sending their customer a refund for a payment they never received.
Voiding or canceling an approved transaction
When a card payment is initially submitted to Payrix the transaction status is approved until it is captured and settled as part of the Merchant’s daily batch. Because an approved transaction means the payment was authorized but it hasn’t been sent to the processing bank yet, and the funds are not available in the Merchant’s Payrix balance yet, these transactions cannot be refunded and must be voided or canceled in order to be reversed.
What’s the difference between “voiding” and “canceling” an approved transaction?
Voiding a transaction - When an approved transaction is voided the authorization code that was generated by the processing bank validating the payment when it was submitted is completely reversed. Therefore, if the Merchant decides to go through with the payment at a later date they will be required to re-submit the payment for authorization.
Canceling a transaction - Canceling a transaction removes that specific payment from the Merchant’s daily batch. However, the authorization code issued by the processing bank is still valid. In other words, if the Merchant decides to proceed with a canceled payment at a later date the original authorization code may still be valid, and the Merchant is only required to re-add the transaction to their next daily batch.
Once a transaction is voided or canceled it will not be included in the Merchant’s daily batch, and no funds will be moved from the customer’s bank to the Merchant’s Payrix account.