Accidentally Made A Double Payment
You have a customer who explains they accidentally made a double payment, or they made a payment but need that money for something else.
What do you do? E-Complish can’t tell you what to do but we can recommend being cautious. Each request is unique, and most importantly it’s a business decision for your company.
When a refunding a transaction you should first consider if there is an opportunity for the customer to defraud you in the process. For example, let’s say a customer “accidentally” makes a large credit card payment of $12,000 on a low $120 balance account. It would seem that this was an accidental slip of the fingers and the customer added a couple extra zeroes to the amount they intended to pay. The customer requests a refund of the overage they paid, and your first inclination is to refund this without question. Perhaps, you should question…
E-Complish has seen many scenarios like the one above. Let’s say you did the refund, you’re feeling great about your customer service and helping the customer out of a bind. It’s time to do some high fives, right? However, once the customer receives their refund they contact their bank and dispute the original charge/debit with their bank. When this occurs, the money is put back into the customer’s account automatically while the dispute is investigated and you receive a credit card chargeback or ACH Return. This provides the customer the opportunity to withdrawal the money, fly to Tahiti and have a great vacation on your dime!
Now, you may say, “can’t the bank see that I refunded the money to the customer?” Most banks, (again, most banks…), will see your refund and not allow a chargeback or ACH dispute. However, issuing a refund creates a separate transaction at the bank that is separate and sometimes unlinked to the original transaction. With that said, we have seen banks allow a charge-back or ACH Return even after a customer receives a refund. So, as a company policy, E-Complish never recommends a large “overpayment mistake” refund. Instead, we recommend the customer dispute the charge that they mistakenly made. In reality, the error was on the side of the customer and the error really should be fixed by the customer through their bank. This is the safest approach and will *guarantee* your company is not burned.
Not customer service friendly enough for you? Alternatively, you could talk to the customer’s bank with the customer on the phone. Some banks will accept a letter from your company stating that your company acknowledges that this is a mistake and your company will allow the bank to “Reverse the charge/debit” (It’s a Reversal, not a Refund at this stage). This approach will also protect your company and provide excellent customer service to the customer.
Please note, E-Complish’s opinion is still that this is the customer’s responsibility to fix, but if your company wants to help (in the name of customer service and mentioned above), you could contact the bank with the customer to have their bank initiate the Reversal. But, if the customer balks about this approach, this should raise serious red flags. In our opinion, this would clearly show a potential fraud attempt. The customer should willingly accept your help and if they don’t, then that should be a clear indicator that something fishy is going on here.
When a customer requests a refund, your company has to walk a fine line between quality customer service and insuring you are not the target of fraud. You should always ask if there is an opportunity to defraud the company, and is the risk of refund greater than providing great customer service. Whatever you decide, E-Complish hopes we have provided you with some additional understanding of credit card and ACH refunds to help you make the best decision with the least risk.
Team E-Complish is committed to excellent service…you deserve it!