Keep Your Eyes Open for Refund Authorization Changes Coming April 2020

As previously mentioned here, Visa and MasterCard are coming out with changes to their regulations in April 2020 that require that refunds go through the authorization process, just like sales do.  They hope this change will help consumers and merchants by clarifying the refund process and reducing inquiries about refund status.

The new requirements create a new situation that software providers and merchants alike will need to be prepared to handle. In the event that the issuing bank declines the authorization on a refund, you’ll need the decline notification communicated to you and you’ll need to be prepared for your options for next steps to make the consumer whole. ASCENT has notified our software partners of these requirements so they can plan how they will implement and communicate to merchants when a refund authorization is declined.

For merchants, ASCENT still strongly recommends you ALWAYS refund initially to the exact same card as originally charged. In the rare case that the refund authorization is declined by the issuer, the merchant may process the refund onto a different card, preferably from the same Card Brand. If that is not possible, the merchant can refund via a different method (check, credit on future purchase, etc.). To protect yourself from potential chargebacks, if you receive a decline on the refund authorization, we suggest documenting carefully:

  • Document receipt of a refund authorization decline on the card originally charged
  • Document the refund via another card or alternate payment method with a clear receipt acknowledged in writing (signature or correspondence) by the cardholder

If you have any questions, contact support@ascentprocessing.com.