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 PIN Debit transactions are a great thing. More Security inthe transaction, less chance of a chargeback, and lower cost make them a staple of the current payment landscape. However a refund can be tricky.
So let’s take a look at how to do a pin-debit refund. Let’s say a cardholder uses their debit card to make a purchase. They enter their pin number to complete the transaction. At the end of the day, you batch out like normal.
Two days later, the cardholder comes back to your store to return the purchase. How should you process the credit back to the card holder?
Here’s the process for pin-debit cards: Issue cash back, store credit or paper check refunds
ONLY. No credit refunds should be attempted through the terminal nor should the transaction be voided. This is very important.
If you do attempt to run the return as a credit back to the card, it takes at least eight business days for the transaction to hit the debit exception list in accounting. Accounting would then need to know whether to post it to the merchant (if they have already given the credit back in another form) or to the cardholder directly if they have not yet received credit. As you can see, this causes a long delay for the cardholder and requires manual processing. In the end the card-holder will be upset because their refund is taking so long and you will be the one holding the bag!
Please be sure to share the appropriate procedures with your staff to eliminate the hassle.
Remember, pin-debit transactions are like cash transactions, so issue cash back, store credit or paper check refunds rather than crediting the card. |
