Why was a customer upset that I refunded their card instead of cash?
Posted by rj451@reddit | AskUK | View on Reddit | 95 comments
I refunded a customer's card payment via PayPal POS, and they were really upset and claimed that it means they've lost the £14, they wanted the refund as cash (not possible through the POS).
I'm confused, did they really lose their money? Is there a type of card that works like that? There was a bit of a language barrier so a full explanation wasn't forthcoming.
LowAnimator8770@reddit
Cash refund is instant, you have to wait up to 5 days for it to clear in your bank account.
That said I’d say the refund method should be the same as the way they paid.
Upstairs-Quail5709@reddit
Pay by card, refund by card. Consumer Credit Act etc
TartanGuppy@reddit
I always thought retailers/traders were supposed to refund using the same method as payment was made.
Cash = cash refund
Card = card refund
Paypal = Paypal refund
Partly to stop money laundering / fraud
If you've done that then not your issue.
Prior-Explanation389@reddit
Yes *BUT* it doesn't have to be refunded to the SAME card.
mikpgod@reddit
It should be refunded to the same card. There's a common scam where people pay a deposit with a stolen card and try to get a refund to a different card ( their own). Then when the proper holder of the stolen card gets a chargeback actioned the retailer loses the money.
Prior-Explanation389@reddit
Right, but there are situations where cards might’ve been cancelled (switching bank accounts)
QuietofTheSolace@reddit
It's to stop employee fraud.
If you don't do this workers realise they can issue a refund to the guy visiting from out of town who you'll never see again and pocket the cash.
Much-Currency5958@reddit
This 1000% I've worked financial complaints for a long time and you'd be amazed how many people actually are trying to g to launder money like this!
YOF626@reddit
This is what I insist on at my work.
Buddy-Matt@reddit
Its a legal requirement, due to anti money laundering.
Its also sensible, if you refund someone in cash there's nothing stopping them lying and trying to raise their own refund through whatever method they used to pay.
FromLondonToLA@reddit
This. If they raise a chargeback and you've already refunded them on the card, the chargeback gets auto denied. But if you've refunded them in cash you have to prove it, otherwise they'll be successful with the chargeback and get your money twice!
KeremyJyles@reddit
It's store policy and not a legal requirement.
Laescha@reddit
Retailers don't have to do this, but it's a common and sensible policy to reduce the risk of money laundering, scams etc
thehatteryone@reddit
Retailers have to refund card or PayPal to card or PayPal. Not doing so is a breach of their agreements and can lead to them no longer being allowed to use these platforms. If you want a refund for a reason that's not statutory, they can give you a gift card instead (ie not refund your money but leave you with a store credit) but they can't give you cash if you paid via those methods.
Plus_Pangolin_8924@reddit
That and you get back your card fees too. The IZettle POS system that is now (puke) PayPal POS OP would loose out on the 25p.
NuFu@reddit
I agree with this, and I've worked in retail/sales for \~15 years.
Whatever method you used to pay, you will then receive the refund through that same exact method.
Any_Crazy_500@reddit
Not always the case. My Mam used to buy me a shirt every year for Xmas from M&S and give me the gift receipt so I could take it back in case it was too small.
Invariably they were god awful so invariably they went back and I got a cash refund even though she would have paid on her card.
NuFu@reddit
That would be the exception to the rule in this case; if it's a gift receipt you usually wouldn't have the same card that it was paid on. Then it would be at the manager's discretion how to process the refund (cash/card).
blinky84@reddit
I think if they don't want to give you a cash refund for a gift paid by card, they will usually offer you a gift card/shop credit.
gameovervip@reddit
Maybe your mum has a secret stash of cash you don’t know about
PolarLocalCallingSvc@reddit
It should be the default position, for the AML reason you mentioned.
An occasional refund to a different payment method isn't going to get a merchant into trouble assuming it really is occasional and there's a reason for it.
Sparky1498@reddit
Maybe their account is overdrawn so when funds paid back to account via debit card refund they can’t access as gets eaten up by the overdraft (particularly if not an agreed od)
BlueFox789@reddit
They lost the cashback they earnt I would assume
IansGotNothingLeft@reddit
Having worked in retail and e-commerce management for decades, best practice is always to return it to the original payment method to avoid money laundering and fraud transactions. Most payment portals and banks actually have this in their terms because they're legally bound by it.
Why did they want cash instead? It's likely a misunderstanding on their part. It wasn't their card in the first place (might have been a gift?). Or they didn't want to wait the processing time.
gazzavan@reddit
Money laundering is one reason ,main reason in a retail setting to stop people abusing points systems on credit cards , buying stuff getting the points refunding in cash , card issuer none the wiser , customer gets free points ,
BigGrinJesus@reddit
They have their credit card linked to their PayPal. They just wanted cash but didn't want to pay the interest on the card for a cash withdrawal. You didn't play along and they got pissy. Don't worry, you did the right thing as long as you refunded the money in the same way as it was paid in the first place.
joshii87@reddit
Or they had gone over their cash limit and couldn’t withdraw at all.
Suspicious-Water-973@reddit
It’s the merchant services rules, not the shops rules. It’s also to stop money laundering - pay with a stolen card, or even a legit card, get refund in cash, pay cash into someone else account - clean money trail.
(I think)
joshii87@reddit
I used to do with when I was a journalism student. I had a credit card that had gone way past its cash limit. So I used to buy a train ticket to/from Doncaster at peak time every week so I could claim it back via the department’s expenses service. I would then have a string of pound coins for the prepayment meter.
Good God, those were dire times.
StoneColdSoberReally@reddit
Here's your answer, OP.
snarkycrumpet@reddit
if it's a foreign card we often lose money on a refund. I remember buying something from M&S that was processed as $47 then when it didn't fit right I took it back 5 days later and they refunded my card and it processed as $42. irritating.
Jack1ngton@reddit
Maybe they have some sort of charge or debit on their account, so when refunded by PayPal, it cleared that charge, rather than actually giving them the money.
Whatever their reasoning isn't your business. You should always refund to the original method of payment. It's important to reduce risk of money laundering.
thatblondeyouhate@reddit
so many times when I was absolutely skint I'd watch a payment go in and get eaten by my overdraft. So sad. One month I went to the atm at midnight on payday to try and withdraw as much as I could before it got taken by my bills
kind of nice to look back on that now that I have savings
Jack1ngton@reddit
Been there. Might have £8 in my account to last 2 days until payday. I'd think that was fine, I could eat on that. Then I would realise I forgot to cancel netflix or something dumb.
New-Lunch8133@reddit
I have loved Monzo's ability to freeze the card unless I want to use it if I was low on funds. Or move the money into a 'pot' to 'wall it off'.
NoEnthusiasm2@reddit
I did that too! Once, I managed to get my card blocked because I had gone to the cash machine so many times to see if my money had landed (this was before the days of banking apps!) that it was flagged as dodgy behaviour. It was an absolute nightmare!
Also, back in the 90s, the Natwest cash machines were always slow to update after office hours so you could sometimes take your balance out twice if you were desperate for cash. Of course, it meant that the account would have a negative balance but that was next month's problem. Oh, to be young and daft again!
alrighttreacle11@reddit
I transfer money straight to savings account so ot doesn't get swallowed up
rj451@reddit (OP)
!answer I think this is the most likely case. I had to talk them into accepting a refund in the first place (because we couldn't help them), so I don't think it was part of any scam. And they seemed a lot more upset and confident that they had "lost" the money than if it was just a case of waiting until after the bank hol. Thanks everybody who took the time to answer!
rageofa1000suns@reddit
I got into a heated argument with a customer who wanted a refund for an item, but because he paid by his credit card, that was the method I was insisting on refunding it to.
He was having none of it, insisting that he "paid cash" because he already cleared the balance of his card.
I told him that no matter what he says, he either takes the refund back onto the original method then sort it out with his card provider, or he gets nothing.
He took the refund, stayed in store and phoned his card provider who was more than willing to move the positive balance to his bank account.
We also do refunds via PayPal like what you do and don't put those kinds of refunds onto other methods because it's easy for them to claim that they haven't received a refund and will end up getting double the money back.
If the customer is going to get hit by some weird PayPal charges, then that's on them for using that service knowing. You've done your bit.
AverageJoe313@reddit
It was a scam. They get a refund in cash and then dispute the transaction with PayPal so get both lots of money back. Although judging by my experience with actual fraud lately, they probably wouldn't be successful anyway.
ukbot-nicolabot@reddit
OP marked this as the best answer, given by /u/Jack1ngton.
^(What is this?)
Academic_Vanilla_736@reddit
PayPal also offers the 'Pay In 3* option, where they pay upfront & you pay the balance in 3 instalments. We've had this with Klarna too. When refunded, the payment goes back to PayPal/Klarna and the customer gets nothing because they haven't yet made a payment.
ThrowRAMomVsGF@reddit
The only way they lost the money is if they were running a scam. Refunding cash would be highly risky for the company and not allowed.
Revolutionary-Rub231@reddit
In the stores I've worked in the rule has always been to check the receipt for how the item was paid for & refund the same way. So cash refund for a cash payment & a card refund to the card that was used for payment. If no receipt then it would be a refund put on a store gift card to the value of the current price of the item.
L-0-T-H-0-S@reddit
The customer didn't lose their money, they're just playing you for an idiot. They may have been upset because they expected immediate access to it or because of how their specific card account handles incoming credits. That's all.
In almost all retail environments, refunding to the original payment method is the standard procedure required by card issuers and merchant policies to prevent fraud and money laundering - you didn't do anything wrong, your customer is just being a jerk.
OrdinaryIncome8@reddit
If the card is in foreign currency (possible, as language barrier was mentioned), then the customer might be charged currency conversion for both the original purchase and the refund. Sometimes it is possible just to cancel the original transaction.
Regardless, refunding to the original payment method was definitely the right choice.
72dk72@reddit
I think the only way it would cost them.monwy is if there were foreign transaction fees etc.
Pristine_Poem7623@reddit
The guy on the corner doesn't take PayPal, just cash
veryblocky@reddit
I thought you were required to refund via the same payment method, as part of the anti-money laundering legislation.
shrewdlogarithm@reddit
They're either money laundering or they have a massive negative balance which will eat their refund...
FourCats44@reddit
The issue is that some people specifically have accounts or cards in debt and if that account/card receives a credit (like a refund) it just instantly goes towards paying off the debt.
In this case, chances are the PayPal could have been overdrawn and they weren't planning on clearing it anytime soon so wanted the £14 for whatever they were trying to buy.
mollyangel69@reddit
Might be in the negative on Paypal / their bank card
Great-Activity-5420@reddit
No. Either they were pushing for cash or they're not very intelligent. They get it back either way, just takes longer.
FlyingKolo@reddit
One thing that I don't think has been mentioned is some (online only I think) banks don't have compatibility for you to withdraw the credit. I found out when someone sent me a PayPal and I couldn't withdraw it onto my card.
Lanky_Bus_1221@reddit
They didn’t have any money and probably needed the wedge, they could also be overdrawn on the card and just lost that 14 as well
Ebon_Hawk_@reddit
I imagine they paid via PayPal Credit and were hoping they could get a cash refund as a kinda loophole
Low-Run9256@reddit
We had a customer that came in and used his employee business card and then wanted the refund in cash not back on the card because he wanted to pocket the money instead
Serious_Badger_4145@reddit
Cause they're in debt on their card and the 14 quid went towards paying it off
Mediocre-Island5475@reddit
If someone insists on a refund by a different means than they paid, I'd assume something dodgy is going on.
BuildingArmor@reddit
Yep, pay card + refund in cash + chargeback on the card = free money (fraud)
ScaredyCatUK@reddit
Always refund to the payment method used.
jambo_1983@reddit
Maybe they paid with PayPal credit and were hoping for a cash refund as “free money” (I know it’s not, but that may have been their logic)
Dry_Action1734@reddit
It’s standard to refund the same way. I don’t know how they lost money.
Refunding the same way protects against, for example, people using stolen debit/credit cards and getting cash refunds.
NaughtyDred@reddit
Probably wasn't their PayPal
rohepey@reddit
You're obliged to refund to the same payment method. Otherwise you run the risk of money laundering.
Clear-Student-9607@reddit
Exactly this. Even with the language barrier, refunding to the card is the standard procedure for everyone's protection, including yours as the business. The customer probably didn't understand that the money goes back to their bank, not PayPal, so it can take a few days to show up. If they paid by card, giving cash instead would actually be a red flag for fraud or money laundering, so you absolutely did the right thing.
fernofry@reddit
Ignore them. They are trying to exploit something. Either try to get a double refund or it was a stolen payment method and they cant get the money.
pingusaysnoot@reddit
Sounds to me they're in their overdraft which means the money will only cover a portion of their overdraft vs. actual useable/withdrawable cash.
Not your fault or problem!
Obvious-Water569@reddit
Two possibilities.
Card refunds tend to take a few days and they wanted their money now.
Or.
They were up to something dodgy.
Salty_Username@reddit
Can almost guarantee they were overdrawn and wanted the money to spend but not they can't because it will go towards their debt.
PurchaseDry9350@reddit
Maybe because it takes days to return to your card. They could have had a limited amount of money and then £14 is a big chunk taken out of their available funds
CornerSignificant@reddit
You’ve done nothing wrong, you’ve followed the correct process
MrMotorcycle94@reddit
Maybe planning on doing a PayPal charge back so they could get 2 refunds?
VerbingNoun413@reddit
Refunding via card takes a few days for the money to clear. Since it's a bank holiday, this could potentially take until Tuesday.
Wooshsplash@reddit
A scam sometimes involves a stolen or fraudulently obtained card. Buy something (if stolen something that's inside the TTP limit), claims it's faulty, take it back for cash. Also, using a genuine card but maxxing it out and not repaying the debt. Same process for getting the cash from it. Hence, always refund by the method used to purchase.
Bonar_Ballsington@reddit
Did they pay on contactless? If so it's possible they lost out getting the original card's owner
Zackhario@reddit
I haven't used Paypal for years (And for good reasons) I'd imagine it's because Paypal's refund policy is a piece of shit. And it is, sometimes they would hold on your money for no reasons whatsoever. That or they're laundering.
rustynoodle3891@reddit
I use it solely for game/survey sites that either pay that way or a virtual card, and it's near impossible to spend the full amount on the card. Plus they seem to get declined in the big shops. Maybe because I'm usually buying booze.
The go local shop up the road it works fine so If I accidentally get a card they get all the proceeds. He looked at me really confused when I told him to take more than my total. I said it's no good to me, take it and remember if I'm ever short 50p.
Other than when I started doing this a few years ago I hadn't touched the account in probably ten years.
kipha01@reddit
You should always refund to the payment method, it's better for accounting and legality.
n3m0sum@reddit
They are broke or overdrawn.
Returning something for a cash refund is a broke person way of getting quick cash. If you refunded back to PayPay, then they don't have the item or the cash.
Lots-o-bots@reddit
Maybe its a stolen card thats since been deactivated?
Macrihanishautomatic@reddit
That was my first thought
Little_Pink@reddit
Maybe they are in an unareanged overdraft so the bank takes the money to pay off what is owed.
Presuming they originally paid by card you did the right thing refunding to the card.
Same_Difference_3361@reddit
My first thought.
takesthebiscuit@reddit
It’s a common tactic if short, but something on credit attempt to get the refund in cash.
Hopefully something comes along to clear the debt!
You are fine op
HamsterEagle@reddit
You refund by the same method so they can’t be a cheeky beggar and do a charge back or claim the money back again via the original method. Refunding the original transaction prevents this. Trust no one, ignore the faux outrage.
Charlie_Yu@reddit
Note that there is a possibility of scam with a stolen card with PayPal. Got refunded cash then chargeback comes. Not sure if someone would only do it for £14 though
LenzaRNG@reddit
People will shoplift things that are not even £1.40, let alone £14.
I think they misunderstand what it is to be a 'petty' thief.
BigReference1xx@reddit
He's being an ass and most likely wanted to do something dodgy and needed your help to pull it off (stolen card, company card, no balance, etc).
Refunds go to original payment method. Always. NO EXCEPTIONS. live and die by this rule.
JammyWaad@reddit
They may be in a minus balance with PayPal/bank. So any funds landing in the account would be used to clear the deficit.
You didn’t do anything wrong. Refunds need to be a closed loop to prevent money laundering.
Gornal-Annie6133@reddit
It was quite common in the 80’s to pay with a card but get a cash refund. I got into a real financial mess at the time, as I robbed one card to pay another as I had store cards for virtually every shop on the high street and was up to my eyes in debt!
techbear72@reddit
No, but it does mean that they might have to wait 2-5 days to get the money back in their account. However, you did the right thing because you shouldn't give cash as a refund for a card purchase because (a) no recource and (b) that amounts to them getting cash from their card which usually carries higher fees and immediate interest, if a credit card.
DeathByFluffy@reddit
It was probably more convenient for them - but 99% of employers require refunds to be made the same way as original payment.
Don’t worry about it - you did the right thing. I’ve heard all the excuses under the sun for wanting a refund to another method but none were actually true.
jon81uk@reddit
How did they pay? If paid in cash I’d expect a cash refund, paid by card and refund back to the same card is standard to prevent money laundering.
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