Refunds

Learn how Adyen controls your users' refund processing.

Limited availability
Adyen's Managed Risk solution is in pilot phase. Some of the processes and documentation may change as the solution evolves.

Adyen's refund handling framework for Managed Risk is designed to improve your platform's operational efficiency and financial accuracy. We authorize refunds based on the specific user's balance account balance, rather than relying on your platform's overall funds. This process prevents unexpected negative balances that could disrupt their operations.

We also apply a limited negative balance tolerance to one of the balance accounts of your users, providing them with the flexibility to issue customer refunds, even if their immediate funds are low. This helps them maintain customer satisfaction and reduces the risk of potential chargebacks.

Requirements

In addition to the roles and permissions required for Managed Risk, take into account the following requirements, limitations, and preparations for processing refunds.

Requirement	Description
Webhooks	To receive updates on the refund status, subscribe to the Standard webhooks. To receive updates on the fund movements in your platform, subscribe to any or both of the following webhooks: Transfer webhooks Transaction webhooks
Limitations	Refunds for closed balance accounts are always declined. If the balance account is suspended but it has sufficient funds, we authorize the refund. You can only issue refunds in the same currency as the original payment. The negative balance tolerance can only be used for refunds. It cannot be used for fund transfers or payouts.

Refund authorization

When your users process a refund, Adyen checks their balances before authorizing the transaction. If your user doesn't have enough funds in their balance account, or if the refund amount goes beyond their negative balance tolerance, Adyen may not authorize the refund. This process helps ensure that your users operate with clear financial boundaries, preventing unexpected negative balances that could disrupt their operations.

Refunds are only allowed in the same currency as the original payment.

For more information on how to issue refunds, see Refund online payments or Refund in-person payments.

Troubleshooting

You can avoid refund refusals and negative balances by keeping track of the balances in your users' balance accounts, and setting up scheduled or manual top-ups if their balance gets below a certain threshold.

For more information, see Track balance updates and Top up balance accounts.

Negative balance tolerance

Adyen automatically configures a negative balance tolerance for eligible users. This tolerance allows your users to process refunds even if their balance is temporarily low. This flexibility is key to helping your users maintain good customer relationships and avoid issues like chargebacks, even during periods of lower processing volume.

The negative balance tolerance can only be used for refunds. It cannot be used for fund transfers or payouts.

Track refund status and fund movements

Listen to the following webhooks to learn the outcome of the refund request and the status of the fund movements in your balance platform.

Standard REFUND webhook: Informs your server about status of the refund validation. If success: false, a reason field describes the problem, such as Insufficient in-process funds on account.
Balance Platform webhooks: Adyen sends the following webhooks for all fund movements in your platform.
- balancePlatform.transfer.created: Informs your server that a refund request was received for a specific balance account.
- balancePlatform.transfer.updated: Informs your server of every status change for refund transfers.
- balancePlatform.transaction.created: Informs your server that funds were deducted from a balance account.

For declined refunds, the webhooks contain clear reason messages, such as insufficient funds for specific balance accounts, or indicate if a balance account involved in the transaction is closed, suspended, or non-existent.