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Referenced refunds

Enable cross-channel returns with simple reconciliation and better fraud protection.

Customers appreciate the possibility of cross-channel returns, allowing them to return an ecommerce purchase to a physical store, or return their in-store purchase by sending it to your distribution center. With referenced refunds, you can offer cross-channel returns with a minimum of operational burden.

Simpler reconciliation

On our unified payments platform we assign a unique identifier to each transaction. This identifier is known as the PSP reference. When you issue a referenced refund, you specify the PSP reference of the original payment. In this way, you can match each refund against a payment, regardless of the sales channel. You'll have the complete audit trail of a payment including any full or partial refunds.

Better fraud protection

A referenced refund returns the funds to the payment method that was used for the original payment, not to the card the shopper is presenting in the store or as cash. This helps combat various return fraud types like returning stolen merchandise, receipt fraud, and cross-retailer returns.

Also, when using referenced refunds, payments can't be refunded multiple times, or for an amount exceeding 100% of the payment value.

Synchronize your back-end systems

A requirement for cross-channel returns is that you have access to transaction information of all sales channels. For referenced refunds, this transaction information must include the PSP reference.

Ideally you have a central database where you store information from both ecommerce and point-of-sale transactions. If you store the ecommerce and point-of-sale transaction information separately on different systems, these systems must be able read each other's data.

Processing refunds

Refunds are not processed synchronously. When you send an API request for a referenced (or unreferenced) refund, the response confirms we received the request. Then we try to process the refund asynchronously, and will inform you of the result through a REFUND webhook.

When a refund has been processed, it is deducted from your in-process funds, and will appear in your shopper's account within a few days.

By default, refunds are deducted from the merchant account that processed the original payment. For example, if a sale took place on MerchantAccount_ECOM and the product is returned to MerchantAccount_POS, the funds are taken from the ECOM account.

If you want to process cross-channel returns between multiple merchant accounts, contact our Support Team to enable refunds on the company level. This will allow you to use the /payments/{paymentPspReference}/refunds endpoint to submit returns for any merchant account under your company account.

Refund options

To issue a full or partial referenced refund, you have these options:

  • Terminal API reversal request: Your cash register sends a Terminal API ReversalRequest to the payment terminal. The request includes the PSP reference of the original in-store or ecommerce purchase. The terminal generates a receipt, and the funds are returned to the original card or other payment method without the need for the customer to present a card to the payment terminal.

  • Server-to-server refund: You make a POST request to the /payments/{paymentPspReference}/refunds endpoint, where paymentPspReference is the PSP reference of the original in-store or ecommerce purchase.

  • Refund from your Customer Area. This is a good option if you don't issue refunds often. We describe this in the Account section of our documentation.

Terminal API reversal request

When you make an in-store payment, the Terminal API response returns the transaction identifier of the payment in the format tenderReference.pspReference. To make a referenced refund, you specify this transaction identifier in your refund request.

However, the tenderReference is generated by the payment terminal, and is missing for an ecommerce payment. In that case you include the PSP reference in the format .pspReference, and the currency of the original ecommerce payment.

You can make a:

  • Full refund to return the total value of the purchase to the shopper.
  • Partial refund to return part of the purchase to the shopper. For example, when a shopper returns one of the items they purchased. You can also make multiple partial refunds. For example, when a shopper returns several items at different times.

Select a tab to see the parameters that you need to specify for a full referenced refund, or a partial referenced refund.

  1. Make a POST request to a Terminal API endpoint, to initiate a referenced refund for the full amount.

    • MessageHeader. The standard SaleToPOIRequest.MessageHeader object with:
      Parameter Required Description
      ProtocolVersion -white_check_mark- 3.0
      MessageClass -white_check_mark- Service
      MessageCategory -white_check_mark- Reversal
      MessageType -white_check_mark- Request
      SaleID -white_check_mark- Your unique ID for the cash register.
      ServiceID -white_check_mark- Your unique ID for this request, consisting of 1-10 alphanumeric characters. Must be unique within the last 48 hours.
      POIID -white_check_mark- The unique ID of the terminal that you want to route this request to. Format: [device model]-[serial number].
    • ReversalRequest: The request body with:
      Parameter Required Description
      OriginalPOITransaction.POITransactionID -white_check_mark- An object with:
      • TransactionID: Transaction identifier of the original payment: the tender reference and/or the PSP reference. See the allowed formats.
      • TimeStamp: Date and time in UTC format of the original payment. For example, 2000-01-01T00:00:00.000Z
      OriginalPOITransaction.POIID Unique ID of the terminal that processed the original payment. Include this when you know the tender reference but not the PSP reference of the original payment.
      ReversalReason -white_check_mark- MerchantCancel
      SaleData.SaleToAcquirerData The currency of the refund, in the format currency=ABC where ABC is the three-letter currency code. This must match the currency of the original payment. Include this when you know the PSP reference but not the tender reference of the original payment.
      To specify the original TransactionID, use one of the following formats:
      Format Example
      tenderReference.pspReference 7JLX001566393198001.851556019495143C Recommended format
      .pspReference .851556019495143C Don't forget the leading dot (.). Use this together with the SaleData.SaleToAcquirerData.currency field when you don't know the tender reference.
      tenderReference 7JLX001566393198001 Use this together with the OriginalPOITransaction.POIID field when you don't know the PSP reference.

    The next example shows how to make a full refund, with the TransactionID in the recommended format.

    {
        "SaleToPOIRequest":{
            "MessageHeader":{
                "ProtocolVersion":"3.0",
                "MessageClass":"Service",
                "MessageCategory":"Reversal",
                "MessageType":"Request",
                "SaleID":"POSSystemID12345",
                "ServiceID":"0207111107",
                "POIID":"V400m-324688179"
            },
            "ReversalRequest":{
                "OriginalPOITransaction":{
                    "POITransactionID":{
                        "TransactionID":"7JLX001566393198001.851556019495143C",
                        "TimeStamp":"2019-03-07T10:11:04+00:00"
                    }
                },
                "ReversalReason":"MerchantCancel"
            }
        }
    }
    String saleID = "YOUR_CASH_REGISTER_ID";
    String serviceID = "YOUR_UNIQUE_ATTEMPT_ID";
    String POIID = "YOUR_TERMINAL_ID";
    String transactionID = "YOUR_UNIQUE_TRANSACTION_ID";
    
    SaleToPOIRequest saleToPOIRequest = new SaleToPOIRequest();
    MessageHeader messageHeader = new MessageHeader();
    messageHeader.setProtocolVersion("3.0");
    messageHeader.setMessageClass( MessageClassType.SERVICE );
    messageHeader.setMessageCategory( MessageCategoryType.REVERSAL );
    messageHeader.setMessageType( MessageType.REQUEST );
    messageHeader.setSaleID(saleID);
    messageHeader.setServiceID(serviceID);
    messageHeader.setPOIID(POIID);
    saleToPOIRequest.setMessageHeader(messageHeader);
    
    ReversalRequest reversalRequest = new ReversalRequest();
    OriginalPOITransaction originalPOITransaction = new OriginalPOITransaction();
    TransactionIdentification pOITransactionID = new TransactionIdentification();
    pOITransactionID.setTransactionID(transactionID);
    pOITransactionID.setTimeStamp(DatatypeFactory.newInstance().newXMLGregorianCalendar(new GregorianCalendar()));
    originalPOITransaction.setPOITransactionID(pOITransactionID);
    reversalRequest.setOriginalPOITransaction(originalPOITransaction);
    reversalRequest.setReversalReason( ReversalReasonType.MERCHANT_CANCEL );
    saleToPOIRequest.setReversalRequest(reversalRequest);
    terminalAPIRequest.setSaleToPOIRequest(saleToPOIRequest);

    Refunding an offline point-of-sale payment

    The next example shows how to make a full refund when you don't know the PSP reference of the original payment. Use this to refund an offline payment. Because the PSP reference is generated on the plataforma de pagamentos da Adyen, it is missing for offline payments.
    To refund an offline point-of-sale payment, the Terminal API reversal request must include:

    • TransactionID: The tender reference of the original payment. For example: 7JLX001566393198001
    • POIID: The unique ID of the terminal that processed the original payment. With the POIID, we can find the missing information. In case of a full refund on the same terminal that processed the original transaction, you can omit the POIID field.

    Reversal request when the PSP reference is unknown
    {
    "SaleToPOIRequest":{
      "MessageHeader":{
         "ProtocolVersion":"3.0",
         "MessageClass":"Service",
         "MessageCategory":"Reversal",
         "MessageType":"Request",
         "SaleID":"POSSystemID12345",
         "ServiceID":"207111108",
         "POIID":"V400m-324688179"
      },
      "ReversalRequest":{
         "OriginalPOITransaction":{
            "POITransactionID":{
               "TransactionID":"7JLX001566393198001",
               "TimeStamp":"2019-03-07T10:11:04+00:00"
            },
            "POIID":"P400Plus-275008565"
         },
         "ReversalReason":"MerchantCancel"
      }
    }
    }

Refunding an ecommerce payment

The next example shows how to make a full refund when you know the PSP reference of the original payment, but don't know the tender reference. Use this to refund an ecommerce payment. Because the tender reference is generated by the terminal, it is missing for ecommerce payments.
To refund an ecommerce payment, the Terminal API reversal request must include:

  • TransactionID: The PSP reference of the original payment in the format .pspReference.
    Don't forget the leading dot (.). For example: .851556019495143C
  • SaleToAcquirerData: The currency of the original payment in the format currency=ABC where ABC is the three-letter currency code. For example: currency=EUR

Reversal request when the tender reference is unknown
{
    "SaleToPOIRequest": {
        "MessageHeader": {
            "ProtocolVersion": "3.0",
            "MessageClass": "Service",
            "MessageCategory": "Reversal",
            "MessageType": "Request",
            "SaleID": "POSSystemID12345",
            "ServiceID": "207111108",
            "POIID": "V400m-324688179"
        },
        "ReversalRequest": {
            "OriginalPOITransaction": {
                "POITransactionID": {
                    "TransactionID": ".851556019495143C",
                    "TimeStamp": "2019-03-07T10:11:04+00:00"
                }
            },
            "SaleData": {
                "SaleToAcquirerData": "currency=EUR"
            },
            "ReversalReason": "MerchantCancel"
        }
    }
}
  1. Check whether we received your request for a full or partial refund.
    If we received your request, the ReversalResponse contains:

    • POIData.POITransactionID.TransactionID: The PSP reference for this refund request.
    • Response.Result: Success

    If your request failed, the ReversalResponse contains:

    • Response.Result: Failure
    • AdditionalResponse: Includes a message explaining why the request failed. Use this to fix the request and try again. For example, Original pspReference required for thisoperation.

    Response when we received your reversal request
    {
       "SaleToPOIResponse":{
           "ReversalResponse":{
               "POIData":{
                   "POITransactionID":{
                       "TimeStamp":"2019-05-23T10:32:32.928Z",
                       "TransactionID":"881566557882697F"
                   }
               },
               "Response":{
                   "Result":"Success",
                   ...
               }
           },
           ...
       }
    }
  1. Wait for the REFUND webhook to learn the result. Refunds are always processed asynchronously. If successful, the refund is issued to the shopper's account.

Server-to-server refund

To return funds to your customer:

  1. From the AUTHORISATION webhook, get the pspReference of the authorisation you want to refund.
  2. Make a POST request to the /payments/{paymentPspReference}/refunds endpoint, where paymentPspReference is the pspReference of the authorisation you want to refund.
    In your request, include:
    Parameter Required Description
    merchantAccount -white_check_mark- The name of your merchant account that is used to process the payment.
    amount -white_check_mark- The amount that you want to refund.
    • The value must be the same or, in case of a partial refund, less than the captured amount.
    • The currency must match the currency used in the authorisation.
      reference Your reference for the refund, for example for tagging a partial refund for future reconciliation. The reference parameter is required for GrabPay refunds.
      The next example below shows how you would refund 25.00 EUR on an authorisation that has the pspReference 8836183819713023.
      curl https://checkout-test.adyen.com/checkout/v68/payments/8836183819713023/refunds \
      -H 'X-API-Key: YOUR_API_KEY' \
      -H 'Content-Type: application/json' \
      -d '{
          "merchantAccount": "YOUR_MERCHANT_ACCOUNT",
          "amount": {
              "value": 2500,
              "currency": "EUR"
          },
          "reference": "YOUR_UNIQUE_REFERENCE"
      }'
      String xApiKey = "YOUR_X-API-KEY";
      Client client = new Client(xApiKey,Environment.TEST);
      Checkout checkout = new Checkout(client);
      var paymentRefundRequest = new CreatePaymentRefundRequest();
      var amount = new Amount();
      amount.setCurrency("EUR");
      amount.setValue(2500L);
      paymentRefundRequest.setAmount(amount);
      paymentRefundRequest.setMerchantAccount("YOUR_MERCHANT_ACCOUNT");
      paymentRefundRequest.setReference("YOUR_UNIQUE_REFERENCE");
      String paymentPspReference = "8836183819713023";
      var response = checkout.paymentsRefunds(paymentPspReference, paymentRefundRequest);
    • When you receive the /payments/{paymentPspReference}/refunds response, note:
      • paymentPspReference: the PSP reference of the authorisation you want to refund.
      • pspReference: Adyen's unique reference associated with this refund request.
      {
          "merchantAccount": "YOUR_MERCHANT_ACCOUNT",
          "paymentPspReference": "8836183819713023",
          "pspReference" : "8412534564722331",
          "reference": "YOUR_UNIQUE_REFERENCE",
          "status" : "received"
      }
    • Wait for the REFUND notification webhook to learn the outcome of the refund request.

    REFUND webhooks

    To receive notifications about your refunds, you must set up notification webhooks.

    You get the outcome of the refund request asynchronously, in a notification webhook that includes:

    • eventCode: REFUND.
    • pspReference: the pspReference from the response for your refund request.
    • success: indicates whether the refund request was successful. Possible values:
      • true: the refund request was successful. This usually means that the refund was successful. For information on exceptions, refer to REFUND_FAILED webhook, and REFUND_REVERSED webhook.
      • false: the refund request failed. The webhook includes a reason field with a short description of the problem. Review the reason, fix the issue if possible, and resubmit the refund request.
    {
       "live":"false",
       "notificationItems":[
          {
             "NotificationRequestItem":{
                "amount":{
                   "currency":"EUR",
                   "value":2500
                },
                "eventCode":"REFUND",
                "eventDate":"2021-11-01T00:19:34+01:00",
                "merchantAccountCode":"YOUR_MERCHANT_ACCOUNT",
                "merchantReference": "YOUR_UNIQUE_REFERENCE",
                "originalReference":"8836183819713023",
                "paymentMethod":"visa",
                "pspReference":"8412534564722331",
                "reason":"",
                "success":"true"
             }
          }
       ]
    }

    For more information about the included fields, see the REFUND notification reference.

    Failed refund request

    When a refund request fails, you receive a REFUND webhook with success: false and the reason why the request failed. The next table shows the most common reason values in the REFUND webhook.

    reason Description
    Requested refund amount too high No chargeback or refund has been processed, and the requested refund amount is more than the balance on the payment.
    Already partially refunded, new requested refund amount too high Partial refund(s) has(/have) been processed, and the requested refund amount is more than the balance on the payment.
    Already partially disputed, new requested refund amount too high Partial chargeback(s) has(/have) been processed, and the requested refund amount is more than the balance on the payment.
    Already fully refunded, no balance available for new requested refund Full refund has been processed, and the remaining balance on the payment is 0.
    Partially refunded and partially disputed, no balance available for new requested refund Partial refund(s) and chargeback(s) have been processed, and the requested refund amount is more than the balance on the payment.
    Partial refund(s) and chargeback(s) have been processed, and the balance on the payment is a negative amount.
    Already fully disputed, no balance available for new requested refund Full chargeback has been processed, and the balance on the payment is 0.
    A full chargeback and partial refund(s) have been processed, and the balance on the payment is a negative amount.
    Insufficient in-process funds on account for refunding this payment There is not enough balance on your merchant account to process the refund.
    Transaction hasn't been captured, refund not possible The refund was requested before the transaction was captured. You need to cancel the transaction instead or wait until the transaction is settled.
    The maximum period for this operation has expired The refund was requested past the expiration date permitted by the payment method to process the request.

    Balance on the payment

    The balance on the payment refers to the amount that remains from the original payment. For example, if a transaction has a total of 10 EUR and no refund or chargeback is processed, then the balance on the payment is 10 EUR. After a refund or chargeback of 3 EUR is processed, the remaining balance on the payment is 7 EUR.

    REFUND_FAILED webhook

    Although rare, a refund can fail after you received a REFUND webhook with success: true. A successful REFUND webhook means that the request has been sent to the card scheme, but the refund can still be rejected by the card scheme. This can happen even a few days after you submitted the refund request.

    Most of the time Adyen can fix the issue, so that the shopper will eventually receive the funds. Sometimes, however, you need to take action yourself. To learn why a refund can fail and what, if anything, you need to do in each case, refer to Failed refunds.

    When a refund fails after you received success: true in the REFUND webhook, we inform you of this with another webhook containing:

    • eventCode: REFUND_FAILED
    • pspReference: the pspReference of the refund request.

    For more information about the included fields, see the REFUND_FAILED notification reference.
    An overview of failed refunds is available in your Payment accounting report.

    REFUND_REVERSED webhook

    For some payment methods, for example bank transfers, iDEAL, or Bancontact, the status of the payment can change from Refunded to RefundedReversed. This means that the funds have been returned to Adyen, and are back in your account. This can happen, for example, if the shopper's bank account is no longer valid. Before you retry the refund, contact the shopper about the status of their bank account.

    When a refund is reversed, we inform you of this with a webhook containing:

    • eventCode: REFUND_REVERSED
    • success: true

    For more information about the included fields, see the REFUND_REVERSED notification reference.
    An overview of reversed refunds is available in your Payment accounting report.

    See also