Refund Authorization
Learn what refund authorization is and how it works.
Overview
Unzer processes refunds as online authorization-based credit transactions.
Each refund is submitted to the card issuer for real-time validation. The issuer reviews the transaction and either approves or declines it. The issuer’s decision is final.
Previously, refunds were not subject to real-time issuer authorization.
Regulatory & Scheme Compliance Rationale
This change aligns refund processing with Visa and Mastercard rules for credit transactions.
Refunds must:
- Be processed through the card network
- Be linked to the original transaction
- Support issuer validation
- Maintain proper transaction traceability
To meet these requirements and reduce compliance risk, refunds are now submitted for issuer authorization.
Transaction Flow
Online Refund – Sequence Diagram
What Changed?
| Before | Now |
|---|---|
| No issuer authorization | Issuer authorization required |
| Technical validation only | Real-time issuer validation |
| Refunds rarely declined | Refunds may be declined by issuer |
| Limited issuer visibility | Full network traceability |
Merchant Impact
Refunds May Be Declined
Refunds are subject to issuer approval and may be declined due to:
- Closed, blocked, or expired cards
- Original transaction mismatch
- Refund amount inconsistencies
- Issuer risk or policy controls
If declined:
- Review the issuer response code, refer to:
- Retry only if appropriate.
- Ask the cardholder to contact their issuing bank if needed.
- Consider an alternative refund method if the decline persists, such as:
- Cash
- Bank Transfer
- Credit
No Change To
- Refund API structure
- Refund initiation process
- Settlement timelines (subject to issuer approval)
FAQ
Why was my refund declined?
The issuing bank declined the refund during authorization. The decision is made by the cardholder’s bank.
Can Unzer overrule the decline?
No. The issuer’s authorization decision is final.
Can I force a refund?
No. Refunds must be authorized by the issuer.
Can I retry a declined refund?
Yes, a declined refund may be retried depending on the issuer’s response code. Before attempting a retry, always review the response code to determine whether a retry is permitted.
For detailed guidance, refer to:
If the response code indicates that a retry is not recommended, consider alternative refund options such as Cash, Bank Transfer, or Credit transfer.
What happens if the original transaction cannot be found?
The issuer may decline the refund if the original transaction reference cannot be matched.
Is this change mandatory?
Refunds are processed according to card network standards requiring proper online processing and issuer validation.