Understanding the Implications of Early Refunds and the ACH Protection Period

We want to shed light on an essential aspect of our platform: the ACH Protection Period. This feature plays a crucial role in ensuring the security and reliability of bank payment refunds, and we believe it's essential for all our merchants to understand its implications.

Understanding what happens when you process an early refund for bank payments. It's essential to understand the implications of this action to ensure a smooth and secure payment process. Here's what you need to know:

When you issue a refund for a bank payment before the payment is fully processed, you're essentially sending the payer their money back with the expectation of receiving the same amount from them via the payment. However, at this early stage, there's no guarantee that the payment will be successful.

If the payment fails due to reasons like insufficient funds, the refund may still go through successfully. This scenario can result in both a refund and a dispute, ultimately leading to a financial loss instead of breaking even.

To address this risk, Paystand has implemented the ACH Protection Period, which acts as a safeguard against premature bank payment refunds during the first week after the payment.

During this protection period, refunds for bank payments are blocked by default. The purpose of this block is to mitigate the potential financial losses that merchants may incur due to failed payments and subsequent refunds. However, we understand that there may be exceptional cases where expedited refunds are necessary.

If you find yourself in a situation where you need to expedite a refund during the ACH Protection Period, please Submit a Request to the Support team. Our team will assess the request and, if deemed appropriate, expedite the refund after discussing the associated risks with you.

We encourage all our merchants to familiarize themselves with the ACH Protection Period and its implications. By understanding this feature, you can make informed decisions regarding refunds and minimize the risk of financial loss.

Related Resources:



Was this article helpful?
0 out of 0 found this helpful