How a change in refund status affects transaction status

You might need to refund your customers for a transaction for one reason or the other. This could be due to a cancelled order or any other reason as agreed between you and your customer(s).

While the refund process still remains the same, we have made changes to the interface on the dashboard as well as included the different states a refund can go through.

How the status of a refund affects its associated transaction status

When you initiate a refund, the status changes based on the feedback we get from the bank or refund processing partner. The change in the refund status also affects the status of the refunded transaction.

Here are the different states a refund and the refunded transaction can go through:

1. Pending: When you initiate a refund on a transaction from your dashboard or API, the refund returns a ‘Pending’ status which signifies that we have initiated the refund on our end. At this point, the refund amount is deducted from your next payout or balance (for Registered Businesses), and the status of the refunded transaction changes from ‘Success’ to ‘Reversal pending’.
2. Processing: The status of the refund changes from ‘Pending’ to ‘Processing’ as soon as the processor receives the refund while the status of the refunded transaction still remains ‘Reversal pending’ for this refund state.
3. Processed: When the refund has been successfully processed to the customer, the status changes from ‘Processing’ to ‘Processed,’ and the refunded transaction status also changes from ‘Reversal pending’ to ‘Reversed.’
4. Failed: If the refund could not be successfully processed, the status of the refund changes to ‘Failed,’ and the refunded transaction changes from ‘Reversal pending’ to its initial ‘Success’ status. The deducted refund amount is also added back to your payout.

Here’s a flow chart illustrating how the refund status affects the transaction status:

If a refund fails, there are two ways you can resolve it:

• Process the refund on your end by making a direct transfer to the customer.
• Reach out to support@paystack.com to help you complete the refund to the customer. You’ll need to provide the details of the transaction as well as the bank account details of the customer so we can help process the refund to them.