Payback time

If you want to know how to receive money via online transactions, you have to know, how to pay it back.

Why refund?

There are different reasons for paying customer their money back:

  • (obvious) Customer is not happy about the product. In different countries there are different periods, when customer has right by law to return a product and ask for a full refund. Normaly in Europe it ranges from 7 till 14 days. Software companies normally extend this period as an additional bonus.
  • Customer got confused with payment and paid twice or paid the wrong amount. This is especially applicable to a complex payment methods like iDEAL or bank transfers.
  • Your shop is a victim of a fraud. Somebody has purchased some products with stolen credit card numbers. In theory it’s insured by the credit card company, and even if it’s not, the customer can initiate a charge back. But you don’t want this, because too many of such incidents and you’re considered a “bad shop”

In all those situations it’s always better to pay this client back the whole amount and focus on the other clients. People do appreciate if you give them money. Even if it’s their own money and they are really frustrated about the services of your company. There is a magic in a small amount of cash coming to you.  I’ve got a lot of crazy, rude and loud clients on the phone, demanding satisfaction. I’m yet to meet one, who wouldn’t calm after I promise him some money.

How to refund?

So how easy is to pay money back technically? It depends on the type of online payment you use.

In most situations, you’re going to use some information from your PSP (Payment Service Provider). They all are trying to provide you the best services they can, but sometimes you have limits. A lot of financial information is provided to you on “need to know” basis. You can’t have the credit card numbers of your clients unless your company is PCI-certified  You don’t get the bank account number if you initiate some automatic bank transfers, etc. This make your life a bit harder. Let me explain in details how do you make a refund with different payment methods using Ogone as a PSP and Rabobank as  a bank.

Refund with credit cards

Normally its the easiest part. Even if you don’t have the credit card number of the client, your PSP does. And It can initiate the charge back with one mouse-click. 


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The money appear on the client Credit Cards account in a couple of days.

Refund with iDEAL

An a nutshell, iDEAL is bank transfer.  The money go directly from the account of the client to yours. PSP doesn’t have access to your bank account. So it’s only you or your bank can do it. Postbank does  provide a button for the refund of an iDEAL transaction, but, surprisingly, it does nothing!


I’ve hidden the private data of the client

Nothing happens if you click on “Terugboeken” (Pay back). It’s just a registration of the refund for your accounting (according to Rabobank support). You have to perform the refund yourself. 

In order to perform a refund, you have to know 2 things:

  • account number of the client
  • his name

Fortunately in the situation with iDEAL you can get this information from your PSP:


OK, I had to hid it again, but there was a real account number and name of the client

With this information you can go to your online banking client and perform the transaction manually.

Refund with bank transfer

If you think it’s complicated with iDEAL, wait for the next one, bank transfer. You can ask your customer for a bank transfer directly, by giving him the instructions to pay certain amount to a certain account or, better, you can ask for a permission to make a charge on the account of the client. I don’t want to go to deep into details of bank transfers, I really hope they will die soon as an online payment method. But in any case, your PSP doesn’t give you the account number of the client!



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Please note that there is a button for refund. But it also is not doing what it supposed to do. Instead PSP is trying to help you as much as they can. It sends you per email a fax template, which you can fax to your bank in order to refund this bank transfer. So much for online!

You basically have to ask your customer for a missing account number. Which he finds strange, he gave it to you during the payment, why don’t you have it when it’s time to refund. But we have to live with it. Bank transfers are only for the clients who don’t have credit cards or online banking service. Those, who have paid in the old-fashioned way for 50 years and don’t trust the computers. Again, I hope not for long!


To summarise, refund operations with credit cards are the easiest, PSP provides all required infrastructure to perform it. iDEAL is a bit harder, banks should realy keep up with automatising of their iDEAL back-office. With bank transfer is a huge pain to make a refund. 

And again: refunded customer is a happy customer. And happy customer is a way to more customers!

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