Someone’s stood at your counter with a jumper back in the bag, wanting their money returned, and pressing refund is about to feel like the easy part of this. Learning how to refund a card payment on your machine is quick. Working out what it actually costs you, and how long the customer will wait before they start ringing you about it, takes a bit longer. Here’s the whole picture, not just the button.
TL;DR
- Pressing refund on the terminal takes seconds. Getting back the fee that refund costs you is a different question, and some providers keep it.
- A refund is your call. A chargeback is the bank’s, and the money moves through a completely different process.
- It’s done at your end the moment you authorise it, but how long it takes to land on the customer’s statement depends on their bank, which is why they may ring you before it’s actually late.
- Refund windows, daily limits and whether you can send money to a different card all vary by provider. That’s a contract question, not a terminal question.
- The Consumer Rights Act 2015 and the Consumer Contracts Regulations 2013 set out when you have to refund a customer, by when, and what else you owe on top. Online sellers: that includes the delivery they paid.
How to Refund a Card Payment on Your Machine: the Actual Sequence
On a modern terminal it’s quick. You find the original transaction, either by scrolling through recent sales or scanning the receipt for a reference number, match the amount you’re giving back, and authorise it much the same way you’d take a payment in the first place: a manager code, a PIN, or a tap, depending on how the machine’s locked down.
You can usually refund in full or in part. Give back £45 of an £80 order and that’s a partial refund. Give it all back and that’s a full one. Either way, it should trace directly to the original sale rather than being rung through as a brand new transaction, because that’s what your own records, and your accountant, will expect to see later.
There’s usually a cut-off point, too. Refund something the same day and it can sometimes be voided before it’s even settled, though how it’s charged depends on your provider. Refund it after your daily batch has closed and it’s processed as a proper refund instead, with everything that comes with that. Check with your provider which side of that line you’re on before you assume it’s the cheap option.
A Refund Is Your Call. A Chargeback Isn’t.
Refund and chargeback get used interchangeably, and they’re not the same thing at all. A refund is something you decide. You find the transaction, you press the button, the money goes back, and the customer relationship stays in your hands the whole way through.
A chargeback is different. The customer rings their bank instead of you, the bank pulls the money back through the card scheme, and you find out after it’s already gone. You get a say through evidence and appeal, but you don’t get to decide the outcome. That’s the bank’s call, not yours.
The distinction matters because the two cost different things. A refund costs you the sale and, with some providers, the fee that came with it. A chargeback costs you the sale, and your provider may charge a separate fee for handling it, so check your contract. Sort a genuine complaint out with a refund before it turns into one of those, and it can work out cheaper.
The Fee You Don’t Get Back
Here’s a bit that isn’t always explained when you sign up. Providers charge a processing fee on transactions, and some keep that fee when the transaction is refunded, so check yours. You’ve given the customer their £80 back. You haven’t necessarily got your fee back.
It’s a small number on one sale, easy to miss. It stops being small once returns become a normal part of how you trade: clothing, homeware, anything bought without trying it on first, anywhere with a returns policy generous enough that people actually use it.
Check whether your provider also charges a separate fee for processing the refund itself. That policy sits in the fees schedule, not on the terminal screen at the point you press the button. Hidden costs like this one are exactly why it’s worth reading the small print once, properly, rather than finding it out a return at a time.
Worked example: Sell a jumper for £80 and refund it in full, and if your blended rate works out around 1.5% and your provider keeps the fee, you don’t get the £1.20 processing fee back either. So the sale and the refund together leave you £1.20 down, not back where you started. Scale that up: say a shop takes £120,000 in card sales in a year and 8% of it comes back as refunds. That’s roughly £9,600 refunded, and about £144 in fees it never sees again, before any separate refund handling fee a provider might charge on top of that.
Why the Money Leaves You Before It Reaches Them
At your end it’s done the moment you authorise it. Depending on your provider, the money either comes straight out of your account or gets netted off your next settlement, so check which yours does before you plan your week around it. Either way, you’re not getting it back.
The customer doesn’t see it that fast. Card refunds travel back through the same network the original payment used, and how long it takes to show on the customer’s statement depends on their bank. Nothing’s actually wrong. It’s just how the rails work, the same rails that decide your normal settlement time when the money’s coming the other way.
That gap is what prompts the “did my refund even go through” phone call. Tell them at the counter. Give them a rough number of days. It costs you nothing, and it can stop the follow-up call before it starts.
Refund Windows, Daily Limits and Different Cards: Read Your Contract
How long you’ve got to process a refund after the original sale, whether there’s a daily cap on how much you can refund, and whether you can send the money to a different card at all: none of that is fixed. It varies by provider, and it’s set out in the contract you signed, not on the terminal screen.
The refund button works the same basic way whether you’re running a Teya Pro, a SumUp reader or a Clover Mini. What happens behind it, the windows, the limits, the exceptions, is where providers genuinely differ, and it’s easy to forget to ask about before signing.
Refunds are one of the details to check when you use our free recommendation tool to compare machines, and ask about refund terms before you sign, not after you’re stuck with it. Four questions, live rates from 8 providers, or call Paul on 0800 151 2209 and he’ll talk you through it.
What the Law Actually Makes You Refund, and By When
None of this is about opinion. There’s actual law covering some of it, and understanding how to refund a card payment properly means knowing which rule applies to which sale.
Buy something faulty, not as described, or it simply doesn’t do what it’s meant to, and the Consumer Rights Act 2015 gives the customer a right to a refund. They get 30 days from delivery to reject the item outright and have the full amount back. Once you’ve accepted they’re owed it, the Act gives you 14 days to actually pay it, using the same method they paid with, and you can’t charge them a fee for handling it. Gov.uk’s guidance on accepting returns sets out the practical detail. Sale items count exactly the same as full price.
Sell online, by phone, or off-premises, and a different set of rules kicks in. The Consumer Contracts Regulations 2013 generally give the customer 14 days from receiving the item to tell you they want to cancel, and a further 14 days to send it back. You then have 14 days to refund them, counted from the day the goods land back with you or the day they show you evidence of having posted them, whichever comes first. That second one catches people out. Refund by the method they paid with, don’t deduct a fee unless they’ve handled the item beyond what they’d have been allowed to do with it in a shop, and remember you owe them the delivery they paid on the way out too, up to the cost of your standard option. None of that applies to a walk-in sale in your shop.
PCI DSS is a different thing again, and it’s worth separating the two out because people mix them up. It’s a contractual requirement from the card schemes about keeping card data secure, not a law, and it has nothing to do with when you owe someone a refund.
None of this tells you that your own setup is compliant, because that depends on exactly how you sell and what you’ve agreed with customers. It tells you what the rule says. Check it against your own paperwork. One thing worth knowing while you’re in there: gov.uk is blunt that restricting or taking away a customer’s refund rights, or misleading them about what those rights are, is against the law. A “no refunds” sign in the window doesn’t do what the person who put it up thinks it does.
FAQs
How to refund a card payment without losing the processing fee?
It depends on your provider. Some keep the fee from the original sale even when the transaction itself is reversed, and some may charge an extra fee for handling the refund itself. Ask your provider directly what their policy is.
How long does a card refund take to reach the customer?
At your end it’s done as soon as you authorise it, and depending on your provider the money either leaves straight away or comes off your next settlement. Either way, how long it takes to appear on the customer’s statement depends on their bank, and a bank holiday weekend can add to it. That’s normal. Not a fault on your machine, and it’s worth explaining there and then so they’re not ringing you three days later thinking it never happened.
Can I refund to a different card than the one used to pay?
Usually not. Refunds generally go back to the card that made the original payment, but check your provider’s rules. If the customer’s lost that card or it’s since expired, ask your provider’s support team what the alternative is. It isn’t something the terminal will necessarily let you choose on the day.
Do I have to give a refund if the customer just changed their mind?
Depends how they bought it. In person, over the counter, generally no, unless the item’s faulty, not as described, or doesn’t do what it’s supposed to. Bought online, by phone or off-premises, the customer typically has a legal right to cancel and get their money back within a set window, even when there’s nothing wrong with the item at all. Check gov.uk’s guidance on returns and refunds for exactly what applies to your sale.
Ask About Refunds Before You Sign, Not After
Refund handling is one of those questions that’s cheap to ask before you sign and expensive to discover after. It’s easy to ask only about the headline rate and the monthly cost. Questions worth asking: what happens to the fee when a sale gets reversed, how many days a disputed refund takes, and whether the terminal will let you refund a card that’s since expired. Ask all three. Those are the questions worth putting to a provider, and they’re exactly the kind of thing a proper card machine contract check should cover, not something you find out three months in.
It’s also, genuinely, one more reason to see every contract length up front. If a provider’s refund handling turns out to be poor, a long fixed term is a long time to live with it, while a no-contract option leaves you free to walk.