Refund

What is a refund?

A refund is the process by which a merchant, whether operating in a physical store or online, reimburses all or part of the value of a transaction to a customer after a purchase has been made. It applies when the customer is dissatisfied with the product or service received, or when the transaction must be reversed for legal or contractual reasons.

From a more technical perspective, a refund involves reversing a previously authorised transaction and returning the funds to the same payment method used for the purchase. This process can be managed through a virtual point-of-sale (POS) system or an online payment gateway, ensuring that the reimbursement is processed securely and can be fully tracked.

Types of refunds

Refunds can be classified according to the type of reimbursement or compensation received by the customer:

• Full refund: the customer receives the entire amount paid, including taxes and shipping costs (where applicable). This is the most common type of refund when a customer is dissatisfied with a purchase.
• Partial refund: only part of the amount paid is reimbursed. For example, when a single item is returned from a multi-item order or when a discount has been applied.
• Product exchange: instead of receiving a monetary refund, the customer exchanges the item for another of the same value. This is commonly used to manage different sizes, colours or models without issuing a refund.
• Store credit: the customer receives credit equivalent to the value of the returned item, which can be used to purchase other products from the same retailer.
• Refund with compensation: in addition to the refund, the merchant offers extra benefits such as vouchers, coupons or promotional incentives to encourage future purchases and improve the customer experience.

Common reasons for refunds

Refunds are a common occurrence in ecommerce. According to industry sources consulted by EFE, more than 25% of online purchases in Spain are ultimately returned, a figure that can increase during sales periods or special promotional campaigns.

The most common reasons for refunds in ecommerce are:

• Defective, damaged or incomplete product.
• Order error or product with characteristics different from those requested.
• Order cancellation before dispatch.
• Customer dissatisfaction with the product received.
• The product does not match its description.
• Exercise of the right of withdrawal (returning a product without providing a reason within the legally established period).
• The order was received later than the estimated delivery date.