This page explains how to issue refunds for ACH debits using PCE, from customer request through funds re-credit. You’ll learn about the end-to-end refund flow, timing expectations, and how to handle both full and partial refunds.

Prerequisites

• The original ACH debit must have settled (1–2 business days) before a refund can be initiated.
• Merchant must be enabled for ACH “push” credits.

Limitations

• Refunds process in batch and cannot be expedited in real time.

Compliance / Regulation Mandates

Refund Workflow

1. Customer Request

   • Customer contacts merchant to request a refund for a settled ACH debit.

2. Merchant Initiation

   • Merchant calls the PCE ACH-credit (refund) API or submits a bulk file to create a “push” transaction.
   • The ODFI packages the refund as an ACH credit destined for the customer’s RDFI.

3. Batch Processing

   • Refund entries are sent in the next ACH batch to an ACH Operator (The Clearing House or Federal Reserve).
   • Operator sorts and routes the credit to the RDFI.

4. Funds Deposited

   • RDFI debits its reserve account and credits the customer’s account.

Timelines and Dependencies

• Refund Settlement: 3–5 business days from initiation.
• Cut-off Times: Subject to each bank’s ACH transmission windows.
• Original Settlement: The initial debit must post and clear (1–2 business days) before refund initiation.

Full vs. Partial Refunds

• Full Refund

  • The refund amount equals the original debit.
  • Use when canceling or reversing an entire transaction.

• Partial Refund

  • Refund only a portion of the original debit.
  • Ideal for item-level returns or prorated credits.
  • Supported via the same ACH-credit API—simply specify a lesser amount.

Implementation Notes

• API vs. Bulk Upload:

  • Single refunds can be initiated via the PCE REST API.
  • High-volume refunds can be uploaded as NACHA-formatted files.

• Reconciliation:

  • Include the original transaction’s trace number or external reference in your addenda to link refunds to debits.

• Error Handling:

  • If RDFI rejects a refund (e.g., invalid account), PCE will surface a return file which you must handle per Nacha return rules.