What is a refund?

When you issue a refund through a payment provider, the money does not come out of thin air: it leaves your balance with the provider and travels back through the bank or card network. Razorpay’s documentation, at the time of writing, describes three kinds, and other providers have similar ones:

• Normal refund: the amount is refunded within 5 to 7 working days.
• Instant refund: the amount is refunded almost immediately. Razorpay’s FAQ says this carries a small fee, while regular refunds are not charged.
• Batch refund: you upload an XLSX or CSV file to refund many payments at once. Razorpay says a file is picked up for processing after 70 minutes, and you can cancel it before then.

Razorpay’s FAQ adds that you can refund the full amount, which is the default, or a partial amount that you enter yourself. It also warns that a refund is immediate, so once issued it cannot be cancelled or reversed.

Razorpay says it only makes source refunds, meaning the money returns to the payment method the customer used. A card payment goes back to that card, and a UPI payment goes back to the UPI ID used to pay. You cannot send a refund to a different account instead.

• Fees and taxes charged on the original payment are not reversed by a regular refund, according to Razorpay’s FAQ. A full refund to the customer can therefore cost the seller a little.
• Normal refunds are not possible for a payment more than 6 months old, per Razorpay’s page.
• If your balance with the provider is lower than the refund, you wait for more payments to arrive or add funds from the dashboard.
• A refund can sit in a pending state while the bank processes it. A provider webhook or dashboard status tells you the final result, so don’t mark the order closed on the first response.

A chargeback is different: the customer asks their own bank to take the money back, and you answer a dispute. Razorpay says sending money only to the original method is meant to prevent chargebacks, and its instant refunds carry a reference that can serve as proof if a dispute follows. A prompt, polite refund is usually cheaper than a dispute.

Tip: Put your refund terms where buyers see them before paying: what is refundable, within how many days and how to ask. Consumer rules differ by country and by what you sell, so check the rules that apply to you.