COVID-19 Some Guidance on Credit Card Refunds

French Duncan | 26 March 2020


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Credit Card Refunds during COVID-10 – Some Guidance

Written 11am Thursday 26th March 2020.

In the current climate many businesses will be experiencing high volumes of deposit refund requests. This will not only have a negative impact on cash flow, but could also leave the business at risk of fraud and in breach of Payment Card Industry (PCI) and Anti-Money Laundering requirements. Therefore, it is more important than ever that procedures and processes are adhered to, and robust monitoring and control procedures are in place. Some examples of additional risk which you should be considering carefully are as follows:-


  • Credit card refunds being processed onto cards where no original payment was taken
  • Employees refunding their own cards to gain access to cash
  • Refunds requested by bank transfer when already paid by card and also following charge back process
  • Fraudsters claiming funds transferred to bank and demanding refunds to cards
  • Theft of credit card details not stored or destroyed correctly for fraudulent use
  • Increase in identity theft with the intention of gaining credit/debit card facilities to evade payment for goods/services
  • Increased numbers of customers not present transactions resulting in no business protection via Chip & Pin


  • Risk of unsafe recording of credit/debit card details outwith normal secure systems e.g. PMS/POS
  • Card numbers communicated verbally, written down and not destroyed safely
  • Address, CVV verification not adhered to
  • Employees who have not previously dealt with payments/refunds now having to process them due to only lock down teams in place not necessarily trained

Anti-Money Laundering

  • Refunds being processed by alternative payment methods to obtain clean funds
  • Illegitimate funds introduced into a legitimate financial system e.g. paying funds into a bank account and then requesting a refund

To protect your business it is important that the points below are adhered to where possible:

  • Only a select group of trained employees are in a position to refund or process payments
  • Refunds are processed to the original payment method only
  • All refunds are authorised by Management in accordance with Standard Operating Procedures
  • All payment systems have a setting which should be turned on to prevent refunds to cards with no previous debit activity
  • Card refunds should only be processed via secure channels where possible
  • Any full card details written or communicated should be destroyed immediately after use
  • Any bank transfer refunds should be fully verified against the bank and any suspicious activity escalated

If you have any questions or concerns on this please do not hesitate to get in touch any of our team.


Other COVID-19 Information:

For all our help, support and information around COVID-19 / Coronavirus visit, where you can link to articles HMRC deferralsbusiness loans including Coronavirus Business Interruption Loan Scheme (“CBILS”), personal tax & self-assessmentdebt assistance & restructuring and much more.





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