Refunds

Refunds allow you to quickly and easily refund customers for ACH debit transfers.

Use /transfer/refund/create to create a refund for a debit transfer. Pass the ID of the transfer you'd like to refund as transfer_id in the request, and specify the amount of the refund with the amount field. The amount of a refund can't exceed the amount of the refunded transfer.

You can also initiate a refund directly with the Plaid Dashboard.

Refunds come out of the available balance of the ledger used for the original debit transfer. If there are not enough funds in the available balance to cover the refund amount, the refund will be rejected. You can create a refund at any time. Plaid does not impose any hold time on refunds.

If you choose to issue a refund for a debit transfer within 2 business days of the settlement date of the original debit transfer, the debit could still return for insufficient funds. Debits to consumers can return as “unauthorized” for up to 60 calendar days.

Use /transfer/refund/cancel to cancel a refund. You can only cancel refunds before they've been submitted to the ACH network for processing.

Plaid creates an event any time the status of a refund changes. Refund events are prefixed with refund. and have a non-null refund_id in the event object. See event monitoring for more information on monitoring events.

Refund events will have many of the same characteristics as the original payment. They will have the same account_id, as well as having the same transfer_type and a positive transfer amount. For example, if you were to refund $5 from a customer's debit transfer of $100.00, that refund will be displayed in the events queue with a debit transfer type and a "5.00" transfer amount.

If an end user claims that a transaction is unauthorized and initiates a return request, their bank may contact Plaid to request a Proof of Authorization (POA). POA requests will only ever be sent to Plaid, and not directly to you. Plaid will then contact you to request any additional information needed.

When making debit transactions, it is important to collect and store POA for NACHA compliance and to dispute return requests if necessary. Transfer UI contains a built-in flow that captures NACHA-compliant POA. If not using Transfer UI, you must collect your own POA. For more details on best practices for collecting and storing POA, see NACHA guidance.