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You can refund payments to customers when necessary, such as for returned items or cancelled orders. Refunds can be initiated from the Merchant Dashboard or through the API. When you submit a refund request, the system accepts it instantly. However, you receive the outcome of the refund asynchronously through a REFUND webhook.

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Refund options

You can process the following types of refunds:
  • Full refund: Refund the entire captured amount.
  • Partial refund: Refund a portion of the captured amount.
  • Multiple partial refunds: Process multiple partial refunds for a single payment. The total of all partial refunds can’t exceed the captured amount.
Some payment methods don’t support partial refunds.
After you initiate a refund, it can take 7 to 10 business days for the funds to be returned to the customer’s account, depending on the payment method.

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Refund lifecycle

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Refund a payment

Cashfree supports two types of refunds:
  • Merchant-initiated refunds: Refunds that you initiate from your dashboard or API.
  • Auto refunds: Funds that are reversed to the customer when the payment TTL is breached. For more information, see Payment time to live (TTL).

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Single refund

You can initiate a refund for individual transactions directly from the dashboard. Use this option to process refunds for specific payments that require customer service or order corrections.To initiate a single refund:
  1. Log in to the Merchant Dashboard.
  2. Go to Payment Gateway > Transactions > Payments.
  3. Search for the transaction that you want to refund.
  4. Select Initiate Refund.

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Multiple refunds (batch)

Use the Batch Refunds feature to initiate refunds for a large number of payments at a time. Add all the required refund details in a single file as per the required format and upload the file.To initiate a batch refund:
  1. Log in to the Merchant Dashboard.
  2. Go to Payment Gateway > Transactions > Refunds > Batch Refunds > Upload File.
  3. Download the sample file to know the refund details required in the batch file.
  4. Read the upload instructions before you upload the file.
  5. If the file isn’t in the suggested format, it won’t be uploaded. Resolve any errors in the uploaded file and reupload it.

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Auto refunds

Auto refunds are refunds triggered automatically for unsuccessful payments, disputes, duplicate payments, or instances where payments are received directly to your VPA, regardless of whether an order has been generated. Auto refunds usually occur when customers:
  1. Make a payment after the order has reached a terminal state.
  2. Make a direct payment to the UPI ID.
Auto refunds differ from standard refunds because they handle refunds that occur automatically (such as failed payment attempts) rather than manual refunds tied to specific orders. Since these automatic refunds may occur before an order is created, they don’t contain the usual order-related data fields that are mandatory in standard refund webhooks. You can view the auto refund webhooks here.

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Refund communication

Customers are kept informed about their refund status and stay up to date on every stage of the process. Refunds, as reversals, involve multiple stages—initiation, processing, cancellation, and potential delays—that are essential to monitor. With refund communication, customers receive timely notifications, helping build trust and satisfaction. Customers can also use Cashfree Customer Hub to track these refunds better.

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Refund wallet

A refund wallet is a dedicated balance pool for processing customer refunds, separate from your main settlement account. This separation streamlines refund management and improves cash flow control.
Refund wallets offer a streamlined and efficient solution for managing your refund process. The following table provides more information:
ScenarioWithout refund walletWith refund walletAdvantages
You want to initiate a refund of ₹500Current balance = 0

Refund goes on hold		Current balance = 0

Refund wallet balance = ₹5000

Refund successfully processed		✅ Refunds without delays
Receive your settlements in fullCurrent balance = ₹5000

Refund adjustments = ₹4300

Settled amount = ₹700		Current balance = ₹5000

Settled amount = ₹5000		✅ Effortless reconciliation