Sooner or later every business that accepts crypto has to give money back: a return, a cancelled order, a double payment, a service that didn't work out. With a card, you press a button and the processor reverses the charge. With crypto there is no button that reverses anything, so the refund has to be sent like any other payment. This guide explains how to do that without sending coins to the wrong place.
Why crypto refunds work differently
Card payments can be reversed by the card network, which is why they carry chargebacks. Crypto payments can't. As bitcoin.org puts it in its notes for new users, Bitcoin payments are irreversible, and a transaction can only be refunded by the person who received the funds. The same is true of USDT, USDC and every other coin you are likely to accept.
That has three consequences for a refund:
- You have to send it. The customer can't pull the money back, which protects you from chargeback fraud but makes refunds your job.
- It needs a destination: an address on the right network, chosen by the customer.
- It is final. If it goes to the wrong address, getting it back depends on whoever controls that address.
Why asking for an address in chat is risky
The usual way to refund crypto by hand is to message the customer, ask for an address, copy it into a wallet and send. Each step leaves room for a mistake:
- Typos and partial copies. Addresses are long strings with no meaning to a human eye. A missed character, or a copy that cuts off the end, can produce an invalid address or, on rare occasions, someone else's.
- The wrong network. A customer who paid in USDT on Tron may reply with an Ethereum address, or with an exchange deposit address for a different network. Our guide to crypto sent on the wrong network explains why that can go wrong.
- Missing memos and tags. Exchange deposit addresses on TON and the XRP Ledger often need a memo or tag. Without it, the exchange may not know which account to credit.
- Impostors. Anyone who can write to you in the same chat, a lookalike account, or someone with access to the customer's email can send an address that isn't the customer's.
- No record. The address ends up buried in a message thread, unlinked to the order, which makes later questions hard to answer.
Refund links: let the customer enter the address
A refund link turns the process around. Instead of you collecting an address and typing it in, the customer opens a private page tied to the original payment and enters the address themselves. The page fixes the coin and the network, so the customer only has to supply an address that receives that coin on that network.
- The customer types or pastes their own address, so your team never handles it.
- The coin and network come from the original payment, which removes the network mix-up.
- A confirmation step reminds the customer that the transfer can't be reversed.
- Each link can be claimed once, and an unclaimed link expires, so an old link can't be reused.
- The refund is recorded on the payment it belongs to.
A link doesn't make the customer infallible. They can still paste a wrong address. But the mistake is now in the hands of the one person who knows which address is theirs, and it happens on a page that tells them exactly what is needed.
Who pays for a crypto refund
A refund has two kinds of cost, and it is worth deciding in advance who carries each one.
| Cost | What it is | On Crypto Merchant |
|---|---|---|
| Network fee | The blockchain's fee to send the refund, paid in the network's own coin | Taken from the refund |
| Payment fee | What the gateway charged on the original payment | The 1% fee is not returned |
| Exchange deposit rules | Some exchanges set minimum deposits or need a memo or tag | Up to the customer's exchange |
Network fees vary a lot by network. Refunding USDT on Ethereum can cost far more than the same refund on Tron, Solana or Polygon. Our guide to crypto network fees explains why.
Partial refunds and price changes
Many refunds are partial: one item out of three, a discount after a late delivery, a cancelled add-on. In crypto, a partial refund is simply a smaller transfer in the same coin.
Coins or dollars?
With stablecoins, the number of coins and the dollar value are the same, so there is nothing to decide. With Bitcoin, Ether or other coins whose price moves, the value of the original payment changes over time. You can refund the same number of coins the customer sent, or the same dollar value at today's price. Neither is wrong, but your refund policy should say which you use, so nobody is surprised.
Keep the original coin
Refunding in the coin and network the customer paid with is the simplest rule. The customer already has a wallet for it, and you are not mixing a refund with a currency exchange.
Refunding a payment on Crypto Merchant
On Crypto Merchant, refunds after a payment work through refund links. Only Admins can create them, and they first confirm it's them with a fresh code from their email or authenticator app.
- 1
Open the paid payment and choose an amount
Refund any amount up to what you kept from that payment: what was credited to you after the 1% fee, minus earlier refunds and links still open.
- 2
The amount is set aside
It leaves your available balance straight away, so it can't be paid out by mistake while the customer decides.
- 3
The customer gets the link
If the payment has the customer's email, they get an email with a private link. You can also copy the link and send it yourself.
- 4
The customer enters their address
They enter their own address for that coin and network, tick a confirmation and submit. The refund is sent from your pool wallet, and the network fee is taken from the refund.
- 5
Or it comes back to you
Links stay open for 14 days. If the customer doesn't claim it in time, or you cancel it, the amount returns to your balance automatically.
A partial refund keeps the payment marked paid and shows the refunded amount. Refunding everything you kept marks it refunded. Developers get an invoice.refunded webhook on each claim, and the invoice object shows the total in refunded_amount. The checkout docs have the details.
Two cases are handled before you ever need a refund link. A customer who pays too little can ask for their coins back from the invoice page, and one who overpays can withdraw the extra there. See underpaid and overpaid crypto payments. If you share revenue with partners, a refund doesn't take back shares already set aside for them, which our guide to revenue splits covers.
Writing a crypto refund policy
A short, clear policy shown before people pay prevents most refund arguments. It should answer:
- When you refund at all, and within how long after the purchase.
- That refunds go back in the coin and on the network the customer paid with.
- Whether you refund the number of coins paid or the dollar value, for coins whose price moves.
- Who pays the network fee for the refund.
- That the customer enters their own address on a refund page, and that a refund sent to the address they enter can't be reversed.
- How long they have to claim a refund before it lapses.
You are the seller, so the policy is yours to set. Crypto Merchant only carries out the refunds you create. If you haven't set up a store yet, creating an account is free.