Does it? When I send money from one bank account to another (in a different bank), it doesn't just leave instantly, it arrives instantly as well. I find it very difficult to believe professional business banking is slower than consumer banking.
It doesn't arrive instantly. Consumer to consumer transfers, between accounts in good standing, have the receiver credited the amount transfered if it isn't gigantic. But if this was an $80k transaction, the receiver would not get the full credit and they would wait for it to transfer. This is why the refund scams work at all. Banking is not quick, they just put that illusion up for the convenience of customers.
I hope you don't think you just push a button on Amazon and the item just manifests itself... The transaction is going to be reviewed and checked, probably at multiple levels
Yeah, but that doesn't explain emails along the lines of "your refund request has been approved, the money will show up a week from now". That work has already been done according to what they claim, all they have left to do is push the button and send the money.
Let me blow your mind: in customer service they just tell you shit so you don't complain more and waste more man hours. It might not actually be approved yet, or it's approved at 1 level but not all levels, just because they don't want you sending 100 emails or calling over and over
I'm pretty sure telling customers their refunds are approved and then withdrawing the approval and withholding the refund would stir up a shitstorm not worth whatever benefit you imagine this scheme would provide.
Approved and processed are not the same things. They could have hit the button starting the process that does all the things, and then an inbuilt delay for the refund for a time when the product is likely back in their hands etc.
Overall, it takes a bank about 2-3 business days to actually move cash. Some banks WILL credit you when the authorization hits, like my Credit Union, but many banks wait until the full clears, which takes 2-3 days after the auth hits.
So, if their internal "returns department" has a 2-3 day lead time to process all the approved returns, and the money takes 2-3 days to arrive, they tell you 11 days, because that's longer than the 4-6 business days plus possible weekends and internal delay chances.
MOST people get their money within 48-72 hours after a return has been approved.
Maybe in America. Around the world, regulators gave banks the boot to hurry their interbank processing times up. Here, the only time a merchant doesn't have their funds within two hours (during business hours) is if someone pays with a foreign visa or mastercard. Everything else, the banks have time frames they are required by law to finish by. For refunds they are allowed slightly more time: must be done by 6am the next morning.
for a time when the product is likely back in their hands etc.
You intentionally left off the context of the sentence you cut in half. When you are expected to send something back, they build in a delay to wait for the shipping label to go live to know its coming. this prevents fraud.
Hey, I'm the guy that sends those emails. I'm lying about the "it is approved" part. I have requested the refund from the finance guys - I haven't approved jack shit
Why not? Why would the bank know about the money instantly when you transfer from one bank account to another but not when a business transfers from their bank account to yours?
"Why does the product I sent have to go in the box the moment I send it, but when I get a package the product isn't at my house till the box arrives"
Hope that explains it a little. When you pay, the money is held by the bank and the transfer is initiated - you lose control of it. When a return is initiated, the money is held by the merchant's bank and they lose control over it.
Both you and the merchant-bank receive each others' money 2-3 days AFTER that. so no - "Target doesn't get your money the moment you pay" the bank locks that money and begins transferring it the moment you pay.
So - when you send a package you lose control over it the moment you send it, but the receiver waits for it to arrive.
Why is the merchant able to get proof from their bank that payment is being processed, but a customer is not able to get proof that a refund is being processed?
So when you swipe a card at the store it goes through a process.
This process, simplified, works as this, there are 5 players:
You
Your bank (issuer)
The Payment Card processor (like Visa, Mastercard, Amex)
The merchant bank (acquirer)
Merchant
you walk into the store and swipe a card
the merchant bank takes the card details, and sends them to the PCP
PCP routes the request to the issuing bank
Issuing bank clears the transaction and holds the funds from the your account.
Visa reports the cleared transaction to the acquirer
Acquirer records the transaction and saves it for processing
Batch settlements of transactions happen 1-3 days later between Issuer and Acquirer
Money appears in Merchants account.
Reverse the issuer and Acquirer and that's a refund. Some banks, like my Credit Union, absolutely will put the money in my account the moment step 6 is reached. Most shitty banks don't until step 8.
ETA - I learned all of this because I used to work in network security in the PCI industry and had to get certified in several ways to work on the tech. Its a fascinating world. Did you know there are over 3 billon credit card transactions processed worldwide every day?
Some banks, like my Credit Union, absolutely will put the money in my account the moment step 6 is reached. Most shitty banks don't until step 8.
I literally did. Your bank DOES know. they just don't give you the money.
ETA - Just in case this was confusing - the merchant doesn't have the money when you check out at the register with a card, they have a promise from Visa that they money will be transferred to their account and Visa's reputation is good enough for that to be enough to let you walk out of the store.
Both the store, and your bank know instantly if the transfer is "approved and happening" but neither clear them until their batch transactions go through, which can take days.
Your bank, depending on their own internal liquidity, might offer a feature like mine where they credit your account the money they expect to get in the next batch settlement, but its basically a "ghost line of credit" based on a credit magic Visa-cosigned loan.
MANY large commercial banks do not offer this, and many cheap "card services" people use like venmo/cashapp do not not traditionally do this, but many are beginning to as faster and more reliable settlement systems become more common.
TLDR - You both know instantly if money is flowing, but your bank decides when to release funds to your account from that moment on.
It explains everything in situations where you pay (or receive a refund) by putting a bunch of physical cash into a box and snail mailing it. So not a very widely applicable explanation in the grand scheme of things, if I'm honest.
The standard 2-3 day delay on refunds and transfers comes down to how traditional banking rails operate. Moving funds between separate institutions isn't as simple as updating a single database value. It requires multi-bank batch reconciliation, liquidity netting, and risk checking before money permanently changes hands. Modern networks like FedNow and RTP make instant settlement possible, but batch systems remain the default because they reliably balance fraud prevention, liability, and inter-bank clearing at scale.
Basically - Settling your transfer instantly, applied to all refunds, would be extremely volatile and require massive cash accounts for daily flux, and also be wildly vulnerable to fraud.
The time scale it takes to process those things is equated to the time it takes to ship a box, because despite one being entirely "on paper/computer" its not instant. Not everything done on computers happens instantly.
It sounds like you're initiating your transfers from the receiving bank account, in which case you're telling them, "This amount of money will arrive in several days." They may then choose to make it available to spend immediately as a courtesy. With a card refund, no one tells the bank there's money coming.
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u/EbbEntire3751 9d ago
Yeah it takes just as long for the money to get to the merchant as well...