If you want to return the funds to your customer, for example if they returned an item, you need to refund the payment. You can initiate the refund from our dashboard or through the API. While we accept the refund instantly, you will get the outcome of the refund request asynchronously, in a REFUND webhook. You can refund the full captured amount, a partial amount, or multiple partial amounts. The sum of the partial refunds cannot exceed the captured amount. However, note that some payment methods do not support partial refunds. After your refund request, it can take up to 7-10 business days before the funds are returned to the customer’s account, depending on the payment method. There are two types refunds that Cashfree supports.
  • Merchant Initiated Refunds: These are the refunds that merchant initiates from your dashboard or API.
  • Auto Refunds: These are funds which are reversed back to customer in case payment TTL is breached. Read more about payment TTL here.

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Refund Lifecycle

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Refund a Payment (API)

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Cashfree Refund APIs

API EndpointMethodDescriptionDocumentation Link
/pg/orders/{order_id}/refunds \POSTCreates a new refund request for a paymentCreate Refund API
/pg/orders/{order_id}/refunds/{refund_id}GETRetrieves the current status and details of a refundGet Refund
You can also refund a payment from the dashboard. Payment Gateway Dashboard> Transactions> Payments.

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Refund Multiple Payments (Dashboard)

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,

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Refund webhook

Configure refund webhooks to receive real-time notifications for both successful and canceled refunds. This enables you to build systems to update refund statuses and send customer communications. This is the payload for the refund status webhook. You can view the refund webhooks here.

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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 happen when customers
  1. Make a payment after the order has reached a terminal state
  2. Make a direct payment to our UPI Id
Auto-refund differ from standard refunds because they handle refunds that occur automatically (like failed payment attempts) rather than manual refunds tied to specific orders. Since these automatic refunds may happen 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

We will keep customers informed about their refund status, while staying 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 your 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. Read through below table to understand better:
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
Get your settlements in fullCurrent Balance = ₹5000

Refund adjustments = ₹4300

Settled amount = ₹700		Current Balance = ₹5000

Settled amount = ₹5000		✅ Effortless Reconciliation