Direct Debit Returns

When an account holder disputes a previously approved direct debit transaction, or when their bank can't authorize a direct debit transaction due to insufficient funds or a closed account, the bank issues a direct debit return. Blackbaud Merchant Services automatically refunds returned direct debit transactions to the account holder.

Note: A direct debit return isn't sent to your Blackbaud solution automatically. You should remedy the returned payment in your solution by adjusting the payment to $0.

From the Blackbaud Merchant Services Web Portal, you can view direct debit returns:

• From Transactions, Disputes, under Direct debit returns.

  • To view the reason for a direct debit return, expand its row.

  • To open the refund record and view additional details, select its amount.

• From Transactions, Transaction lists, using filters to find direct debit returns and their corresponding failure codes.

  • If the direct debit is rejected, the transaction status is Gateway Declined.

  • If the payer's bank declines the direct debit, then the direct debit is returned, the original transaction status remains Approved, and a new direct debit return is created.

• From the original transaction record under Transaction details, Related transactions.

Tip: To receive emails from Blackbaud Merchant Services when a direct debit transaction is returned or declined, from the web portal, subscribe to notifications. For more information, see Notifications.

Note: In lists and reports, direct debit returns that occur due to failed transactions appear as two line items: one labeled Direct Debit Return, and another labeled Adjustment, which includes the return fees.

Disputed payments

Generally, payers can dispute a payment through their bank for up to 60 calendar days after a debit on a personal account, or up to two business days for a business account. Unlike credit card disputes, all direct debit disputes are final — there is no process for appeal. If a payer successfully disputes a payment, you must contact them to resolve the situation. For these reasons, "direct debit disputes" are known as "returns."

For a list of common direct debit return reasons and recommended steps to resolve, see Debit Return Reasons.

Tip: When a payer disputes a direct debit payment, Blackbaud Merchant Services invalidates the mandate associated with the payment method and it can't be reused.