Direct Debit Returns

A direct debit return occurs when:

  • An account holder disputes a previously approved direct debit transaction.

  • The bank can’t authorize a direct debit because of insufficient funds or a closed account.

When this happens, the bank issues a return, and Blackbaud Merchant Services automatically refunds the amount to the account holder.

Note: A direct debit return isn't sent to your Blackbaud solution automatically. To ensure correct records, adjust the payment to $0 in your solution.

View direct debit returns

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

  • From Transactions, Disputes, under Direct debit returns.

    • To see the reason for the return, expand its row.

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

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

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

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

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

Tip: To receive email notifications when a direct debit is returned or declined, subscribe to notifications in the web portal. For more information, see Manage Notification Settings.

Note: In lists and reports, direct debit returns from failed transactions appear as two line items: Direct Debit Return, and Adjustment, which includes return fees. To find the original payment's reference ID, in the adjustment's menu , select Original transaction details.

Disputed payments

Payers can dispute a payment through their bank:

  • Up to 60 calendar days after a debit on a personal account.

  • Up to two business days for a business account.

Unlike credit card disputes, direct debit disputes are final — there’s no appeal process. If a payer successfully disputes a payment, you must contact them to resolve the situation. For these reasons, direct debit disputes are called returns.

For common return reasons and recommended steps, see Debit Return Reasons.

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