Merchant Agent Refund Processing System
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Solution Overview
Problem
The existing credit card refund process is cumbersome for customers, often requiring them to contact individual merchants, which can be difficult and time-consuming, and frequently results in chargebacks that unfairly deny merchants the opportunity to resolve disputes without their involvement.
Innovation Solution
A merchant agent interacts with customers to facilitate refunds through the existing payment infrastructure, validating and processing refund requests without generating chargebacks, allowing merchants to dispute and potentially reverse refunds through an adjudication process.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If a customer contacts the merchant directly for a refund, then the merchant can resolve the dispute, but the process is difficult and time-consuming for the customer
Solution Approach 1:
The patent introduces an intermediary system (refund processing system) that mediates between the customer and merchant. The system receives refund requests from customers, validates them against sales data, and processes refunds through the payment network without requiring direct customer contact with the merchant, thus easing the process for customers while maintaining merchant control through validation rules.
2Speed
If a customer initiates a chargeback through the card issuing bank, then the customer can obtain a refund quickly, but the merchant loses the opportunity to resolve the dispute without their involvement
Solution Approach 1:
The system performs preliminary validation of refund requests by checking them against sales data in the merchant's database before processing the refund. This preliminary action ensures that only valid refunds are processed, giving merchants control over the refund process while still enabling quick processing through automated validation, thus preventing the need for chargebacks.
3Reliability
If the merchant processes refunds manually through the payment network, then refund accuracy can be validated, but the process becomes cumbersome and inefficient
Solution Approach 1:
The system implements self-service functionality where the refund processing system automatically validates refund requests against sales data in the merchant's database and processes approved refunds through the payment network without requiring manual merchant intervention for each transaction. This maintains reliability through automated validation while significantly improving productivity by eliminating manual processing steps.
Data Source
AI summary
A customer can obtain a refund for a credit card purchase by interacting with an agent of the merchant. The existing payment infrastructure is used, but without the direct participation of the merchant and without generating a chargeback against the merchant. A customer request for a refund is received and validated against multiple data streams including sales data and/or fraud screening databases. For a validated refund request, refund data is stored in a refund database and communicated over the payment processing network to create the refund from the merchant to the customer credit card.