Is there a reason why a merchant would send an eCheck for a debit card refund rather than simply crediting the account?

[Flashman]

I rarely, if ever, deal with debit cards (something which may become apparent shortly) and someone recently related a tale regarding these that has me baffled.

 

The story, from what I gather, is that a debit card holder bought something that did not suit and applied for a refund from the merchant.  Rather than simply crediting their account for the amount in question, the merchant issued the cardholder an eCheck instead.

 

Is there a reason a merchant would do this?  I thought, at first, that the cardholder might have closed their account between the time they made the purchase and the time they called the merchant to whinge about their purchase.  However, the cardholder insisted this was not the case.

 

The only thing that leaps to mind is that this eCheck business is a variant on the "rebate" racket, whereby the firm offering the rebate is banking on most people not bothering to redeem the rebate.  Likewise, I can sort-of see why a merchant might wish to issue an eCheck rather than simply crediting a cardholder's account: because there is a chance the person receiving the check might fail to cash it.

 

However, the more I consider this, the more unsatisfactory an explanation it seems.

 

Any ideas?  I am truly intrigued by this phenomenon and welcome any explanation you may have. 

 

 

 

 

Edited November 24, 2022 by Flashman

[hegemony]

I would assume it saves them $$$ on interchange-type costs. It could also help them target M$ers using PRE_PAID debIT caRdS

Edited November 24, 2022 by hegemony