When we receive a refund we will try and link it to the associated backing loan but that’s not always possible. A high-level summary of the logic is:
- If the credit contains the original payment reference then we link it to the original backing loan (unless it’s already paid off)
- We find backing loans with the same Mastercard merchant ID, if there is 1 match then we link to that
- If there are multiple matches then we see if only one of them matches the exact amount refunded
- Otherwise we put it in the current account
Unfortunately merchants rarely link a refund to the original purchase and often process refunds using a different merchant ID. I would like to look at further refining this matching logic at some point but it’s always better to put into current account (where it can still be used to pay off backing loan) than to risk matching incorrectly as once paid off it cannot be reversed.