When a card transaction is canceled, adjusted, unsuccessful, or returned by the merchant, the money may come back as a refund or a reversal.

Refund vs. Reversal — What’s the Difference?

	Refund	Reversal
What it is	A new transaction initiated by the merchant to return funds	Cancellation or adjustment of the original authorization
When it happens	After the original transaction has been fully settled	Before or during settlement, or when the final amount differs from the authorization
Amount	Full or partial amount of the original purchase	Full cancellation or amount correction (e.g., tip adjustment, final amount lower than hold)
Timing	Can take several business days, up to 30 days	Usually faster, often within hours or a couple of days

Why Do Card Transactions Show Refunds and Recharges?

Sometimes a card transaction may look like it was refunded and then charged again. In many cases, this is a normal part of card payment processing.

Card payments usually have two stages:

Authorization — when you make a payment, the estimated amount is temporarily held to check that funds are available.
Clearing / settlement — when the merchant finalizes the transaction, the original authorization may be reversed or adjusted, and the final settled amount is applied.

Because of this, you may see:

the initial authorization reversed, which may look like a refund or cancellation;
the final settled amount charged again;
a small extra debit or partial refund after the transaction is cleared.

This can happen when the final amount differs from the initial hold, for example with fuel stations, hotels, tips, or other adjusted payments.

It can also happen due to FX rate recalculation between authorization and settlement.

This usually does not mean you were charged twice. It is often the original authorization being replaced by the final settled transaction.

Common Reversal Scenarios

A reversal usually happens when a card authorization is canceled, adjusted, or not finalized.

Common examples:

Authorization voided — the merchant cancels the authorization before settlement.
Amount correction — the final charge is lower than the initial hold, for example with fuel pumps, hotel deposits, or restaurant tips.
Expired authorization — the hold was never settled and is automatically released.
Failed transaction — the payment could not be completed, and the reserved amount is returned automatically.

These examples explain how reversals may happen. They do not always mean that the customer needs to take action.

Common Refund Scenarios

A refund usually happens after the original transaction has already been settled.

Common examples:

Product return — you returned an item and the merchant issued a refund.
Service cancellation — you canceled a booking, subscription, or service.
Dispute resolution — the merchant agreed to return the funds after a complaint or review.
Partial refund — the merchant returned only part of the original payment.
Virtual card declined at a physical-card terminal — a virtual Kolo card was declined. If an amount appeared, it is a temporary authorization hold, not a charge, and it is released automatically.

Refund timing depends on the merchant.

What Happens After an Unsuccessful Card Payment?

If a card payment is unsuccessful, the reserved amount is usually returned automatically.

In most cases, you do not need to submit a separate written request. The return is usually triggered automatically after the transaction fails, is reversed, or is not finalized by the merchant.

Depending on the case, the money may return:

immediately or after a short delay;
within 1–3 business days if the payment was reversed or voided;
up to 7 business days if the authorization was not finalized and needs to clear automatically.
within 32 calendar days at the latest for EUR cards.

If the transaction was unsuccessful but the amount is still reserved, this does not mean the money is lost. It may still be waiting for the card network, merchant, or acquiring bank to complete the reversal or release the authorization.

Where Refunds and Reversals Go

Refunds and reversals are credited to your USD balance.

They are not returned back to crypto automatically.

Why USD and Not Crypto?

Kolo uses a pay-from-crypto architecture for card transactions:

When you make a card payment, your crypto is converted to USD at the moment of authorization
You pay the conversion fee once during this initial transaction
The merchant receives USD from the card network

If a refund or reversal happens later, the funds return in USD because that is what was originally sent through the card network.

✅ No Additional Conversion Fee on Returned USD

Because the crypto-to-fiat conversion already happened during the original payment, returned USD can be used again for future card purchases without another crypto-to-fiat conversion fee.

FX Rate Recalculation During Clearing

In some cases, the issuer may recalculate the exchange rate between authorization and settlement.

This can result in a small:

additional debit, or
partial refund

⚠️ Important: This is normal card network behavior and may happen even if the merchant amount has not changed. It is usually caused by the difference between the rate used at authorization and the rate applied during clearing.

Refund and Reversal Timelines

Type	Typical timeline
Reversal (void/correction)	1–3 business days
Refund	3–30 business days (depends on merchant)
Automatic refund (failed transaction)	Immediately or after a short delay
Authorized but unfinalized transaction	Usually up to 7 business days for the authorization to clear.

💡 Pro tip: If you are waiting for a refund or reversal, check your USD balance in the Kolo app. Returned funds appear there once processed.

What to Do If the Money Has Not Returned

If you are waiting for a refund or reversal:

Check your USD balance in Kolo.
Check the current transaction status in Kolo.
Wait for the relevant processing timeline.
1. If the transaction is still shown as authorized in Kolo, the hold may still be released automatically within the expected timeframe and this does not automatically mean that a chargeback should be filed.
2. If you want to speed this up, you may contact the merchant.
3. If the money has not returned within the expected timeframe, contact Kolo Support and share the transaction details.

The Transaction ID shown in Kolo is mainly used by Kolo Support to check the transaction internally. It may not be recognized by the merchant as their payment reference.

Closed, Frozen, or Business Cards

You can still receive a refund or reversal even if your card is:

frozen;
closed;
no longer available for new spending.

The returned funds are still credited to the appropriate balance.

Business Cards

For business cards, refunds from closed or deleted cards still go to the company wallet. This means the refund is not lost even if the original card is no longer active.

FAQ

Can I convert my refunded USD balance back to crypto?

Refunded USD can be converted to USDT or USDC starting from 110 USD.

Why is my reversal or refund taking longer than expected?

Refund timing depends on the merchant, card network, and transaction status.

If the returned amount has not appeared after the expected timeline, contact Kolo Support and share the transaction details.

I received only part of the amount back. Is that normal?

Yes. This typically happens when the final transaction amount was lower than the initial authorization (e.g., you pre-authorized $175 at a fuel pump but only pumped $40).

Why did I get a refund and then another charge for the same card payment?

This can happen when the initial authorization is reversed and replaced by the final settled charge.

It usually does not mean you were charged twice. The final amount may differ because of FX recalculation or merchant adjustments.

Can I cancel or get a refund for a payment I already confirmed?

Once a payment has been confirmed and sent for processing, it cannot be cancelled manually, because the funds have already been passed to the merchant through the card network. If the payment fails or is not finalized, the reserved amount returns automatically (see the timelines above). If an incorrect amount was charged or you want the funds back, contact the merchant directly to request a refund or correction — this is the fastest route, since the merchant controls the final settled amount. If the money does not return within the expected timeframe, contact Kolo Support and share the transaction details.

Need Help?

If you are waiting for a refund, noticed a partial return, or are not sure where the funds should appear, our support team will be happy to help.

Refunds & Reversals