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

Once a merchant confirms a refund, the exact timing depends on their acquiring bank, and processing can take up to 14 business days before the funds are credited to your settlement balance.

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

Where your money comes back depends on your card type:

USD cards — refunds and reversals are credited to your card's USD settlement balance.
EUR cards — refunds and reversals are credited in USDC, not in EUR.

USD Cards — Refunds Return in USD

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

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

Since the card network only ever handled USD, refunds and reversals come back through that same rail — credited as USD to your USD balance. They are not converted back to crypto automatically.

✅ 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.

EUR Cards — Refunds Return in USDC

For EUR card transactions, refunds and reversals are credited in USDC instead of EUR.

When the merchant returns the funds, the amount is converted and credited to your USDC balance in Kolo. The final credited amount may differ slightly from the original EUR amount due to the exchange rate at the time the refund or reversal is processed.

Please note: EUR card refunds and reversals are always returned in USDC, regardless of which cryptocurrency was originally used for the payment.

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.

What to Do If the Money Has Not Returned

If you are waiting for a refund or reversal:

Check your USD balance (for USD cards) or your USDC balance (for EUR cards) 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.

Can Kolo release a pending authorization for me?

No. Only the merchant can capture or cancel an authorization. Kolo and the card network cannot release the hold earlier — the amount stays reserved until the merchant finalizes the payment or the authorization expires.

Can I make the hold release faster?

Contacting the merchant is the only way — they are the only party that can complete or void the authorization before it expires. If the amount is still reserved after the expected timeline, 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