Handling refunds
Refund processes can appear complex, especially when different payment methods such as Klarna or direct card payments are involved. Below, we outline the steps and responsibilities to help clarify who to contact and what to check depending on the refund scenario.
Overview of Refund Responsibilities
Refund responsibilities depend on the payment method used:
Refunds processed through Klarna: Klarna manages transactions and payouts to customers.
Refunds for payments made by card (e.g., Visa/Mastercard): Refunds are handled by the card's issuing bank.
Kustom's role: Kustom cannot intervene directly in the refund.
Refunds for payments made through Klarna
If an order was paid using Klarna and the order has status refunded in Kustom Portal, Klarna is solely responsible for processing and sending the refund to the customer. Kustom and merchants do not have visibility or control over this process.
Klarna Balance
The refund may land in the customer's Klarna Balance instead of their bank account or card. Klarna Balance isn't created automatically just because someone shops with Klarna — a refund goes there only if both are true:
The customer already has an open Klarna Balance, and
Their "Send to Klarna Balance" (faster refunds) setting is turned on.
This setting is on by default for customers in Sweden once they set up Klarna Balance. In Norway, Denmark, and Finland, it's off by default. Customers there need to switch it on if they want refunds sent to Klarna Balance.
If the customer has Klarna Balance and the setting is on, the refund is sent there automatically — usually instantly in the app. They can spend it with Klarna or transfer it out to their bank.
If the customer doesn't have Klarna Balance, they'll get a notification in the app and by email asking them to choose: collect to Klarna Balance, or send to their bank/card. If they don't choose, it's sent to the original payment method after 14 days.
If a customer says they haven't received a Klarna refund, ask them to:
Check the Klarna app first — the refund is may already there, under Klarna Balance.
Go to Profile → Payment preferences in the Klarna app to turn "Send to Klarna Balance" on or off for future refunds.
Transfer the funds out from Klarna Balance to their bank account if they'd rather have it there now, or contact Klarna customer support if they're unable to do so.
Situations where the refund was completed require the customer to reach out to Klarna for further assistance. Klarna will work to trace any disbursement issues to the customer's account.
Action for customers
If the refund has not been received:
Check the Klarna app if the refund is already available under Klarna Balance.
Contact Klarna customer support directly to trace the transaction.
Refunds for payments made through Billie
If an order was paid using Billie and the order has status refunded in Kustom Portal, Billie is solely responsible for processing and sending the refund to the customer. Kustom and merchants do not have visibility or control over this process.
Situations where the refund was completed require the customer to reach out to Billie for further assistance. Billie will work to trace any disbursement issues to the customer's account.
Action for customers: If the refund has not been received, they can contact Billie customer support via this link to trace the transaction.
Refunds for payments made by other available payment methods
When a purchase is made using other payment methods here’s what you need to know.
How refunds are processed
Refunds for these payment types are managed directly by the customer’s bank or card issuer.
In some cases, the bank may release the original payment hold instead of showing a separate refund transaction. This means the refunded amount may simply re-appear in the customer’s available balance without a visible refund entry.
One important limitation: Kustom can only refund to the same account that was used for the original payment. It is not possible to redirect a refund to a different card or account.
If the customer has closed their account
If the customer has closed the account they paid with, you will need to contact Kustom first to find out whether the refund has failed.
If the refund has failed: Kustom will confirm this. You will then need to refund the customer outside of Kustom, as the funds cannot be sent to a different account.
If the refund has not failed: Kustom will confirm this and provide a trace ID. The customer can use this to ask their bank to forward the funds to their new account.
What customers should do
If a customer doesn’t see their refund yet, they should contact their bank to:
Confirm whether the refund or adjustment has been processed.
Check whether a pending hold or authorization from the original purchase has been released.
What you can do
Once a refund has been processed, you can find its acquirer reference number (ARN) — sometimes referred to as a trace ID — directly in Kustom Portal:
Open the order in Orders.
Open the order drawer and locate the refund entry.
The reference is shown as Acquirer reference number.
Viewing the acquirer reference number is only available for card purchases.
Refund references are available under the following conditions:
They're supported by some financial partners only; where a partner doesn't provide one, it will be marked as unavailable.
It can take up to 7 business days after a refund is initiated before the ARN is returned by the downstream banking partner.
An ARN isn't available for a reversal, since the original charge was never processed.
For card networks that don't support ARNs, Kustom will attempt to show another reference instead, such as a System Trace Audit Number (STAN) or Retrieval Reference Number (RRN).
If you can see a reference here, share it with your customer so they can pass it to their bank to help locate the refund.
Please note: Trace IDs can only be issued for refunds on card payments made outside of Klarna, and only after the full 10 working days have passed.
When Kustom can help
If the order was paid by card and no trace ID is shown in Kustom Portal, you as the merchant can contact Kustom support on the customer's behalf.
Kustom support can provide a proof of refund to help the customer's bank locate and confirm the payment.
End Customer Guidelines
Here’s a quick reference for customers experiencing refund issues:
Klarna payments: If the order is refunded but refund not received, the customer needs to contact Klarna for a detailed trace.
Billie payments: If the order is refunded but refund not received, the customer needs to contact Billie for a detailed trace.
Other available payment methods: The customer should check for adjustments in their account and contact their bank for further support if issues persist. If the refund hasn't been not received after 10 working days, Kustom can support the merchant by providing a trace ID.