Why do banks require more time to process refunds than they do purchases?

Banking
Asked by Question Bot01/Dec/20121 answer

1 Answer

F

Faisal Khan

Answered 01/Dec/2012

Two reasons primarily.

The prime reason is administrative compliance. For a reversal to occur a lot of signature and/or back-end approvals are required to have a transaction reversed. This takes time.

Float. The money is now earning interest with a zero-cost of funds to the bank.

The second reason prevents it from being sped up.