Is there a standard procedure for refunding Bitcoin transactions?



I work for an online retailer, and we're currently testing a Coinbase payment implementation for our checkout. One of our big concerns is being able to send a refund in the event that we're unable to ship an item on time, or if a customer cancels an order, or for whatever other reason.

There are a few things that I've managed to find out, but I'm still confused.

  • Coinbase's API (relevant docs here and here) doesn't seem to have a way for us to find the address of the wallet or account that the payment for an order was sent from.
  • Even if it did have a "Sender Address" response, this question/answer makes it pretty clear that using that would probably not be a good idea.

So what options do we have for issuing a refund? I can think of at least a few... each has its own downsides though.

  1. If an order can't be delivered on time, contact them and ask for an address to send BTC to.

    • We do get contact information (Phone, Email, and Address) when they check out - but we can't perfectly verify it.
    • We may be stuck in limbo if we can't get in touch with the customer.
  2. At checkout, ask for an address to send any refunds to with a "just in case" note explaining why we're asking for that.

    • As far as I know, nobody does this.
    • Some users may have privacy concerns when they see us asking for a wallet address.
  3. Mail a check for dollar value of the transaction to the address provided at checkout.

    • Again, we do get a customer's address - but we can't verify it to be 100% accurate.
    • Let's be honest, this really doesn't seem like a good idea at all.

Are there better ways? Is there, universe willing, a standard way of refunding transactions?


Posted 2014-01-28T15:18:32.827

Reputation: 141



As of right now, there is not a standard way to return other than to ask the returnee for an address to which the returner can send. You could ask for them to verify the address by signing some text with its private key, however, users of web wallets are at a disadvantage because not all wallets provide this functionality.

It is too onerous to ask for a return address at the time of sale, because a conscientious user would have to create a new address for each sale's return address. Managing these would grow difficult over time.

Issuing store credit with the option to cash it out via a variety of methods is probably worth consideration, as it prioritizes consumer choice. If I'm ordering from a company from which I order frequently (e.g. Amazon) or I know that I'm going to reorder later, I'll take the store credit and save the management time. Otherwise, I'll cash out the bitcoin and find another vendor who can meet my needs.

Update 21 Feb 2014: Bitpay announced today that Bitpay is now supporting BIP70-73 payment protocol, which includes refund addresses.

Colin Dean

Posted 2014-01-28T15:18:32.827

Reputation: 6 834

Thanks for that confirmation. Store Credit is definitely on the table as well. – dotVezz – 2014-01-28T15:35:52.977

Don't be afraid to apply pressure to Coinbase about this, too. Your company's core competency is selling stuff, their core competency is shuffling money. They should be able to work out a solution, which may include asking the user to create an account so they can receive refunds if necessary. – Colin Dean – 2014-01-28T15:40:57.780

I've sent an email to our contact at Coinbase with essentially this question, copy/pasta'd. Their API does allow Coinbase users to just log in and make a payment, but there's no refund API even when it's a Coinbase member (Unlike Paypal, CC processors, etc). – dotVezz – 2014-01-28T15:50:50.337


No, but there is talk about it in the future.

With google / bing there are just "talks" about it. Nothing concrete so I cannot provide a answer with solid information. So no standard as of yet. Many will pop up as middle men for the purchase. Many will fail, but it is bound to happen.

Currently has this statement:

King of Bitcoin

Tom Stickel

Posted 2014-01-28T15:18:32.827

Reputation: 233

Please [edit] your answer with references and more information. What kind of solutions are being talked about? Who is talking about it? – dotVezz – 2014-01-29T15:14:11.840

Purpose of down-voting is for a plain wrong proven to be wrong answer. e.g. 3 + 4 = 9 .... Proven to be wrong. Lacking information is no reason to downvote. This has been shown in StackOverflow as why so many people are afraid the answer questions or ask questions. This is also why Facebook has no down voting (dislikes , only likes) – Tom Stickel – 2014-01-29T20:32:08.230

1That's nice, but I wasn't the one who downvoted your answer. Either way, I disagree with what you're saying - I think downvotes are completely appropriate for answers that an individual feels are incomplete. You can downvote if you feel that, as it says on the downvote button's title, "This answer is not useful". – dotVezz – 2014-01-29T20:34:48.890

Knock yourself out then LOL. You disagree with "There is talk about it in the future" ???? LOL OMG So you disagree that people are talking about it? – Tom Stickel – 2014-01-29T20:37:12.823

1I disagree with your opinion on downvotes, not your answer. Although the link you've added to your answer does not expand its usefulness in a meaningful way. Are there any references you could provide as background to support your answer? – dotVezz – 2014-01-29T20:43:32.490

@TomStickel I downvoted as I felt that this answer wasn't useful. The original issue with it was that it only binarily addressed the title of the question, but offered no help on solving the stated problem, i.e. was literally not useful. Now, with the edits you have made, you have added speculation, as well as links to one company's procedure and to a bio. After reading the Overstock's statement, one can learn that they use in-store credit for refunds. (Which you should just have written, in addition to providing the link as source.) The motivation for the second link remains unclear. – Murch – 2014-02-02T09:59:16.333

Sorry you feel that way. If you are not following Andreas, who was to the big name worldwide , even on Joe Rogan's show the other day ,... then you won't see and hear what is being talked about. "No , but there is talk about it in the future." This means you have to dig.. Podcasts and tons of forums ... this is NOT sorted out yet. Example is in that they are not refunding in bitcoin as of yet – Tom Stickel – 2014-02-02T21:17:10.987

People commenting SHOULD have answers plain and simple. – Tom Stickel – 2014-02-02T21:22:57.167