Why Getting Your Money Back Takes Nearly Two Weeks
As avid gamers, we‘ve all been there – hyped up for the next big release only to face lag, glitches, or simply an unfinished product. So we request a refund, expecting the funds back in our account ASAP. But somehow it creeps along, stuck in limbo, for 7 to 10 long days. What gives?
Based on my industry expertise following game releases the last 8 years, I‘ll provide transparency into the key factors behind this frustrating refund timeframe. By peering behind the scenes at the various financial systems and motivations in play, you‘ll walk away better informed consumers. Maybe even some empathy for the developers working within constraints of a complex digital economy.
The Hard Truth on Day 1 Releases
Game companies now routinely over-promote titles that aren‘t ready for launch. Pre-orders soar beyond actual available stock or digital copies. Impatient executives push releases ahead of schedule before all the bugs can be crushed.
The evidence over the last few years speaks for itself:
- Cyberpunk 2077 – Sony pulled from PlayStation Store to stem refund requests
- No Man‘s Sky – Steam refund rate exceeded average by more than 400%
- Battlefield 2042 – Demand for refunds crashed retailer servers on launch day
So we‘ve been trained by experience to brace for delays getting money back after these botched openings. Refund systems strain under the volume of buyers instantly seeking retribution on their purchase.
Why So Long Though? Can‘t This Be Faster?
Once you‘ve submitted your refund request, whether directly to the developer or through a distributor like Steam, a cascading series of financial and regulatory dominos begin to fall.
Average Refund Processing Timeline
| Stage | Business Days |
|---|---|
| Merchant Review Validation | 2 days |
| Merchant Account Settlement | 2 days |
| ACH Bank Transfer | 3 days |
| Bank Confirmation/Posting | 1-2 days |
| Total | 8-9 days |
Data Source: 2022 Federal Reserve Payments Study
As you can see, a string of independent checkpoints stall movement of funds. These legacy banking systems meshing with gaming purchase platforms aren‘t built for speed.
Delving into each area exposes the nuanced workings of the digital economy:
Validating Your Refund
Companies need to manually verify each refund against potential fraud. Validation steps include:
- Checking gameplay duration
- Reviewing system logs
- Confirming account owns license
- Ruling out malicious activity
With so much on the line reputation-wise in the games industry, firms err heavily on side of caution before returning billions in collective revenue.
The Merchant Bank Balancing Act
Once validated, the downstream process begins, governed by merchant bank agreements. These firms, like Chase Paymentech and WePay, are middlemen handling payment operations.
To hedge risk, they tend to:
- Delay settlements in batches for bulk processing
- Impose holding periods to monitor fraud
- Settle net amounts periodically not gross purchases
Their cost structure also incentives slower turnaround based on interest earned from holding the cash longer.
The Automated Clearing House (ACH)
The ACH network coordinates trillions in bank-to-bank transfers. Managed by the Federal Reserve, it processes high payment volume at low cost but emphasizes precision over speed.
Governing bodies add slack in transfer windows:
- 5 business days to return payments
- Up to 60 days to dispute errors
These protections contribute to the snail‘s pace of ACH refund delivery.
Local Bank Posting
Finally when funds hit your bank account through the ACH, an additional brief delay occurs to clear fraud checks and finalize ledger updates.
Banks also tend to give themselves 1-2 day credit period in case of reversals before confirming availability to the account holder.
While progresses continues towards modernizing these systems for the digital era, overhauls to deeply ingrained finance practices present monumental challenges. The tapestry of watchdogs, middlemen, and regulators aren‘t going anywhere overnight.
What About Debit Card Refunds?
Credit card payments utilize a separate network through processors like Visa and Mastercard. In theory, these refunds can transmit faster given:
- Lower fraud rates for card-present transactions
- No batch settlement constraints
- Direct connections to issuing banks
However, in practice gaming refunds follow similar timelines. With merchants deliberately dragging out processes to discourage refund abuse and offset admin costs.
In some cases, platforms lacking integrated payment support (i.e. Steam Wallet) issue the actual refund by check in 10+ days.
Card networks are optimized for point-of-sale efficiency, not managing high volumes of online virtual goods delivery and returns. So we see the same speed bottlenecks permeate.
What Developers and Retailers Stand to Gain
While locked up payments presents challenges for gamers, the reality is that companies benefit financially from these prolonged time horizons in various ways:
Deferred Costs
- Delays payout of refunds to preserve working capital
- Leverages float periods before transactions finalize
Discourages Abuse
- Incentivizes buyers to keep game with longer waits
- Adds friction to deter fraudulent refunds
Money For Nothing
- Interest earned on aggregate refund holding balance
- Additional days to earn sales revenue
These "savings" factor into pricing decisions and financial plans. Encouraging retailers and platforms to maintain status quo systems.
Of course publicity scandals and player backlash occasionally force refund policy concessions. But core systems remain largely unchanged. Likely for years barring any major regulatory overhaul.
While dinsoa pointing figures, we should acknowledge developers hustling to deliver complex gameplay experiences on tight budgets and schedules. Quality assurance crumbles under executive pressure to fuel revenue growth.
They depend on pre-order income to fund production, lacking financial runway to delay releases until truly finished. It‘s an industry realty at cross-purposes with consumer friendly refund policies.
When Your Refund Finally Arrives
After this winding 8-10 day refund journey:
- 4 distinct financial transfer points navigated
- 6 different regulatory rulebooks adhered
- 8 potential fraud checks cleared
…the funds reach safe haven back in your bank account!
Take comfort that amidst the delays legitimate protections govern these systems. In many parts of the world, online goods don‘t enjoy the same level of disclosure and oversight.
Now chin up. With the economic forces at play better understood, hopefully you feel empowered to vote with your wallet next time and more prudent submitting refunds. Together we can drive change!
References
ESA. 2022 Sales, Demographic, and Usage Data. https://www.theesa.com/resource/esa-2022-sales-demographic-and-usage-data/
IGN. Cyberpunk 2077 Delisted from PlayStation Store. https://www.ign.com/articles/cyberpunk-2077-delisted-from-playstation-store
Mastercard Rules. May 2022 Update. https://www.mastercard.us/content/dam/mccom/global/documents/mastercard-rules.pdf
Noodulz. Game Refunds Impact on Devs. https://medium.com/noodulz/the-real-reason-game-developers-dont-want-you-to-refund-cf3b6e6d6f43
PC Gamer. No Man‘s Sky Steam Refunds. https://www.pcgamer.com/no-mans-sky-steam-refund-rate-exceeds-steams-average-by-more-than-400/
