Why Pay by Bank Refunds Can't Be Processed Right Away

Modified on Mon, May 11 at 5:21 PM

When a customer pays using Pay by Bank, DealerWorks cannot process a refund for 5 business days after the original payment. This article explains why the hold exists, what to tell customers, and what your options are in the meantime.

Why There Is a 5-Business-Day Hold

Pay by Bank payments — unlike card payments — are not processed in real time. When a customer pays by bank transfer, the funds move through the banking system over several business days. During that window, the payment is still in process and can potentially be returned by the customer's bank.

The 5-business-day hold protects the dealership from issuing a refund before the original payment has fully cleared. Refunding before the funds settle could result in the dealership returning money it has not yet actually received.

This is a payment processing requirement, not a DealerWorks setting. The hold period is determined by how Pay by Bank payments are processed and cannot be shortened or overridden from within DealerWorks.

What "5 Business Days" Means

Business days are Monday through Friday, excluding federal bank holidays. Weekends and holidays do not count.

Count 5 business days from the date the original Pay by Bank payment was submitted — not from when the funds appeared in the dealership's account. The refund option becomes available in DealerWorks once the hold period has passed.

Your Options Before the Hold Period Ends

If a customer needs a refund before the 5-business-day hold has passed:

Wait for the hold to clear. Once 5 business days have passed from the payment date, the refund can be processed normally through DealerWorks.
Issue a refund by other means. If the situation requires immediate resolution, your accounting team may be able to issue a refund via check or other method outside of DealerWorks. This is a dealership decision — DealerWorks support cannot authorize alternative payment methods.

Do not attempt to reverse the transaction before the hold clears. If the Reverse Transaction option is unavailable in DealerWorks, this is why. The option will become available once the hold period has ended.

After the Hold Clears — How to Process the Refund

Once 5 business days have passed from the original payment date, process the refund the same way you would for any transaction:

1 Go to Reporting → Transactions and locate the original Pay by Bank payment.
2 Click the three-dot menu (⋮) on the transaction row and select Reverse Transaction.
3 Confirm the reversal. The refund will be sent back to the customer's bank account. ACH refunds typically arrive in the customer's account within 3–5 business days, depending on their bank.

Note: If Reverse Transaction still does not appear after 5 business days have passed, contact DealerWorks support with the transaction ID, payment date, and the error or behavior you're seeing.

What to Tell the Customer

Let the customer know that because they paid by bank transfer, there is a brief processing hold before a refund can be issued — similar to how a check takes a few days to clear. Provide them with the earliest date the refund can be processed (5 business days from the payment date) and let them know the refund will return to their bank account once processed. This is not unusual and not a denial — it is simply how Pay by Bank payments work.