Frustrated Customers Abandon Brands When Refunds Are Too Slow

In a world where convenience is the baseline and immediacy is expected, a slow refund can do more than frustrate. It can send customers running.

Data from the latest “Money Mobility Tracker®,” “Instant Shift: How Choice, Certainty and Convenience Are Driving Demand for Instant Payments,” a collaboration with Ingo Payments, found that 63% of U.S. consumers now expect same-day refunds.

Perhaps the most surprising finding? Nearly 40% of consumers say they’d rather go to the dentist than wait more than a week to get their money back. That’s how far consumer expectations have shifted toward convenience.

Now, it’s up to payments infrastructure to adapt and keep up. Once considered a back-office operation or a minor cost of doing business, the process of issuing refunds has become a critical frontier in customer experience. And for many brands, it’s a battlefield where they could find themselves losing.

Refunds are happening in a drastically different context than they were just five years ago. The rise of mobile wallets, real-time payment rails like RTP and FedNow, and embedded financial services has changed the speed of money. For consumers accustomed to near-instant payments with tools like Venmo, Apple Pay and Zelle, waiting five to seven business days for a refund feels archaic.

Instant payments are no longer novel. Per the report, in 2017, only 4.1% of nongovernmental disbursements were made instantly. Today, that figure stands at 38%, a nearly tenfold increase. The leap isn’t just quantitative, it’s qualitative. What started as a convenience has become a necessity, especially for Americans grappling with increasing financial stress and the urgency of liquidity.

It’s also being driven by choice, not just availability. According to the PYMNTS Intelligence data, of the 38% surveyed consumers receiving payments instantly, over two-thirds chose that method from among multiple options. In categories like borrowing disbursements — think short-term loans or credit advances — that preference jumps even higher, with 33% of recipients selecting instant over slower alternatives, a 38% increase from last year.

Read the report: Instant Shift: How Choice, Certainty and Convenience Are Driving Demand for Instant Payments

At the end of the day, instant payments aren’t all just about convenience. Fast refunds build confidence. They signal that a company values the customer’s time and doesn’t want to hold their money hostage. That small gesture of speed can become a powerful lever for building brand affinity.

“Instant” may imply speed, but the real driver is certainty. PYMNTS data reveals that the top reason consumers opt for instant payments isn’t just about getting funds quickly. It’s the psychological relief of knowing the money is already there.

One of the most counterintuitive findings from the Tracker: nearly half (47%) of consumers say they’re willing to pay a fee for instant disbursements, particularly when money is needed urgently.

This flips conventional wisdom on its head. For years, the assumption has been that faster services must be free to win adoption. But the data suggests otherwise — when the value is clear, consumers are happy to pay.

What’s happening now isn’t just about tech adoption. It’s a deeper economic realignment.

We’re witnessing what PYMNTS dubs the “Digital Shift 2.0.” It’s a move away from digital transformation as a buzzword and toward an embedded reality. Instant payments don’t just accelerate transactions — they redefine expectations. As consumers become conditioned to financial immediacy, their tolerance for lag time — in any form — evaporates.

Consider how this shift could cascade: faster paychecks could mean fewer payday loans. Instant insurance settlements could reduce credit card reliance. Real-time refunds might encourage more confident spending.

Businesses that don’t offer instant disbursements, whether in insurance claims, payroll, refunds or rebates, could risk frustrating their customers and hemorrhaging loyalty. Conversely, those that embrace the new standard may be rewarded with trust, satisfaction and repeat business.

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