Receiving a refund and an ‘Unknown merchant’ charge, for a net zero refund
I’m writing this post with the hope that it can assist others who encounter a situation similar to mine. Recently, I was expecting a refund for a ticket I purchased back in August 2023. On October 23, 2023, I received a refund for the full amount. However, there was another debit/charge transaction preceding the refund for the same amount, which meant I still hadn’t received access to the refunded amount. My card was issued by the Canadian financial institution WealthSimple. I immediately reached out to their support and reported the transaction to my card provider. They requested a bunch of documentation about the transaction, my communication history with the merchant, and asked me to sign a document to initiate an investigation. Unfortunately, the customer support didn’t provide me with clear updates, and this led to wasted time and frustration as I tried to get both the airline and the travel agency (who purchased the ticket on my behalf) to investigate the double charge. Initially, I suspected foul play from the airline, but it turned out not to be the case.
Here are more details about the transactions:
- On August 23, 2023, I purchased a ticket through a travel agency for Turkish Airlines. The transaction on my card appeared as “Turkish Airl Tk Pgrxxx.” The ticket amount was in USD, but my card was charged in CAD.
- Due to a major schedule change, I canceled the ticket and requested a refund.
- On October 23, 2023, I saw two transactions on my card:
- “Unknown Merchant: -CAD$x,xxx.xx” -> the first transaction charged.
- “THY NEW YORK NY: +CAD$x,xxx.xx” -> the second transaction, which immediately followed the first one, was a refund for the same amount as mentioned above.
After conducting my research and finding similar cases online (involving the same financial institution), I concluded that the “Unknown merchant” transaction was, in fact, a hold. This likely occurred because of the relatively large amount of money coming from a merchant that hadn’t previously appeared on my statement. The reason for the different merchant name was that the initial transaction was made by Turkish Airlines in Europe, while the refund came from Turkish Airlines in the USA, probably to save on interbank transaction costs. The refunded amount was also different, as the original USD amount was refunded at a different exchange rate than the initial charge. Therefore, my card company couldn’t connect the dots on these transactions and placed a hold on the money. Regrettably, they didn’t inform me about this or inquire about the situation.
Only after I provided all the necessary proof (initial payment confirmation, cancellation reasons, communication with the merchant/airline confirming the refund, etc.) to my financial institution, and after I suggested that it might be a hold from their side, did they confirm that it was indeed a hold, and assured me that they would work on releasing my money within five days. This ordeal has been ongoing for nearly a month now, and I’m still hopeful that I will receive the money by the end of the week.
So, if you’ve recently found yourself in a similar situation where you expected a refund but received an “Unknown merchant” transaction cancelling the refund, now you know that it’s likely your bank placing a hold on the money and waiting for documentation from you.
Update: After waiting for more than 3 weeks, and with the money still withheld – I reached out directly to the Chief Customer Experience Officer at WS, and got the issue solved within 24 hours. I was assured that the company has learned from this experience, and moving forward will ensure customers facing a similar issue will see a quicker turnaround, so that’s a good end to this story.