By Shaun Shehab, Lead Solutions Engineer at Ecentric
The South African retail market is experiencing rapid change and evolution. Ecentric’s Black Friday index revealed a massive surge in both online and in-store purchases, especially during periods of high demand. The report also, interestingly, revealed an interplay between online and in-store shopping that retailers need to cater to provide the kind of customer experience their customers demand.
However, as any retailer will know, buying a product is just one part of the equation. Not everyone always buys what they want, and often, once something is purchased, the customer may realise it is wrong entirely. This requires a refund.
Today, purchases are far more complicated than ever before. Significant changes in customer behaviour mean that retailers need to manage complex refund processes across different sales channels. In most cases, retailers struggle with inefficient systems which create administrative burdens and customer frustration. If we look around the market, the current approach to handling returns, especially for online purchases where goods are delivered to the house, is fundamentally broken and requires a transformative solution that can bridge the gap between online and physical retail experiences. Retailers need a streamlined transaction process, both for purchases and refunds.
The problem with most refund processes
Picture this scenario. A customer goes shopping, walks into the store and chooses what they want. They put it in the trolley, go to the POS and leave to go home. Only when they get home, do they realise they actually made a mistake and that the product is wrong. It is incompatible with what they need to do, so an exchange is out of the question. They send their spouse to the store to get a refund as the spouse, as luck would have it, does not have the card that was used to make the purchase. This is a long-winded example, but the point is that the customer needs to return to the store – with the card used to make the payment – in order to get a refund. They cannot use an online channel.
Generally, the refunds process involves multiple administrative steps and a significant operational overhead. The process is awash with pain points for both the retailer and the customer. The retailer needs to manage intricate stock movement, manage administrative paperwork and deal with a customer on the verge of making a public scene. On the other hand, the customer herself is experiencing frustration through a complex returns procedure.
Card-not-present refunds
Ecentric, which manages the card payments for two-thirds of South Africa’s listed retailers and has made significant inroads into medium-sized retailers with both online and in-store payment solutions, realised it needed to develop an API-driven solution that would fundamentally transform the refunds process.
The goal would be to arrive at a simple solution that is obvious to customers but exceedingly complex for retailers: By leveraging online payment gateways, the solution can process refunds directly into the original payment method. This is achieved using advanced tokenisation to ensure secure transactions, allowing retailers to manage card data more efficiently, which ultimately creates more customer-friendly return experiences.
If we go back to our original example, the customer, in the convenience of her own home, can make use of online channels to get her refund. The technology has enabled Ecentric to introduce omnichannel refund capabilities for non-omnichannel environments. Where the physical and online environments and solutions may be separate, as is often still the case in larger enterprise environments, the solution bridges the gap between the environments.
To be fair, this capability is not a “product” but an evolution of the current payments ecosystem paradigm. API-driven processes enable retailers to send refund references, verify original transactions and complete the entire process online. This dramatically reduces the administrative overhead associated with traditional returns, providing a more efficient and, importantly, secure mechanism for handling customer returns.
The paradigm shift moves the goal posts when it comes to strategic advantages for retailers. The technology allows for innovative transactions such as instant loyalty programme sign-ups and seamless payment experiences. How would this work? Imagine this: A customer could tap her card in-store and instantly join a loyalty programme because her card details are instantly and securely tokenised. It’s about creating more adaptive, customer-centric experiences that bridge online and offline sales channels. By implementing advanced security protocols and creating flexible transaction management systems, retailers can transform their approach to customer interactions and payment processing.
But why now?
Make no mistake, the market for this type of technology is growing quickly. No two retailers are at the same point in their digitisation journeys, but the demand from customers, who are demonstrating their preference for a seamless online and in-store experience, is relentless, no matter who you are. Some retailers, who already have the necessary technological infrastructure, are actively seeking to streamline their omnichannel experiences – a good move, considering that one of the key findings from Ecentric’s Black Friday Report is that those who invest in omnichannel will reap the rewards. However, if the retailer does not have an omnichannel environment, the technology enables omnichannel capability.
The potential is exciting, especially for retailers looking to implement endless aisle strategies – but, then again, this depends very much on the current technical capabilities of individual retailers.
But if we turn the lens to now, 2025, these are the facts: Most retailers have complex administrative returns processes which come with high operational costs, these mechanisms are inefficient by their nature, and they lack a genuinely seamless integration between their online and offline channels. This all comes with very real security concerns, notwithstanding great difficulty in managing customer expectations.
It is abundantly clear that an API-driven refund process that implements secure tokenisation alleviates all of this pain. It enables real-time transaction processing, it significantly reduces the administrative overhead, and it creates more transparent and efficient return experiences. There isn’t a retailer in this country who would not want this card-not-present refund capability.
