If a bank account is not verified (unverified) or the information entered is incorrect, a refund will typically be rejected by the receiving financial institution and returned to the sender. The funds do not usually disappear; instead, they enter a “limbo” state before being sent back to the originator, resulting in a significant delay.
What Happens to the Refund
- Rejection and Return: If the bank cannot match the account number to a valid account, or if the account is closed/unverified, the bank will reject the Automated Clearing House (ACH) deposit.
- Paper Check (Tax Refunds): In the case of tax refunds, the IRS will generally receive the returned funds and mail a paper check to the address on file, a process that can take several weeks.
- Returned to Merchant (Retail Refunds): For purchase refunds, the money is usually returned to the merchant, requiring them to reissue the payment or contact you for correct details.
- Limbo/Reversal: The funds might be returned to the sender’s account within 5-7 business days