India, March 1st: Returns and refunds are part and parcel of eCommerce now, with an average of 20-30% of orders requiring one of the above. The reasons for a return are numerous but how businesses handle intake, refunds and the entire conversation with the customer is the key to retaining or losing a customer. A smooth return process is like a well-marked exit door in a building—you hope customers don’t need it often, but when they do, it should be easy to find. Having said that, it’s rarely done well.

In today’s digital era, the broken refund process affects the customer experience. To identify the key pain points of customers, Kapture CX recently conducted a survey which showcases that refund requests are a major customer experience (CX) challenge as customers face delays, difficulty in support and a lack of transparency.

Fragmented Refund Process

The survey highlights a staggering 40% of customers face difficulty in approaching a human agent, as they get stuck in endless chatbot loops that fail to address their concerns. Additionally, 28% find chatbots unhelpful, as they provide information but lack execution capabilities to resolve refund requests, while 20% of them experience long waits without updates which leads to uncertainty and frustration due to a lack of proactive communication.

Apart from this, the survey also highlights around 12% of customers are caught in an endless transfer loop, as poor routing between departments makes resolution difficult. These pain points underscore the urgent need for brands to refine their refund processes, leveraging automation and intelligent support solutions that prioritize efficiency and transparency.

Failure of Existing or Traditional Systems

The pace of technological advancement is outpacing evolution in chatbots, especially for brands that have been laggards in adopting AI. Additionally, flow-based workflows have become obsolete and further fail to resolve refund-related issues. These conventional systems are reactive and merely respond to queries rather than taking meaningful action to process refunds efficiently. Oftentimes, they are not adept at handling complex requirements in exceptional circumstances.

This showcases a disconnect in the communication as chatbots and live agents operate in silos, causing frustrating transfer loops where bots don’t recognize when to escalate to a human and agents are unsure when to step in. This process further requires approvals at multiple levels, which demands manual interventions and backend coordination, leading to unnecessary delays. This inefficiency leaves customers stuck in a waiting cycle that escalates frustration and damages brand trust.

AI Integration in Refund and Return Experience

Artificial Intelligence (AI) has been making significant strides across industries and customer experience is no longer an exception. As a result of the survey findings, Kapture CX goes beyond traditional chatbots by not just responding to queries but actively resolving them through their AI agents across the entire suite of products.

With the advent of agentic AI, the AI agents can verify refund eligibility instantly and cross-referencing policies and purchase data. These AI agents can autonomously initiate refunds without requiring manual intervention, significantly reducing delays. When human support is necessary, AI agents can escalate cases intelligently, coordinating with and assisting live agents rather than merely transferring chats.

In addition, they keep customers informed at every step instead of leaving them in the dark. This transforms the reactive communication process to a proactive, execution-driven approach, streamlining refund processes, enhancing customer satisfaction and eliminating the inefficiencies of outdated CX systems.

Commenting on AI integration in the process, Gaurav Juneja, CRO of Kapture CX said, “Refunds have long been a pain point for businesses and customers alike. The challenge isn’t just automation—it’s ensuring AI can take meaningful action. With Agentic AI, brands can finally deliver a seamless, proactive refund experience that builds trust and drives long-term loyalty.”

The new and refined era of customer experience with Agentic AI

The future of AI-driven refunds presents a game-changing opportunity for businesses. AI agents can autonomously handle repetitive refund requests which significantly lowers operational costs. Faster, seamless refunds not only boost customer trust but also drive repeat purchases, strengthening brand loyalty. Moreover, AI agents allow businesses to manage sudden surges in refund requests without overloading support teams, providing scalability and turning the entire process into a smooth and frictionless experience.

Final Thoughts

The survey findings exhibit a critical gap in today’s CX landscape. Though automation exists, most AI lacks the execution power needed to truly resolve refund issues. On the contrary, Agentic AI changes this by making AI truly autonomous, capable of taking actions, not just answering questions. Businesses embedding this technology can further witness faster resolutions, happier customers and a more efficient support team.