Plain-English Definition
REVERSAL stands for Payment Reversal / Credit Adjustment. REVERSAL denotes a cancellation or refund of a previous transaction, crediting funds back to your account due to merchant return or banking correction.
Important: What this code is NOT
A REVERSAL is not a new charge or debit. It is a credit (funds entering your account) that cancels out an earlier debit.
Understanding REVERSAL (Payment Reversal / Credit Adjustment)
A transaction reversal occurs when an authorization, debit, or fee is nullified and credited back to your account balance.
Merchant reversals occur when a store cancels an order, processes a product return, or corrects a cashier cashier error prior to daily batch settlement.
Bank reversals occur when your financial institution waives a fee, corrects a duplicate processing entry, or reverses an erroneous debit.
How to Locate the Actual Merchant
Because REVERSAL specifies the underlying payment rail or transaction type, you must examine the accompanying text on your statement to identify where you actually shopped or paid:
- Step 1 Look at the merchant or fee description immediately adjacent to 'REVERSAL' or 'REV' on your statement.
- Step 2 Match the credited amount to a previous debit line on the same or preceding statement cycle.
- Step 3 Check customer support tickets or return receipts for product refunds or cancelled subscriptions.
Common Statement Line Formats
Financial institutions typically format REVERSAL entries like this:
MERCHANT REVERSAL TARGET.COMFEE REVERSAL OVERDRAFT WAIVERAUTH REVERSAL BEST BUY 0294ACH REV PYMT CANCELLATION
Verified Primary Sources
Every technical definition on this page is checked against official banking and regulatory rules:
- CFPB: Error Resolution Procedures & Reversals (12 CFR § 1005.11) https://www.consumerfinance.gov/rules-policy/regulations/1005/11/
- Federal Reserve: Payment System Settlement and Reversals https://www.federalreserve.gov/paymentsystems.htm